The last five to six weeks have been quite painful for those who are bearish on equity markets, as they have been swept aside by a short squeeze which has been historic in nature. The US markets opened the year with its worst start on record in response to the rate hike of December 2015. This led many, including myself, to believe that a 2008 style year was on the cards.
My view is still that we are in a bear market, or at the very least in the midst of a real correction, the likes which haven’t been seen since 2012. This is based on the basic fact that the Federal Reserve, which has been the main driver of the now 7 year long bull market, has for at least 2 years taken its foot off the gas. The impetus for equity price appreciation has now gone, and it is still my base case that there will not be any new highs in the S&P 500 without the Federal Reserve going back on its current normalization path.
Janet Yellen may have already reversed course, given her extremely dovish speech at the Economic Club of New York last week. This reverse course has come in the shape of a reduction in the number of planned rate hikes for 2016, from four to two. It remains to be seen what actually happens, but if the Fed stays where it is, it is unlikely that prices much higher. Having said that, the rally from February 10 has been impressive. Below are two charts of the S&P 500 futures, over the last four years, and the last three months respectively:
The white moving average on all charts is a 55 period moving average. The top chart, a weekly chart spanning 4 years, shows that indeed the bull has at least come to a resting point over the last 18 months. Momentum, which is indicated at the bottom of the chart, has also stalled out and acted negatively over that time frame.
The main point of contentment for bulls is the failure of prices to break the 1800/1850 area, as indicated by the yellow band. Particularly impressive was the hold and sharp rebound in early February, which has been the genesis of the current rally. This rally is highlighted in the second chart above. It has been quite orderly, respecting the moving average as it slogs higher, further demoralizing bears. It is at a key area though. If the bears are to remain in control, price is going to have to stall out here and reverse lower. Should we see 2100 again, it will surely be the time to throw in the towel in terms of shorting the market. It wouldn’t necessarily be a time to open new long term positions, given the flirtation all time highs, but it would be a significant defeat for those looking for a significant correction to the long term bull. As a result, I believe that the next few weeks of price action will be Incredibly important.
Crude Oil Futures
The following is a chart of Crude Oil over the last 20 years or so:
The devastating move lower since 2014 has been one of the major talking points in finance. On a technical basis, I believe that the easy money has already been made on the short side, and there is a limited downside to come from here, at least in terms of a nominal price decline. As you can see, I’ve drawn in levels at $25 and $17ish, which are roughly 30-60% away from current levels. That is no slouch in terms of profit potential.
My current view is that price ‘wants’ to see something in the low $20s, and perhaps even lower if there is a capitulation type of move. It would make sense technically as well, given the fact that $25 is a major bottom, as is the $17/18 area. $20 is a major psychological level as well.
Having said that, there is a lot of talk about the bottom in Crude, which is why I suggested that the ‘easy’ money has been made already on the short side. There is constant talk of production freezes and reductions, which are meant to boost prices. I do think the simple fundamentals are going to prevent any material price increases for now, and the technicals support that as well. The top of the two charts show the action over the last 12 months, which is decidedly bearish.
The bottom chart shows the current upswing, which like the one in stocks began in early February. Price is currently at an extremely important level, $36ish. A break below would probably see prices quickly deteriorate, back towards $31. Holding at these levels and trending back towards the $40s may indicate that a legitimate respite from falling crude oil prices may in fact be on.
Gold
The above weekly chart represents the last 4.5 years of action, all of it spent declining from the peak of 1923 in September of 2011. As you can see, it has respected the moving average up until the beginning of this year, when it spiked higher. A closer look at the move below:
I’m inclined to believe that gold has made a secular bottom, and will now resume the uptrend that it began way back in 2001. In terms of a shorter term outlook, the move from 1050 to 1287 is in the process of being retraced. I’ve highlighted a band which should be instructive. Holding those levels and making a further high from here should confirm that the bull market is back on. Breaking back lower towards 1050 suggests it hasn’t begun just yet.
US Dollar
Another of the major talking points in finance over the last four years has been the performance of the US dollar. It has been a one way street for 4+ years, going higher, as is shown in the first chart. The second chart shows the churn prices have faced over the last 18 months or so.
Telling price action for me was the move to new highs in late 2015 followed by an abrupt reaction lower. This suggests to me that the next major move in the Dollar Index is lower, and price is seemingly in the process of travelling along that path. Early targets are the range lows at 92, and failing that, the area between 86 and 90 is one of great interest.
Novak Djokovic got himself in some hot water with the cultural intelligentsia this week for making some comments related to the subject of equal pay in tennis. He was asked to respond to the remarks made by Indian Wells tournament director and CEO Raymond Moore last Sunday about women’s tennis:
Moore said before the finals that the WTA ‘rides on the coattails’ of the men, and ‘If I was a lady player, I’d go down every night on my knees and thank God that Roger Federer and Rafa Nadal were born, because they have carried this sport. They really have.’
In response to a question about Moore, Djokovic engaged in the following exchange:
Feelings
This led to a spate of outrage from the usual suspects over the fact Djokovic did not perfectly conform to the company line when it came to equal pay, and thus was branded a sexist by many outlets. Some of the juiciest cuts of cantankerous complaining were served by Kevin Mitchell of The Guardian, who lamented the fact that while Djokovic has an ‘all-embracing cosmopolitan awareness of issues beyond his own sport,’ he also ‘has a beast button.’
Mitchell struggles with his thoughts throughout the remainder of the piece, seemingly saddened that such a great tennis player could succumb to such ‘disturbing’ points of view. He then pivots to worrying about tennis, sport, and society as a whole, wondering how much sexism there still is in society.
This concern over the wider implication of Djokovic and Moore’s words was a constant in most of the write-ups around the internet. There was an underlying fear that a top player such as Djokovic could even be capable of having such backward thinking in 2016, and the surfacing of that fact potentially threatens the work that women in sport have done to achieve equality.
The bottom line: Women should be paid exactly the same as men without question. To think otherwise in 2016 is absolutely absurd.
The Reality
Out of all of the hot takes I read on the matter, only Tom Fordyce at the BBC even attempted to address the substance of Djokovic’s point, daring to look at the actual data instead of instantly dismissing Djokovic as some sort of cretin from the 1940s like everyone else did. Despite the evidence going against his prejudice, Fordyce to his credit posted it, although he tried hard to explain why the data doesn’t mean what it says on the surface.
Fordyce doesn’t believe that the fact that the men drew nearly 600 million more viewers than the women did last year should mean that the men should automatically get paid more. He writes:
That, at best, is only a selective argument. Most tennis fans describe themselves as exactly that – lovers of the game, rather than one tour above the other, with the usual partiality for a particular player more likely to be based around their character and on-court style rather than gender.
It is also only selectively true. As Serena pointed out after her final in California: “Last year the women’s final at the US Open sold out well before the men.”
Most articles on the subject were quick to point out that US Open Women’s final from 2015, which sold out in hours, much faster than the men’s did.
This is explained easily, as the US Open final was likely going to be a historic match. Serena Williams had won the previous three grand slams of 2015, and was heavily favored to do so at the US Open, making her the first player to do so in 27 years. Given that she is also an American, her completing that feat on American soil, while also embroiled in a quest to be the most decorated grand slam player of all time, that final was set to be a once in a lifetime event. It’s no wonder that tickets sold out instantly.
To be sure, when Williams lost in the semifinal, ticket prices for the final on StubHub plummeted between 40% and 75% within minutes. The interest was in Williams creating history, not in women’s tennis in general.
That raises an interesting line of reasoning to traverse. Ultimately, the interest in tennis is what generates revenue, largely via television deals. Given the aforementioned increased viewership for men’s tennis versus women’s tennis, it should follow that the TV deals reflect that. Fordyce mentions this, writing:
Men’s tennis already earns far more from broadcasting rights than the women’s game. The latest WTA media deal is worth £365m over 10 years; Stuart Watts, CEO of ATP Media, is forecasting £904m revenues over same period.
The men’s tour draws more eyeballs, which in turn equates to more advertising, ticket and television revenue, which in turn means higher prize money for the men. There is nothing wrong with this.
An important detail to point out is that there are mens-only and womens-only tournaments outside of the majors. It is here where the disparity in pay really shows itself. In the major events, pay is more or less equal as a rule, not based on the interest garnered.
Some have claimed this is understandable, given the two tours are mashed together in one setting. The biggest individual personalities, male or female, draw the biggest crowds. There are periods in tennis in which there are more star names on the men’s side than the women’s side and vice versa. There is an argument to be made, then, that in those years in which the women draw more viewers, and thus more revenue, they should command a higher prize pool to reflect that.
In fact, Djokovic was literally asked this in the original exchange, and clearly said that if female players attract more attention, they should be paid more than the men. Yet his unambiguous consistency in this regard, the complete opposite of sexism, was deemed disturbing and evidence of the ‘beast’ within.
When including all of the tournaments, men earn more in prize money because they entertain more eyeballs. Fordyce tries to explain this away, as many do, by saying that it is because of a bias in marketing, and a cultural preference for male sport:
It reflects too a historical cultural predisposition to male sport, the way sports broadcasting is frequently marketed at a predominantly male demographic, how the rest of the mainstream media devotes so much more coverage to men’s sport than women’s and so influences demand.
If only marketers were even-handed in their efforts, the argument goes, people would flock to women’s sports more. The simple truth is that the men offer the better product. That is, men are on the whole better at tennis than women.
In 1998, both Serena and Venus Williams were convinced that they could beat any male player outside of the top 200 in the men’s rankings. Note, already off the bat, they themselves estimate that their vastly superior, all-time great talent in the female game only translated to the equivalent of 200th at best in the men’s game.
They were given an opportunity in the shape of Karsten Braasch, who was ranked 203rd at the time. Preparing for the match with a round of golf and a few beers, he quickly dispatched of both sisters, beating them over two sets while only losing 3 games. The thorough beating led to the sisters calibrating their claims, to perhaps only being able to challenge men outside of the top 350.
This phenomenon has been seen in other sports as well. The US Women’s soccer team, another team who many have highlighted as being injusticed compared to the men despite generating less revenue, regularly lose friendly matches to teams made up of above average 15 and 16 year old boys. These boys are in no way elite on the global stage within their own age group, let alone amongst older players. Yet they have no issue besting the best female players in the world.
The reality is that people flock to the better of two products when both are on offer. The men’s game is better than the women’s, which fully explains the higher draws to the former. I’ve seen remarks in comment sections that this matter could be settled once and for all by not segregating men and women, just having one tournament which all professional tennis players can enter.
This would be disastrous for female players. The current set up for majors for example, is a men’s tournament of the top 32 players, and a women’s tournament of top 32 players. A combined event of the top 64 players would simply be the top 64 men, given the most dominant female player perhaps of all time can’t last with a marginal men’s player.
For the record, I enjoy watching the Williams sisters, Maria Sharapova, Victoria Azarenka and other top women, but the only reason they are afforded the opportunity to earn millions in prize money and endorsements is because of the very recognition of gender differences that some all of a sudden pretend is sexist when it comes to equal pay.
In other words, by segregating men’s and women’s professional tennis, the women are benefited by not being judged to the same exact standard as men are. And this is correct, because men and women are fundamentally different physically. This fundamental difference affects how each gender plays the game, and in turn how much they can draw in terms of revenue. Such realities will never be changed on the basis of baying about equality. Reality always comes out on top.
Speaking of Sharapova, Fordyce points out another inequity – the difference between Sharapova and Williams’ endorsements:
If there is an argument about who is paid what in tennis, it might more profitably be focused on the more jarring incongruities – how Maria Sharapova, who has won a grand total of one set in her past 14 matches against Serena, could nonetheless have yearly earnings that dwarf those of the 21-time Grand Slam singles winner.
In light of Sharapova’s impending drugs ban, those endorsements will surely diminish. However, the disparity in endorsements between Williams and Sharapova is painstakingly obvious to those who deal in reality, versus being caught up in feelings. Observe the following image:
Sharapova endorses products such as Porsche, Avon, Tag Heuer, and Tiffany & Co. In other words, high end glamour products. Her body type, which is far more feminine than Serena’s, is more conducive to such advertisements, given they heavily rely on image and visual cues. There’s no other reason for it, and it is totally appropriate.
Serena’s unquestionably superior CV doesn’t matter a jot in this instance. You’re buying into an image with respect to these products, not a track record.
In the end, Fordyce points out that sport is one of the few industries which is a true meritocracy. He is right, and that is why at the end of the day, Djokovic is right as well. Whoever draws the biggest crowd should be paid according to that revenue which is garnered. His comments were not sexist, and his subsequent apology tour as a result is unnecessary.
That backtracking is telling, however. Djokovic likely still feels the way he felt in his original comments, but owing to the climate in which he works, standing by them might mean calls for a boycott, pressures on sponsors, and strained endorsement partnerships. His livelihood could be threatened by such overt deviations from the politically correct narrative.
This highlights the fact that the current outrage culture is more controlling and oppressive than anything that came from Djokovic’s mouth last Sunday. The fact that the direction of this oppression is towards the shunning of reality is what should cause worry, not the reality itself.
One of the talking points Donald Trump has used thus far in his campaign is the fact that his stellar business acumen is exactly what the United States needs. In other words, whatever was in his brain that allowed him to earn a fortune of $10 billion will enable him to do great things for the country.
Naturally, his opponents have made claims to the contrary, and it’s easy to understand why. If they can show that Trump really isn’t as good of a business man as he claims, the rationale for electing him is greatly reduced. Unfortunately for those making the claims, they’ve only displayed their ignorance.
There have been many instances of this argument over the last few months, but I’d like to focus on two recent ones. First, from Gawker:
So to commemorate our country’s imminent President Trump-wrought downfall, we’ve compiled every major, non-real estate-related Trump business disaster out there (we think). Because while we aim for completeness, the man has failed—a lot. If you know of anything we missed, please do let us know down below. And Donald, good luck with that wall.
They then go on to channel Mitt Romney and name 15 initiatives that Trump tried which didn’t work out – Trump Steaks, GoTrump.com, Trump Airlines, Trump Vodka, Trump Mortgage, Trump: The Game, Trump Magazine, Trump University, Trump Ice, New Jersey Generals, Tour de Trump, Trump On The Ocean, The Trump Network, Trumped!, Trump New Media.
Sounds like a lot of failure, until you understand that there are, at least currently, 515 separate entities which Donald Trump, through his Trump Organization, either owns or is a major investor in. Many of those may end up in the scrap heap as well. There are probably many more businesses Trump has owned in the past which failed, or he took a loss on, as well as many others he sold for a profit.
The bottom line is that coming up with a list of 15-20 business failures does nothing but show that Trump has tried a lot of things. People who declare Trump a business failure on the back of that simply don’t understand business in general. Business is about anticipating the demand of the marketplace and attempting to supply that demand.
You might be right, or you might be wrong, but you won’t know for sure unless you attempt to meet that demand. If you’re wrong, you cut your losses and move on. Between 70% and 90% of new business ventures fail, depending on who you talk to. There is nothing wrong with this unless you fail to learn the specific lessons from each experience.
Furthermore, the math is firmly in Trump’s favor. 15 failures against 500+ profitable companies (perhaps), works out to a success rate of about 97%. That seems pretty strong to me. Business is a lot like baseball, in that a success rate of 3 out of 10 in baseball makes you a Hall of Fame player. In business you only have to succeed a handful of times to be a success, as long as those successes are larger than your failures. Indeed, Thomas Edison failed 10,000 times before getting the light bulb right once, and his name is forever etched in history.
The truth is that you only have to be a success one time to be a success in business, let alone several hundred times like Trump has. That line of argument is totally bankrupt.
****
So is this argument, most recently brought about by Senator Elizabeth Warren in a recent Twitter tirade. Here it is:
I haven’t actually looked at the math, but I’ll take this argument at face value. Even if it is true, it falls apart very quickly on two levels. The first is that it requires Trump to have bought the market at the exact low point in 1974, and held on for 40 plus years without drawing one cent for food, clothes, lodging, and whatever extravagant lifestyle he might have wanted. On top of that, he would have had to sell out at exactly the right time at the 2015 high. Completely unrealistic.
The other way in which this argument fails is the simple fact that Trump went out and built things with his inheritance. The skyscrapers, hotels, golf courses and so forth created tens of thousands of jobs, and facilitated all sorts of economic activity that would not have existed if Trump had put that money in an index fund instead.
In fact, if every single business person in 1974 had put all of their money in an index fund, instead of putting it towards whatever tangible businesses that money was put towards, all that would have happened is that the stock market would have exploded higher and then crashed. The reason being, the very business activity which stock prices and index funds rest on would never have happened.
In other words, the only reason those index funds performed as well as they did from 1974 to the present is precisely because of people like Trump who built things and facilitated the economic growth those index funds are a derivative of.
****
It’s incredibly ironic for a woman like Senator Warren to be trying to undermine Trump in this manner given her entire claim to fame has been her belief that Wall Street is the cause of all that ails us, from cancer to war, famine and pestilence. You would think that someone who thinks Wall Street collects money without doing anything to benefit society would not ridicule someone who actually did benefit society. Not only that, Warren ridiculed Trump for not just parking money in a derivative instrument and sitting there collecting the profits.
Such is politics, where blatant contradictions are the norm. Mitt Romney is also guilty of this, as he surely knows better. But he made a disingenuous point for political purposes. Despite Gawker’s attempt to drop the mic on Trump’s business acumen, he is a unquestionable business success. You simply don’t go from a few million to a few billion in net worth otherwise.
There is something going on…Go to Brussels. Go to Paris. Go to different places. There is something going on and it’s not good, where they want Shariah law, where they want this, where they want things that — you know, there has to be some assimilation. There is no assimilation. There is something bad going on.
You go to Brussels — I was in Brussels a long time ago, 20 years ago, so beautiful, everything is so beautiful — it’s like living in a hellhole right now
Donald J. Trump (26 Jan 2016)
I’m not going to beat around the bush here. What happened in Brussels was a direct consequence of the weak, appeasing doctrine that is multiculturalism, and its parent doctrine cultural Marxism. I’ve written about this doctrine multiple times on this blog, and at its core is a view that the West is full of unnecessary repression which must be removed so man can be truly free.
In the context of culture, Western civilization was erected on things like the rule of law, individual rights and personal freedoms. Whatever it is about Muslim culture, it doesn’t mesh very well with Western values. You can come up with whatever reasoning you like as to why, but the basic truth is that it is not compatible with Western ways.
This is not in any way racist or ‘Islamophobic.’ I have no issues with a multi-ethnic society. That is, a multi-ethnic society that retains the same Western values, specific to the nation involved. A multi-ethnic nation which speaks the same language, follows the same customs, respects the same traditions upon which that country was founded and made into an attractive place to live. This is all fine.
What is not fine is the importation of various world cultures into one nation and expecting the foreign cultures to have a say in the daily life of the host country. That is an invasion, an erosion of what made that country attractive in the first place.
****
The cultural Marxist appeal to tolerance seeks to promote the views of the ‘oppressed’ at the expense of the ‘oppressors.’ In this context, the (nominally) Christian oppressors in the West must be held down in order to appease the oppressed Muslims. This is how you get nonsense like the following:
To be sure, the #stopislam trend on Twitter is not the most appropriate response in the world, but the idea that being offensive on the internet is worse than a terrorist attack in which over 30 are killed, hundreds more injured, infrastructure damaged and thousands of lives irreparably damaged is incredibly disturbing.
There were many tweets similar to the one posted above in response to the hashtag. In addition to that, there were countless voices who preemptively struck down the ‘right wing racist rhetoric’ that was sure to follow in the wake of the attacks.
To me that shows the level of indoctrination that is rampant in the West today. It has reached, dare I say, nearly the same levels that Nazi Germany reached, albeit not in the same way. The Nazis convinced their people that anyone who didn’t look like the ‘master race’ was basically subhuman and rife for Nazi control.
Cultural Marxism preaches something similar, except that anyone who does look like the master race, or is a member of the master gender, master sexual orientation or the master religion should not be tolerated. Cultural Marxism is on some level a reverse Nazism.
That’s the only way you can cultivate a mentality that places the ridicule of an ‘oppressed’ minority religion as a greater offense than the slaughter of nearly three dozen of your countrymen.
At some point, the average citizens will start to sour on the notion of multiculturalism, and the cultural Marxist viewpoint in general. The empty platitudes of Prime Ministers, candle light vigils, and lighting up of tourist attractions in the colors of affected countries will start to enrage people rather than sadden them.
The social media ‘activism’ which involves trendy hashtags and Facebook filters will also continue to ring hollow, given the same people participating in these ‘look-how-solemn-and-grave-I-am-for –remembering-the-dead-and-showing-solidarity’ exercises are the same people who declared that anyone who wanted to think twice about allowing hordes of Syrian refugees into the country no questions asked was a bigot.
The truth is that these ‘bigots’ were more interested in the preservation of their culture than submitting to politically correct concerns. That is the same choice the United States electorate will have in the fall. Piers Morgan wrote a strikingly accurate column today in the Daily Mail. Surprising, because I rarely agree with Piers Morgan. But I suggest you read the column in full. I’ll leave you with his closing comments:
Hate Donald Trump all you like, but at least he seems to recognise the magnitude of the threat and at least he has firm proposals for how to try to defeat it.
They may not win him the Politically Correct Pontificator of the Year award. But how many more scenes like this morning’s appalling images from Brussels are we going to tolerate before we try a non-PC option to beat these disgusting excuses for human beings?
At the end of our interview, I asked Donald Trump to send a message to the large majority of non-violent, decent Muslims who are as disgusted by these attacks as the rest of us.
‘I have great respect for Muslims,’ he said, ‘I have many friends that are Muslims. I’m just saying that there is something with a radicalized portion that is very, very bad and very dangerous. I would say this, to the Muslims, when they see trouble, they have to report it, they’re not reporting it, they’re absolutely not reporting it and that’s a big problem.’
Elizabeth Warren is not a happy woman. The Massachusetts senator went on a Twitter tirade yesterday against Donald Trump, calling him a loser, a business failure, as well as putting forth the typical suite of tired claims that he’s a racist, sexist, and so forth.
Warren has made her name positioning herself as a staunch defender of the little guy against large interests, Wall Street in particular. Her comments are not so out of the ordinary in that sense. What is peculiar is the seemingly hysterical manner in which she made them. This was an 11 tweet stream of consciousness that seemed to be coming out of desperation. The desperation, in turn, stems from the fact that is that Donald Trump, and all that he represents, is clearly not going away, and even stands a good chance of becoming president. I’ll go through some of her tweets to understand what she, and by extension what has become of ‘polite society,’ are so fearful of in a Trump presidency.
Warren’s tirade was split into two parts. The first focused on Trump’s business and personal failings, decrying him as a loser. It then transitioned into why such a loser would be dangerous for the country. The above tweet is at the beginning of that phase of the rant, warning Americans Trump is prepared to tear down America’s values.
Her specific wording is telling. ‘An America that was built on values like decency, community, and concern for our neighbors,’ refers to America is at it stands now. However, that is not the original America. That America was built on values such as individualism, personal freedom and self-determination.
The replacement of the original America with the one of which Warren speaks was a gradual one, and it spanned across economic and cultural milieus. More specifically, the rise of the Cultural Marxist viewpoint has come to form the backbone of modern Western values.
I referenced Cultural Marxism extensively in my piece last week about the cultural importance of a potential Trump presidency. I briefly described the role of Cultural Marxism as it applies to the current culture of perpetual outrage and victimhood. I’ll now spend some time going into the academic history behind cultural Marxism.
****
First, I must point out that leftists go to great lengths to try and pretend that the concept of Cultural Marxism doesn’t exist, and that those who use the term are merely right wing extremists who use the term as a dogwhistle to conceal their bigotry. This article from Jeremy Wilson of The Guardian is a good example of how far those lengths are. I mention it because in trying to discredit the concept, it also contains a quick and dirty summary of the origins of Cultural Marxism:
It begins in the 1910s and 1920s. When the socialist revolution failed to materialise beyond the Soviet Union, Marxist thinkers like Antonio Gramsci and Georg Lukacs tried to explain why. Their answer was that culture and religion blunted the proletariat’s desire to revolt, and the solution was that Marxists should carry out a “long march through the institutions” – universities and schools, government bureaucracies and the media – so that cultural values could be progressively changed from above.
Adapting this, later thinkers of the Frankfurt School decided that the key to destroying capitalism was to mix up Marx with a bit of Freud, since workers were not only economically oppressed, but made orderly by sexual repression and other social conventions. The problem was not only capitalism as an economic system, but the family, gender hierarchies, normal sexuality – in short, the whole suite of traditional western values.
The conspiracy theorists claim that these “cultural Marxists” began to use insidious forms of psychological manipulation to upend the west. Then, when Nazism forced the (mostly Jewish) members of the Frankfurt School to move to America, they had, the story goes, a chance to undermine the culture and values that had sustained the world’s most powerful capitalist nation.
The vogue for the ideas of theorists like Herbert Marcuse and Theodor Adorno in the 1960s counterculture culminated with their acolytes’ occupation of the commanding heights of the most important cultural institutions, from universities to Hollywood studios. There, the conspiracy says, they promoted and even enforced ideas which were intended to destroy traditional Christian values and overthrow free enterprise: feminism, multiculturalism, gay rights and atheism. And this, apparently, is where political correctness came from. I promise you: this is what they really think.
The biggest point of contention Wilson seems to have is that the Frankfurt School thinkers were actively trying to destroy Western Civilization. That may be conspiracy, or it may be factual, but what isn’t up for debate are the ideas which were put forth.
One of the major ideas of Marcuse’s seminal work, Eros and Civilization, was that people in modern civilization suffered from what he called ‘surplus repression,’ a phenomenon which was at odds with Eros, the life force:
The distinction between rational and irrational authority, between repression and surplus-repression, can be made and verified by the individuals themselves. That they cannot make this distinction now does not mean that they cannot learn to make it once they are given the opportunity to do so.
According to Marcuse, a certain level of basic repression was necessary in order to achieve the ends of basic survival in a world of scarcity. This is obviously true on many levels, as progress in general in large part requires delayed gratification.
Marcuse argues that once this basic level of survival is achieved, continuing on in the ways of repression is detrimental, and against the nature of man. It is very much an argument against phenomena like the consumerist culture of the West. He writes:
And the fact that the destruction of life (human and animal) has progressed with the progress of civilization, that cruelty and hatred and the scientific extermination of men have increased in relation to the real possibility of the elimination of oppression — this feature of late industrial civilization would have instinctual roots which perpetuate destructiveness beyond all rationality.
Here he bemoans the fact that while humans have advanced, the advancement has not brought with it the liberation from repression. Instead, humans have been become even more prone to the ‘repression’ that makes people beholden to a work-spend-consume cycle of living.
Marcuse advocates a releasing of the Eros beyond the repressive states of the industrialized world as it stands. He outlines a course for that as follows:
The notion of a non-repressive instinctual order must first be tested on the most “disorderly “of all instincts – namely, sexuality. Non-repressive order is possible only if the sex instincts can, by virtue of their own dynamic and under changed existential and societal conditions, generate lasting erotic relations among mature individuals. We have to ask whether the sex instincts, after the elimination of all surplus-repression, can develop a “libidinal rationality” which is not only compatible with but even promotes progress toward higher forms of civilized freedom…
…This change in the value and scope of libidinal relations would lead to a disintegration of the institutions in which the private interpersonal relations have been organized, particularly the monogamic and patriarchal family.
These prospects seem to confirm the expectation that instinctual liberation can lead only to a society of sex maniacs – that is, to no society. However, the process just outlined involves not simply a release but a transformation of the libido: from sexuality constrained under genital supremacy to erotization of the entire personality.
It is a spread rather than explosion of libido – a spread over private and societal relations which bridges the gap maintained between them by a repressive reality principle. This transformation of the libido would be the result of a societal transformation that released the free play of individual needs and faculties.
The takeaway here is that Marcuse wanted a society governed by the idea that if it felt good, it was good. He wanted the ‘pleasure principle’ to replace the ‘performance principle.’ Getting there required the dismantling of the old constructs. Monogamy and patriarchal families are specifically mentioned in this excerpt, but it also applies to concepts such as feminism, homosexuality, which Marcuse also deals with directly, and multiculturalism.
Furthermore, it is important to note that Marcuse, out of all of the Frankfurt school thinkers, was the one to gain the most currency in society as a whole, as the counterculture movements of the 1960s in both Europe and America were buttressed by his thinking on an intellectual level. Given that these same baby-boomers, now middle aged, are the ones who populate the cultural institutions from college administration to Hollywood, imposing their views on them, it is difficult to take Wilson’s claims that Cultural Marxism is a ‘conspiracy theory’ very seriously.
****
To further push these ideals onto society as a whole first required tolerance of them. Marcuse writes of tolerance in a 1965 essay called Repressive Tolerance, in which he outlines his view that tolerance and free speech are wholly dependent on dominant points of view, and as such true tolerance would require the repression of the dominant, ‘oppressive’ view. The very first paragraph is instructive enough:
This essay examines the idea of tolerance in our advanced industrial society. The conclusion reached is that the realization of the objective of tolerance would call for intolerance toward prevailing policies, attitudes, opinions, and the extension of tolerance to policies, attitudes, and opinions which are outlawed or suppressed.
In other words, today tolerance appears again as what it was in its origins, at the beginning of the modem period — a partisan goal, a subversive liberating notion and practice. Conversely, what is proclaimed and practiced as tolerance today, is in many of its most effective manifestations serving the cause of oppression.
Of course, according to Marcuse, the right is responsible for the oppression, and thus “liberating tolerance, then, would mean intolerance against movements from the Right, and toleration of movements from the Left.”
****
The moves we have made towards this type of tolerance in 21st century have been pretty clear. Being tolerant today means elevating the non-male, non-white, non-heterosexual, non-Christian, and non-affluent above the male, white, heterosexual, Christian and affluent at all costs, regardless of merit. It is the Marcusian worship of the Eros at play, the feel-good, or pleasure principle taking precedent over the performance principle. This is what is currently considered to be ‘decent,’ and forms the basis of political correctness.
Such values of ‘tolerance’ are what Senator Warren fears will go by the wayside in a Trump presidency. She intensifies the scorn here:
To the extent terms such as racism, sexism, Islamophobia and xenophobia have any weight, it is because they represent the specter of oppression that cultural Marxists rail against. The individual who is guilty of the charge is therefore an oppressor and guilty of a grave crime, because that individual ultimately stands in the way of freedom through the liberation of Eros, to put a Marcusian bent to the analysis.
These words are tossed out like candy by Leftists in order to instantly shut down the opposition, which, according to Marcuse, they have the right to do given that their position is one of liberation. The Right leaning person who is invariably guilty of the ‘-ism’ charge is oppressive. Authoritarian tactics are thus valid on such a barbarian. Speaking of authoritarians:
Given support of Leftist ideals is not only fine, but the Marcusian definition of ‘tolerance’, the only reason Trump’s authoritarianism is to be feared is because it originates from the Right.
****
The issue that those such as Warren are ultimately going to have to make peace with is that the Frankfurt School ideals are bankrupt and unsustainable with respect to societal and civilizational progress. Consider Marcuse’s explicit call for monogamous and patriarchal family units to be dismantled as a precursor to his ideal world.
The patriarchal family unit had been a target for the Frankfurt school for some time, right from its origins around the time of World War I. Later on, in 1950, Adorno increased the level of contempt by suggesting that those who are raised in such conditions are likely to become racists and fascists.
This, as mentioned before, is unacceptable in that racists and fascists prevent progress and foster oppression. In this manner, the Frankfurt School was essentially declaring patriarchal families as breeding grounds for the personality disorder of authoritarianism and the mental disease of racism.
Given that the patriarchal family is the basis of civilization, the move to dismantle it ultimately results in the erosion of civilization. Once eroded, the Eros that Marcuse so wanted to liberate would have to return to its box so that society can be rebuilt. That logical progression is what ultimately dooms cultural Marxists and why their opponents actually possess the winning hand.
In the 50 or 60 years since Marcuse’s work began to permeate the culture, society has become more and more progressive. It has also begun to crack in ways it never has before. Just in the realm of feminism, the ‘liberation’ of women and their encouragement en masse to enter the workforce has resulted in nothing but sky high divorce rates, a reduced birth rate to the point that many Western nations are not reproducing at an above replacement rate level, and higher rates of birth defects in the babies that are born because women are having children later in life. Consider the following results of a study of the happiness levels of white collar workers in America:
Are you a 40-something year old single professional woman making less than six figures a year? If you are, you must be incredibly unhappy. This according to a recent survey which revealed the profiles of unhappy workers.
Those who were the unhappiest were single females, aged 42, in “professional” jobs (think doctor or lawyer), making less than $100k a year. What about the “happiest” person, according to the survey?
Well, that lucky worker is a 39-year-old male who’s married with a wife who works part time. He also has a young child at home and works in a senior management position, raking in around $150k-200k a year.
The truth is that the feminist prescription for improving society is not in league with reality. Real women, when subjected to the ‘freedom’ from patriarchal ‘oppression’ seemingly don’t take very well to it. That hasn’t stopped progressives from continuing to push it, but it is an important point to make.
****
The ‘oppressive’ views of those like Trump, or indeed myself, are in line with reality. The differences between men and women are not socially constructed, but biologically constructed, and therefore are not open to adjustment.
Statements such as that are not controversial when viewed objectively, but in Marcusian terms, they are ‘repressive.’ However, if that repression results in societal advancement and harmony, there is nothing wrong with it. Liberation for liberation’s sake is pointless.
On a visceral level, Donald Trump represents something completely terrifying to the cultural Marxist view: an unapologetically confident man. He is the perfect embodiment of the aggression which Marcuse is critical of as it pertains to his ‘performance principle.’ Should Trump become president, he would be the most powerful individual in the world.
The mere presence of such a man totally antithetical to the cultural Marxist view in such a position could be enough to shift the tectonic plates of culture. The aggressively confident man represents oppression to the cultural Marxist, and thus Trump would stand in opposition to everything they have worked for over the last few generations.
The fear is that a Trump presidency might inspire others to follow in his footsteps, to strive to be better, and to accept nothing less. If in a generation this sort of man is the norm, as opposed to the limp wristed man who is the norm now, the liberation of society from cultural Marxist clutches will be likely, even certain.
I like to say we injected cocaine and heroin into the system, and now we’re maintaining it on Ritalin.
Richard Fisher, Former FOMC voting member, 9 March 2016
Here is the solution to the American drug problem suggested a couple years back by the wife of our President: “Just say no.”
Kurt Vonnegut
Nancy Reagan died a little under two weeks ago, and one of the things she’ll be most remembered for is her campaign against drug use, and the famous slogan: ‘Just say no.’ Whether her efforts were effective are debatable. At the very least, they did ignite a national conversation about drug use that was useful.
In my personal opinion, drug addiction is closely related to a lack of hope, or a lack of appreciation for the future. If one doesn’t believe any sort of positive future is in the offing, it is more likely that drugs become appealing. Not only do they create an escape from that lack of future, they provide comfort in the present. Despite the destructive nature of drug abuse, it is understandable on some level.
Unfortunately, policy makers in the economic arena also share the drug addicts’ lack of hope when it comes to future prospects in recessions. When statistical metrics such as GDP, and projections such as the output gap begin to deviate from the plan, policy makers turn to the monetary drugs of interest rate cuts and asset purchases. They ultimately see no hope for economies in slowdowns, and must ease them away. As with the drug abuse, the high is only temporary, and it doesn’t change reality. To the extent the user continues, he or she only engages in self harm.
A few days after Nancy Reagan passed, the European Central Bank’s eschewed her pleas to ‘just say no,’ and chose to increase its version of Quantitative Easing, and to further reduce deposit rates. The full details of their monetary policy decision are below:
Monetary policy decisions
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:
(1) The interest rate on the main refinancing operations of the Eurosystem will be decreased by 5 basis points to 0.00%, starting from the operation to be settled on 16 March 2016.
(2) The interest rate on the marginal lending facility will be decreased by 5 basis points to 0.25%, with effect from 16 March 2016.
(3) The interest rate on the deposit facility will be decreased by 10 basis points to -0.40%, with effect from 16 March 2016.
(4) The monthly purchases under the asset purchase programme will be expanded to €80 billion starting in April.
(5) Investment grade euro-denominated bonds issued by non-bank corporations established in the euro area will be included in the list of assets that are eligible for regular purchases.
(6) A new series of four targeted longer-term refinancing operations (TLTRO II), each with a maturity of four years, will be launched, starting in June 2016. Borrowing conditions in these operations can be as low as the interest rate on the deposit facility.
As usual, the real fireworks came in the press conference after the decision was released, in which Draghi made his usual attempt to please everyone. The monetary doves who believe that the ECB hasn’t been loose enough with the monetary spigots got something to cheer in the announcement itself. The more hawkish who believe the ECB is being far too loose also got something when Draghi declared that this set of policy easing would be the last for the foreseeable future.
What interests me in all of this is the base attempt by yet another central banker to control an economic situation which is not going according to plan. Ever since the Great Recession, central bankers the world over have been engaged in a constant battle with the marketplace. The American version of this battle is as follows: the marketplace wanted to (and still wants to) effectively restructure the debts incurred during the go-go years of the housing bubble. Doing so would have resulted in a cascade of bank and corporate failures, asset price declines, layoffs, and defaults of various kinds. To be sure, a lot of that did happen, but it would have been a lot worse had central bankers not acted, as Draghi defiantly pointed out multiple times during his press conference.
This stance, that ‘the counterfactual’ would have been utterly devastating for Western Civilization as a whole stands as a blanket justification for mainstream economists, government officials, and commentators as to why the efforts of central bankers since 2008 were beneficial to the respective economies. The economy was a patient bleeding from a gunshot wound, the analogy goes, and the central bankers were the surgeons in the Emergency Room. Unfortunately, it relies on a bankrupt understanding of economics, which, as I will show, not only led us to pursue the wrong course of action in 2008, but will lead to the ultimate demise of the economy as we know it should it continue.
Economic Growth, and How Best to Attain It
Even though my contention is that the central bankers of the world have got it wrong, I will concede that at the very least, they have good intentions. They ostensibly want to achieve steady economic growth, and to do so with as little unemployment as possible. So where are they getting it wrong?
Let’s start from the beginning. Economic growth is a process by which the scarce resources on this planet are fashioned into goods and services which help to satisfy the many needs and wants of man. To the extent that these goods and services are better and/or more plentiful than before, the standard of living of those affected will rise. This process begins with a producer anticipating a future want or need, continues to the producer acquiring land, labor and capital, then producing the product or service, and delivering that product or service to the market. The last stage of the process is the consumption of the good or service. Reiterated for the more visual readers:
How Economic Growth Happens In A Market:
Identification/Anticipation of Unmet Want or Need
↓
Gather Land, Labor and Capital
↓
Production
↓
Delivery to Marketplace
↓
Consumption
At any given moment in time, resources are finite, thus how they are used becomes important. At the same time, there are many producers who are competing for those resources so they can attempt to satisfy the needs and wants of consumers which they have determined. The producers which get to realize their vision as opposed to those who don’t is largely determined by price. More specifically, the price of land, labor and capital, the price of the money which is borrowed to procure them, as well as the price at which those final goods can be sold.
As prices change in the market, the prospects for producers’ projects change with them. Policy makers understand this – which is why during recessions, they seek to stimulate investment by lowering the rate of interest. This lower cost of borrowing means that more of it can be done, which in theory leads to more investment and production. An unencumbered marketplace seeks to stimulate investment just the same. Its method is different from that of policymakers, in that it works via the reduction of prices and a rising rate of interest. When this occurs, the lower prices also bring costs down, which then means that the price a producer then has to command to clear a profit becomes easier to achieve.
A word here on the idea of a ‘deflationary spiral,’ the possibility of which was referenced by Draghi in his presser as ‘disastrous.’ The idea that ‘deflation,’ defined as falling prices in the mainstream, is to be avoided at all costs is a big part of Keynesian theory, some variant of which has been the dominant economic dogma for the last 80 years. This reticence among policymakers is because falling prices in recessions lead to falling profits, which lead to rising layoffs and liquidations, which lead to more falling prices, and profits, theoretically driving the economy into a ‘spiral’ like vortex. Therefore policy seeks to maintain a rising price level. This underscores the consistency among policymakers, and academics of all stripes in assigning a positive connotation to rising prices and a negative connotation for falling prices.
Taking the theory out and returning to the real world exposes this predilection for inflation for what it is – nonsense. Central bankers the world over are declaring that if the prices of goods and services economy wide go up by a certain amount each year, the economy will be in great shape. If the prices for rent, food and gas went down, however? Chaos must be lurking.
Of course, the fear of falling prices neglects the fact that humans have never ending needs and wants, such that the price level will never ‘spiral’ to zero. At some level of prices, there will be demand for goods, which means there will be an interest for producers to supply that demand. Once that price level is found, the engine of economic growth can begin anew.
Some Methods of Stimulus Are Better Than Others
Invariably, recessions happen. The short explanation for them is that humans make mistakes. To be slightly more detailed, the economic growth machine can stall for various reasons. Producers may misinterpret the need or want for their goods. Too much of them may be produced. They may be produced inefficiently. Consumers may have changed their tastes. Whatever the reason, slowdowns in economic growth are always going to happen, the same way any path to success will have blips or setbacks along the way.
The true measure of success, without being too cliché, is not how many times one is felled, but the response to each fall, and how and if one gets up. With respect to economies, how the inevitability of recessions are responded to is of utmost importance.
The difference between a policymaker and freer market method of restoring investment during recessions ultimately boils down to the following: Policy makers prefer lowering interest rates, combined with other measures, with a goal of propping up the price level. The market, left alone, would be inclined to higher interest rates with a falling price level. From the perspective of the producer the lower interest rates/higher price combo means that ultimately a higher price is required for their final goods to achieve a profit. The higher interest rate combined with a price level left to find its true means a lower price for final goods is then necessary to make a profit.
Prior to the Federal Reserve, recessions more or less played out via the market raising interest rates, dropping prices, and allowing the chips to fall where they fell. A clear example of this is the ‘Long Depression,’ a description ascribed to the period from 1873-1879. My analysis of this period comes from the work done by Milton Friedman and Anna Schwartz in their book A Monetary History of the United States, 1867-1960. I’ll start with the conclusion first: it is questionable that this period (Friedman and Schwartz start with 1869 in their analysis) really constituted a depression on the whole, given the economy improved in virtually metric over the course of the period. The following chart illustrates this:
A more qualitative description of the time period is given by Friedman and Schwartz below:
There are many other signs of rapid economic growth. This was a period of great railroad expansion dramatized by the linking of the coasts by rail in 1869. The number of miles of track operated more than doubled from 1867 to 1879, a rate of expansion not matched subsequently.
In New York State, for which figures are readily available, the number of ton miles of freight carried on railroads nearly quintupled and, for the first time since the figures began, exceeded the number of ton miles carried on canals and rivers…. The number of farms rose by over 50 per cent from 1870 to 1880 for the U.S. as a whole. The average value per acre apparently increased despite the sharp decline in the price of farm products—clear evidence of a rise in economic productivity. The output of coal, pig iron, and copper all more than doubled and that of lead multiplied sixfold.
Manufacturing shared in the expansion. The Census reported 33 per cent more wage earners engaged in manufacturing in 1879 than in 1869, though 1879 was a year containing a cyclical trough and one following an unusually long contraction, while 1869 was a year containing a cyclical peak. An index of basic production compiled by Warren and Pearson nearly doubled from 1867 to 1879.
The rapid progress of the United States in manufacturing was clearly reflected in international trade statistics. Despite a decline in prices, exports of finished manufactures were nearly 2.5 times as large in gold values and 1.75 times as large in greenback values in 1879 as in 1867.
Based on the chart alone, it is clear that 1879 America was superior to 1869 America. There was a robust increase in the value of the national product, both in absolute terms and per capita. This is despite the population increasing by 25% in a 10 year period. The money velocity, which is used as a proxy for investment and spending, remained about the same, showing that money flowed around the economy with no problem.
The quoted passage from Friedman and Schwartz provides more detail, describing the manner in which vastly improved productivity led to more product at a lower price, which is the mechanism through which economic growth is passed to the masses on the whole.
The following chart is a more visual representation of what happened over that 10 year period, and is particularly instructive with respect to the overall point made about downturns and recoveries:
The following description accompanies the chart:
Consider the velocity series on that chart. Velocity declines from 1869 to 1871, rises to 1873, and declines to 1875. So far, so good. June 1869 marked a cyclical peak, December 1870, a cyclical trough, and October 1873, a cyclical peak, so these movements conform to the cycle in the same direction as later movements. But then comes a serious discrepancy. Velocity rose some 17 per cent from 1875 to 1879, bringing the terminal velocity to a level 4 per cent higher than in 1869 and 8 per cent higher than in 1873, both cyclical peak years.
The relevant detail is the fact that while velocity fell in the initial portion of the depression, from 1873-1875, it quickly responded over the next four years to reach a high surpassing the prior peak years. This puts the lie to the deflationary spiral fears propagated by central banks and their ideological brethren, given that the price level declined during this period. Indeed, the lower price level induced spending and investment, which is evidenced by the increased national product in 1879 versus 10 years prior.
The only evidence that this period was some sort of devastating time in American history was the protracted decline in prices, which was a constant of the time. And it is only considered a negative because of contemporary misunderstanding of deflation and inflation. Even in Friedman and Schwartz’ writing, they describe the idea as money velocity responding positively to falling prices as ‘a serious discrepancy.’
The Keynesian influenced economic dogma suggests that as prices fall, humans are more inclined to hoard their money as opposed to spending it because of the anticipation that an even better deal awaits them. In reality, these decisions are governed by an individual time preference. We as humans ultimately desire goods and services, not money for its own sake. Thus a certain level of ‘natural demand’ exists, which is discovered as prices fall, shifting preferences to preferring goods versus money. It is the falling price that persuades the change of preference.
Friedman and Schwartz’ astonishment at their findings is captured in the following, emphasis mine:
…an unusually rapid rise in output converted an unusually slow rate of rise in the stock of money into a rapid decline in prices. We have dwelt on this result and sought to buttress it by a variety of evidence, because it runs directly counter both to qualitative comment on the period and to some of the most strongly held current views of economists about the relation between changes in prices and in economic activity.
…In the greenback episode, a deflation of 50 per cent took place over the course of the decade and a half after 1865. Not only did it not produce stagnation; on the contrary, it was accompanied and produced by a rapid rate of rise in real income. The chain of influence ran from expansion of output to price decline.
Modern recessions are different, in that central bankers believe that once the price level rises again, economic growth will follow. This hyper focus on the price level is backwards thinking, mainly because prices are the effects of real economic conditions, as opposed to the causes of them. Furthermore, the modern economy employs a debt based consumer spending model as its means to economic growth.
This method is particularly prone to stalling, because the impetus for spending (increasing levels of debt) cannot continue in perpetuity. At some point, markets can’t support prices at the high levels producers need to set, which in turn leads to prices falling, profits falling, trouble servicing debts, liquidations, and layoffs. Yet, the solution presented by mainstream economics is to guide prices higher again. Here’s Nobel Prize winning economist Paul Krugman, writing in reference to the recent machinations over the Federal Reserve raising interest rates:
So the Fed should not be eager to raise rates until inflation and wage growth are at least at, and preferably above, where they were before the bottom fell out.
Krugman, like most in the mainstream, do not fathom that the bottom fell out preciselybecause prices were already elevated beyond what the market could support in the first place.
A Rock and A Hard Place
The debt-driven, consumer spending method of achieving economic growth which has been employed in modern business cycles has ended up being wholly inadequate; this is proven by the fact that the result of it was the Great Recession. This model of economic growth ‘worked’ as long as debt continued to expand. As long as low interest rates enabled producers to borrow to increase output at elevated prices, and as long as consumers could borrow to pay further elevated prices for final goods, things ran smoothly. Asset prices rose on the back of all of this, which enabled further borrowing, as the rising valuations of assets provided more collateral.
This all came to a head when the debt machine came to a halt. As mentioned before, since incomes are finite at any given time, there is a limit to how much can be borrowed. Once that limit is hit, the impetus to spending, by consumers and producers alike, is no longer there. That removed impetus set in motion the slowdown leading to the Great Recession.
The Federal Reserve, the ECB, the Bank of Japan, Bank of England and the rest of the major central banks responded to the Great Recession in an unprecedented manner. In lowering the rate of interest to zero and creating trillions of dollars from nothing to buy trillions worth of bad debt and government bonds, the price level in major economies was prevented from falling further. The debt engine was restarted; assets stopped falling and summarily went higher – for a time.
The story differs depending on which constituency you are in, but the gist is that the central bankers have only been able to succeed in spurts. That is they are able to engineer prices higher, as evidenced by rising inflation, but as time goes on prices stop rising. They must then spring into action again in order to kick start inflation, or at the very least prevent deflation. This is behind the ECB’s decision on Thursday to further loosen its monetary policy.
It is a former central banker, Richard Fisher, who perhaps unintentionally, but entirely accurately, described the nature of the mission central bankers have undertaken. In speaking with CNBC last Wednesday, he described the actions of the Federal Reserve since the Great Recession as injecting cocaine and heroin into the system, which is now being maintained with Ritalin. Fisher went on to say the following:
It was a discussion about the cost-benefits of QE, and the major objective was to create a wealth effect. So we drove rates to zero, we actually drove rates to the lowest yields in 239 years of history. When you do that, what you do is you change the way you discount future yields and future earnings. The market took off the first week of March 2009 when we made it very clear, we had already doubled the size of our balance sheet, and we were gonna do more. And that was the trip wire, or at least the ignition of this great rally.
Even more instructive, towards the end of the exchange, CNBC anchor Simon Hobbes asked Fisher that, having created the wealth effect, was it imperative for the central bank to ‘protect the market,’ and to underwrite it so as to prevent the economy from suffering if and when financial markets decline. Fisher answered that it would be a ‘reckless thing to do.’
Unfortunately for central bankers, this sort of recklessness is the only option open to them. In holding deflation as an iron clad negative thing, central bankers have locked themselves into a position in which they are compelled to force prices higher no matter what. This involves printing money to expand its balance sheet as Fisher mentioned.
These printing exercises are not singular events. Prices naturally rise and fall, so if you have sworn to eliminate prices falling, you are always going to have to be on the job, because at some point down the road economic fundamentals necessitate a decline in prices. It is then you will have to print again, which in the short run boosts prices once more…until the next time.
The drug analogy brought up by Fisher is apt. In injecting large amounts of liquidity to the system, the Fed was effectively shooting up with cocaine and heroin. The ‘high’ of that drug took the form of increased asset prices, increased investment and consumption, and so forth.
Like drug use, the high doesn’t last forever. It dissipates, and whatever reality the drug user was trying to escape returns. Similarly, when the effect of one monetary loosening campaign wore off, the threats to the economy that originally plagued it resurface. The unsustainable debt burdens, rather than being cleared, remain. The inefficient companies which should have been liquidated also remain, and so forth.
The drug user can keep taking more hits of the drug, but eventually, the body will become acclimated to that dosage of the drug, and the desired high won’t be achieved. It takes larger and larger doses of the drug to achieve a high strong enough to escape reality. Since the drug is a poison, there is some amount of the drug which will prove too much for the body to handle, and it will succumb to an overdose.
The economic equivalent of this is the specter of hyperinflation. In order to maintain the ‘wealth effect,’ which entails ever rising levels of debt, rising asset prices, investment and production, central bankers will have to provide ever greater amounts of liquidity. This explains why there have been three Quantitative Easing programs in the United States, of increasing size and duration. Every time a QE program had been stopped, the economy subsequently threatened to roll back into a deep recession.
Maintaining the economy on Ritalin won’t work, it needs something much stronger. Yet, doing so will endanger the very viability of the dollar. No one knows exactly where the breaking point is, but it does exist. There is a point at which the US dollar will become worthless, as long as the Federal Reserve fashions to print its way out of recessions.
As such, the Fed is truly between a rock and a hard place. It cannot explicitly underwrite expansion of debt in perpetuity without destroying the dollar. On the other, it cannot stop the expansion of debt without destroying the impetus for appreciating prices, and therefore the recovery it engineered. The Fed, as well as all central banks, must choose between their (flawed) notions of engineering economic growth through debt based consumption, and the currency. Only one can survive.
Conclusion
Of course, central bankers can easily hop out of the box they’ve placed themselves in, but it requires them to change their thinking. It requires them to forget the notion that increases in asset prices can only be positive, regardless of the reason why the asset prices are rising. It is the same craving for an instant, better high which dooms the drug abuser. As drug users need not try to escape from the lows of life via the highs of drugs, central bankers need not attempt to escape the temporary blips in human progress – recessions – via the exuberance of stock market manias, tech booms and housing bubbles.
At the risk of sounding inhumane, the patient who ended up in the ER at the depths of the Great Recession wasn’t worth saving. Having said that, a more accurate medical analogy one can use is a cancer diagnosis. The Great Recession was the emergence of a large tumor which was threatening our well-being. After being diagnosed, the doctor told us we had two options: Undergo severe chemotherapy and radiation that might leave us bedridden for up to 18 months to two years, followed by a few more months of physical therapy. After that, the cancer would be completely gone. The other option would be to take a daily cocktail of medication, mostly to numb the physical pain and other symptoms of the tumor. We could physically go about our day as normal, but the tumor would remain, slowly entrenching itself in the body.
The latter option was chosen, as QE, TARP, and other programs constituted the cocktail of medication which numbed the pain and restarted the engine of growth from the prior cycle. Asset prices rebounded, job growth returned, and the economy looked to be on solid footing again.
However, the tumor is still with us, and thriving even. The ‘medication’ given to us by the Federal Reserve has meant that all sectors of the economy, from household to business to government, are now more saturated with debt than ever before. From the perspective of such a levered lot, the mere interest rate increase of 0.25%, let alone a proper normalization, borders on usurious. The fundamental truth remains that an economy which must have constant price increases to grow is an economy that will be prone to sudden, severe crashes as the general consumer base does not increase its income and take on debt at a fast enough pace to sustain demand at higher price levels.
“The thing worse than rebellion is the thing that causes rebellion.”
“Power concedes nothing without demand. It never has, and it never will”
Frederick Douglass
Nearly a year and a half ago, I wrote an article describing Gamer Gate and its potential place as a turning point in the culture wars. The major premise was that in attempting to alienate and demean gamers as misogynist losers, the social justice brigade overplayed its hand. It incited a violent, effective backlash, which kept the incessant march of Cultural Marxism at bay, for the time being.
As positive as the Gamer Gate uprising was, at the end of the day it was taking place in a peripheral arena. Video games are for most people nothing more than entertainment, and as such the gaming medium was always unlikely to be the springboard for the sweeping cultural changes espoused on sites such as this. To effect real change, a Gamer Gate – like force needed to emerge in the wider sphere. The waves Donald Trump is currently making in politics may be such a force, with his rise representing a major marker in the culture war.
I do think that the country is inexorably changing, I believe in all kinds of positive ways. I think we are — when I talk to my daughters and their friends, I think they are more tolerant, more welcoming of people who are different than them, more sophisticated about different cultures and what’s happening around the world.
But I do think that when you combine that demographic change with all the economic stresses that people have been going through because of the financial crisis, because of technology, because of globalization, the fact that wages and incomes have been flatlining for some time, and that particularly blue-collar men have had a lot of trouble in this new economy, where they are no longer getting the same bargain that they got when they were going to a factory and able to support their families on a single paycheck, you combine those things and it means that there is going to be potential anger, frustration, fear. Some of it justified but just misdirected. I think somebody like Mr. Trump is taking advantage of that. That’s what he’s exploiting during the course of his campaign.
Obama is correct that the country is changing, and has been changing for quite some time. Over the last 50 years, the twin forces of cultural and economic Marxism have incrementally applied in concert.
Economically, the US economy went from a goods producing economy supported by savings and investment to a smartphone app producing economy supported by exponentially increasing debt, conspicuous consumption, and administrative, legal and compliance work. The following graph is instructive.
It plots GDP against the total credit market instruments outstanding in the economy across all sectors. In the 1950s through the early 1970s, there was a very close 1:1 correlation between the two figures. From the 1970s on however, the credit line exploded exponentially, while GDP rose more or less linearly.
The bottom line is that the wealth the US economy currently experiences is engineered via debt based consumer spending. The debt must continue to rise in exponential fashion to achieve linear growth. You don’t have to be a math genius to understand that if exponential increases in debt are required to achieve the same yearly steady linear rate in growth, there will be a problem at some point given that debt cannot increase to an infinite level.
To further hammer this home, note that the last recession, the Great Recession, which was the worst since the Great Depression, came about thanks to credit shifting slightly off the exponential path. In other words in the lead up to the 2007-8 crisis, credit kept rising, but not as fast as it did in years prior. One only has to imagine what would happen if the very real possibility of credit significantly declining were to happen.
Crumbling factories: a sight all too common in the ‘new economy’
This ‘new economy’ was ultimately constructed by Keynesian influenced academics who dominated the intellectual landscape of postwar Western nations. Vowing to eliminate the business cycle so that economies would never have to experience atrocities such as the Great Depression, thinkers such as Paul Samuelson, John Kenneth Galbraith and Hyman Minsky sought to do away with concepts such as the gold standard, instead replacing those economic anchors with the supposed calculated brilliance of ivory tower dwellers.
Ultimately, the new economy brought with it the death of the American Dream. For most, merely going to college now requires going tens of thousands of dollars in debt. Assuming one gets a good paying job, and finds a girl worth marrying, it is likely that she too is inundated with student loans which now become an additional liability.
Buying a house and a car requires much more debt relative to incomes than they did 50 years ago. Keep in mind that modern incomes are supplemented by a second income earner, whereas 50 years ago it was most likely one breadwinner. On top of this, the dual breadwinner of today is likely maxed out on multiple credit cards, to achieve the same as the single breadwinner did 50 years ago debt free.
In short, the American Dream lifestyle was far more attainable in years past, and didn’t require one to sell himself deeper into debt slavery at every turn.
******
Culturally, the US has succumbed to the Marxist ideals of equality, diversity, and the promotion of ‘oppressed’ classes above all else. Note that in the Obama quote above, he immediately cites the ‘tolerance’ and worldly sophistication of his daughters and their friends as evidence that the United States has changed for the better. The cultural subversion is most pronounced in the policing of language, beliefs and attitudes through political correctness.
In order to do this, groups of people are split along the line of ‘oppressor vs the oppressed,’ in various settings. These settings include race, gender, sexual orientation, class and religion. Once the groups are assorted along the oppressor-oppressed axis, the only real rules are that the oppressed class must always be put in a positive light, and that all outcomes should be engineered to be at minimum evenly balanced between the oppressors and oppressed, no matter what.
The end result of this is that the truth is of little concern. If it happens to be in line with the narrative, fine. If it is not in line, the truth must be ignored and suppressed.
One of the most egregious examples of this in modern discourse is the myth that one in five women will be sexually assaulted during their time in college. This stat has been cited countlessly without challenge by politicians (including Obama) and other public figures. It has been the basis for college campuses across the country turning themselves into one stop shop bodies of criminal justice, enacting new legislation, and then acting as judge, jury and executioner when cases arise. The statistic has been validated, at least in terms of popular culture, via Lady Gaga’s Academy Awards performance of a song for The Hunting Ground a documentary dedicated to the topic of campus sexual assault.
The truth is that the statistic stems from this 2007 study. The fact that it was only conducted at two universities should be enough to render it questionable. However, the major flaw is the fact that the threshold for ‘sexual assault’ included things like unwanted attempts at kissing, and rubbing in a sexual manner, even while clothed. In other words, if a man ever misread how a date was going and tried to kiss a girl, or an undesired man tried to grind on a girl at a fraternity party, the girl was sexually assaulted.
To the cultural Marxist, the mutation of an unwanted kiss to sexual assault is proper because it evens the playing field between the naturally oppressive males and the oppressed females. The truth doesn’t matter. It thus opens the possibility for innocent males to have their lives ruined at the drop of a hat.
The Columbia mattress girl: the poster child for sexual assault hysteria on campus
The Duke Lacrosse case from 2006 is perhaps an even more instructive example. It has made some news again 10 years later thanks to an ESPN documentary revisiting the case which aired over the weekend.
To briefly summarize the case, several members of the Duke Lacrosse team had a get-together and ordered strippers as entertainment. The strippers came and went with little incident, yet one of them accused three of the players of rape.
This accusation ignited a national firestorm. The stripper was black, the players were all white. She was a woman, they were men. She was poor; they were students at an elite university. The battle lines of race, gender and class all converged in one story, and when viewed through the cultural Marxist prism, each individual aspect seemingly confirmed the narrative of oppression.
As a result of this, there was a torrent of outrage and protests, which are well documented in the documentary. The players were universally convicted by the public, rendering the legal proceedings to be irrelevant in many eyes. The cultural Marxist influenced grievance industry was out in full force.
The truth was that the stripper completely fabricated the story, and ultimately the players were exonerated. Despite being so utterly wrong in both the proclamation of institutional oppression and in presuming guilt without due process, some elements of the grievance industry are still defiant. Consider this quote from a Slate review of the documentary:
Instead, the case should be a reminder of the danger of hanging all hopes for race, gender, and class restitution on a perfect story that might not hold up. “Every person with every agenda wanted it to be true,” says the mother of indicted player Reade Seligmann in the film. Thanks to the bungled misdeeds of a media-happy district attorney with an eye on his own reelection campaign, they got no catharsis—they got scammed.
Note that the most important thing according to the review is ‘race, gender, and class restitution.’ This is the subjective prism through which everything is viewed according to the cultural Marxist. Truth is a subordinate. The reviewer blames the district attorney and to a lesser extent the stripper, not for the egregious violation of the truth and for ruining the lives of others, but for robbing the public of a ‘perfect story.’
Her use of the word ‘scammed’ is interesting – in that the grievance industry was looking to ‘buy’ a great story about injustice simply so it could be paraded and used to impart control to meet their ends. It is almost as though she wishes that the story was true – that there was a brutal rape of a black stripper by three well off white men – just so that the narrative would be confirmed. The harrowing experience would merely be collateral damage in what would have been a great leap forward for the narrative as a whole. Individuals and the truth are of little concern.
I cite these examples to illustrate the entrenchment of cultural Marxism in modern society. Racism, sexism, homophobia, Islamophobia and other violations are now considered extremely grave, while simultaneously extremely prevalent even in the most mundane situations. If you happen to be a man who disagrees with a woman for any reason, for example, you may be charged as a sexist.
This corrosive paradigm exists to control people. If one can lose employment and thus the means to survive because of a mean post on Facebook, the message is clearly that one must fall in line with the prevailing narrative or else. The replacement of objective truths with subjective whims typical of cultural Marxist thought has brought with it a much more unstable society.
Marginalizing Traditional America
In Democracy In America, Alexis de Tocqueville wrote the following describing the uniqueness of the American in the world:
Their strictly Puritanical origin, their exclusively commercial habits, even the country they inhabit, which seems to divert their minds from the pursuit of science, literature, and the arts, the proximity of Europe, which allows them to neglect these pursuits without relapsing into barbarism, a thousand special causes, of which I have only been able to point out the most important, have singularly concurred to fix the mind of the American upon purely practical objects. His passions, his wants, his education, and everything about him seem to unite in drawing the native of the United States earthward; his religion alone bids him turn, from time to time, a transient and distracted glance to heaven.
This judgment is negative in nature, essentially describing Americans as overly pragmatic and commercial above all else but religion. It’s a bit harsh from Tocqueville, given that in the early 19th century when he wrote this, the US was still a fledgling country trying to establish itself. The country didn’t have time for establishing a robust art and literature scene when it had to build itself from the ground up.
America built itself up, and then some through prioritizing freedom, competition and hard work, essentially being as ruthless and pragmatic as possible in pursuit of commercial ends. Christian morals generally set the boundaries. The sanctity of property rights and patriarchal family structures established a strong foundation for civilization, ensuring that the gains made could be passed on to the next generation.
So when Donald Trump came along, with his simple message of ‘Make America Great Again,’ those who felt marginalized by the ‘new economy’ and political correctness suddenly had a voice. Conversely, those who wish to see traditional American values destroyed feel a pang of worry upon hearing the Trump slogan, as it invokes an age of greatly reduced Cultural Marxist influence.
It is telling that in describing the average Trump supporter, the media goes to great lengths to mention how working-class, white, rural, male, lower income, uneducated and angry he is. President Obama recently disparaged Trump’s chances for the presidency, saying that it “is a serious job. It’s not hosting a talk show, or a reality show.” Obama went on to say that he believed that the public would be “sensible” enough not to elect Trump.
How the media envisions the average Trump voter
The way Trump voters are described is meant to cast them, and by extension anti-Cultural Marxist views in an unflattering light. The cosmopolitan, ‘educated’ big city inhabitant with an extensive palette of worldly views, opinions and sexual orientations is generally put forth as the voice of reason.
Consider the National Review’s Kevin Williamson, who continued that publications’ regularly scheduled Trump bashing over the weekend by writing an article excoriating the white middle class voters who make up a large portion of his support.
He does so by touching upon their disdain for ‘the Cathedral,’ a term Williamson notes as meaning ‘the conventional wisdom among people who live in places such as Washington DC, and New York City and work in fields such as politics and media.’ He continues by bringing up Garbutt, a small town in upstate NY which once manufactured gypsum, and deteriorated when that trade became obsolete.
Williamson uses that history as a template for what happened to industrial America on the whole. He implies that the once great manufacturing base America had was just a thing of the past, and those out of work should just get with the times. “Yes, young men of Garbutt,” he writes, “get off your asses and go find a job: You’re a four-hour bus ride away from the gas fields of Pennsylvania.”
The real venom is saved for the end of the piece:
It is immoral because it perpetuates a lie: that the white working class that finds itself attracted to Trump has been victimized by outside forces. It hasn’t. The white middle class may like the idea of Trump as a giant pulsing humanoid middle finger held up in the face of the Cathedral, they may sing hymns to Trump the destroyer and whisper darkly about “globalists” and — odious, stupid term — “the Establishment,” but nobody did this to them. They failed themselves.
If you spend time in hardscrabble, white upstate New York, or eastern Kentucky, or my own native West Texas, and you take an honest look at the welfare dependency, the drug and alcohol addiction, the family anarchy — which is to say, the whelping of human children with all the respect and wisdom of a stray dog — you will come to an awful realization. It wasn’t Beijing. It wasn’t even Washington, as bad as Washington can be. It wasn’t immigrants from Mexico, excessive and problematic as our current immigration levels are. It wasn’t any of that.
Nothing happened to them. There wasn’t some awful disaster. There wasn’t a war or a famine or a plague or a foreign occupation. Even the economic changes of the past few decades do very little to explain the dysfunction and negligence — and the incomprehensible malice — of poor white America. So the gypsum business in Garbutt ain’t what it used to be. There is more to life in the 21st century than wallboard and cheap sentimentality about how the Man closed the factories down.
The truth about these dysfunctional, downscale communities is that they deserve to die. Economically, they are negative assets. Morally, they are indefensible. Forget all your cheap theatrical Bruce Springsteen crap. Forget your sanctimony about struggling Rust Belt factory towns and your conspiracy theories about the wily Orientals stealing our jobs. Forget your goddamned gypsum, and, if he has a problem with that, forget Ed Burke, too. The white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles. Donald Trump’s speeches make them feel good. So does OxyContin. What they need isn’t analgesics, literal or political. They need real opportunity, which means that they need real change, which means that they need U-Haul.
If you want to live, get out of Garbutt.
People such as Williamson are the first to laud the ‘post-industrial’ economy, citing the explosion of tech and service sector jobs as evidence that the economy is in great shape. These jobs are supposedly more than enough to make up for the blue collar work which has been shipped overseas.
We don’t need these guys anymore because we’re a service economy now
He writes as though because it is possible to make millions creating an inane smartphone app, those for whom the best mode of employment is still in a steel factory are somehow failures. He doesn’t recognize the fact that via the onerous regulation of the Federal government, large corporations were incentivized to offshore.
He doesn’t recognize that due to the disastrous monetary policy of the Federal Reserve over the last 50 years, the average worker has seen wages command fewer and fewer goods, increasing the reliance on debt. He doesn’t realize that the resultant erosion of opportunity and the substitution of the government for men in the role of provider has led to the family destruction, substance abuse and general malaise that plagues many of these communities.
And for that, in his view, those communities deserve to die.
Standing Against the Tide
Consider that from 1980 to 2013, a member of either the Clinton or Bush family has been in the White House or among the President’s Cabinet. To the extent that the United States has deteriorated over that time, the establishment from both parties has directly overseen it. The bottom line is that modern day Republicans and Democrats are two sides of the same coin. Their continued underwhelming performance in service of the American people is leading many to repudiate the coin entirely.
Yet it is that establishment in politics, as well as the media, which has opposed Trump almost universally. Although he has addressed many of the realities facing Americans, Trump has been shouted down as racist, misogynistic, and Islamophobic. He has also been ridiculed as an unhinged, clownish bully.
In the past week alone, the Washington Post, a singular news entity, has published 32 articles comparing Trump to Adolf Hitler. The Huffington Post at first refused to acknowledge Trump’s campaign by relegating it to ‘Entertainment’ news. After reclassifying Trump coverage as ‘Politics,’ they decided to attach a disclaimer to every Trump article reminding readers what a bigot he is. The 2016 election has become less Republicans vs Democrats and more Establishment vs Outsiders, and even more specifically Everyone vs Trump.
This was illustrated during a Republican Debate ahead of the South Carolina Primary. Trump voiced his view that not only was the Iraq war a colossal mistake, but the efforts of George W. Bush did not keep us safe as is the standard Republican view, as evidenced by 9/11.
Despite being factually correct, Trump, who is the front runner in the GOP primary, was soundly booed. Establishment candidates such as Jeb Bush, Marco Rubio and John Kasich were soundly cheered whenever they made a point. In the following days, liberal media pundits did the unthinkable, and actually went to bat for George W. Bush. This was a man who had been the whipping boy for the media for the entirety of his two term presidency, yet their natural affinity for Trump’s stance was outweighed by the hatred for Trump himself.
The recent furor over violent confrontations at Trump rallies stands as another example. These incidents have come about as a result of protestors entering Trump rallies with the purpose to disrupt the rally by attempting to shout and scream over Trump while he spoke. These disruptions have led to heated exchanges between the disruptors and Trump supporters. The media, the remaining Democrat and Republican candidates and anyone else who seems to have an opinion has blamed Trump for inciting the violence, stating that protestors who were merely exercising their first amendment rights and didn’t warrant any of the heated backlash they received.
The reality is that one’s first amendment right does now allow one to infringe upon the right of someone else. Protestors have the right to peacefully assemble and express themselves how they like, but in doing so within a Trump rally, trying to shout him down, they are infringing on Trump’s right to express himself.
The first amendment does not grant the right to take Trump’s podium from him, as said by the protestor who tried to physically attack Trump on stage at a rally in Dayton, OH. The protestor said this in a televised CNN interview, in a development that drives home the disdain the establishment has for Trump. This was a man who attempted to attack a US presidential candidate on stage, which required Secret Service intervention. Instead of scorn, the media rewarded him with 15 minutes of fame with a high profile interview, no doubt emboldening other attention seekers to try the same. Is this not inciting violence?
For a group of people who have spent countless hours obsessing over the distressing ‘tone’ of Trump’s rhetoric, little is said of the tone set by constantly portraying a man as the second coming of Hitler and then glossing over someone attempting to attack him, as though it was justified given Trump’s Hitlerness.
In the post-mortem of the 2012 election, pundits across the board came to the conclusion that the Republican party was in serious trouble, owing to the fact that it purportedly had no appeal to anyone outside of wealthier whites, white men in particular. Unless the party broadened the tent as it were, the Democrats would be destined to dominate elections for decades to come.
You would think then, that a Republican candidate who was winning primaries with the most support across all demographics – while bringing record voter turnout for Republicans – would be celebrated vigorously as GOP leaders danced in the streets. This is a candidate whose supporters include an ex KKK Grand Wizard and the brother of a slain Civil Rights activist alike. Talk about bridging a divide.
However, that candidate is Donald Trump, and thus his support is downplayed. “All he has is a lot of votes,” bemoan the establishment higher ups, livid that they cannot use him to put forth their version of economic and cultural Marxism.
This belies the desperation of the establishment. Their consistent use of terms such as ‘racist,’ ‘misogynist’ ‘KKK’ and ‘Hitler’ in close proximity to the name ‘Trump’ is an attempt to connect the two in the mind of the voter. They are fearful of what Trump represents. Given the hatred the elites seem to have for America, it is safe to say their opposition of Trump shows that he loves America. Or at the very least, Trump promotes ideas that will strengthen America.
Lightning Rod
That Trump is rock-like in his convictions and unapologetic, despite attacks from all angles is important, with respect to the battle with Cultural Marxists. Trump isn’t the first high profile figure to stand in opposition to Cultural Marxism, but in running for the presidency, he is doing it on the largest possible stage, reaching the widest possible audience.
Few events are as big as a Trump rally these days
Furthermore, Trump is perhaps the only person in America who is up to the task of effectively pegging back the cultural Marxists on such a scale. The combination of his wealth, business expertise, virtually 100% name recognition, multi decade exposure to the media and charisma has enabled Trump to dominate discussion. Once in that position, he has used it to put forth an unambiguously anti-Marxist, anti-establishment message, to the horror of the elites.
The horror the mainstream media feels over Trump is in direct conflict with their wallets. The truth is that Trump’s appeal translates to ratings, which translates to revenues, and such the mainstream media must talk about Trump as much as possible to maximize their profits. In doing so, they are making his message more visible, and given how the public is taking to it, they are pushing Trump toward the nomination.
Establishment favorites such as Jeb Bush, John Kasich, Marco Rubio and Hillary Clinton were presented to the public as the acceptable choices. These candidates are all from the Clinton/Bush political family tree, meaning that should any one of them be elected, America would get more of the same, more of the cultural and economic Marxist ideals such as globalism, feminism, and multiculturalism. Jim Webb, former Democratic candidate bluntly said as much in a recent interview. This should highlight that Trump, who stands in opposition to all of them, is the choice for those wishing to see a stronger America.
The personal contrast between Trump and Hillary Clinton, the likely Democratic nominee, is especially clear. The two candidates are the embodiment of the choice America has. Donald Trump is a patriarch, the masculine head of a strong family. His wife is feminine, and remains in the background. He has five children, who despite growing up absurdly wealthy, did not succumb to the same pitfalls many rich kids do, and are seemingly contributors to boot. They have given Trump eight grandchildren to whom the wealth he’s amassed are to be bequeathed at some stage. Trump is a man of conviction; he sticks to his guns and is bold and defiant when challenged.
Clinton, while also masculine, is a pant suit wearing career girl lawyer with one child. She is running on a hyperfeminist platform, to the point where feminist icons are being trotted out to warn women that is eternal damnation awaits for not voting for a woman.
Everything about Trump’s lifestyle, from his patriarchal headship to his above replacement rate family formation, is frowned upon in Current Year America. While the ‘strength and independence’ of Hillary Clinton is praised to the heavens.
Turning the Ship Around
I have no illusions about Trump being the perfect candidate, as there is no such thing. The best one can hope for is the right candidate for the time. At this time in American history, a change away from default Cultural Marxist views is what is needed. In order to achieve that change would require a transcendent candidate to snap people out of thinking, and voting in the default way.
Trump, with his strong frame and appeal to a strong national identity, touches an emotive chord which has reached a large number of people. There are many voters who have either never voted, or previously voted Democrat who are lining up to vote for Trump.
Even those who think Trump is too much of a blowhard must concede that he is probably what is necessary to turn things around, at least initially. It’s not as though Barack Obama, for example, won in 2008 because the electorate appreciated the intricacies of his cap and trade legislation.He won because he uttered ‘hope and change!’ every other phrase, and that resonated with people in that time.
The US is like an aircraft carrier which has been propelled in the wrong direction by 50 years of cultural and economic Marxism. The result is that we’re so far away from the ideals which America was founded on that it may take a generation to get back on track. It may be the case that the maximum Trump can achieve in two terms as president is merely priming the country for a return to prominence.
However, the ship must first stop, traverse the massive turning radius, and then slowly lurch in the right direction again. It won’t happen overnight. Once Trump Makes America Great Again, more ‘grounded’ types will finally have a real platform to work from. As Scott Adams has been writing about in his serious of posts about Trump’s rise, logic and reason alone isn’t going to be enough to persuade the masses.
Change takes time
This explains the failure of candidates such as Ron and Rand Paul, and perhaps the likes of Pat Buchanan and Ross Perot before them. None of them had the ‘it’ factor Trump has, thus despite perhaps having the most effective ideas, they were relatively easy for the prevailing establishment and the public at large to brush aside.
This also makes sense in the context of crisis leadership. The main idea in Nassir Ghaemi’s 2012 book, A First Rate Madness is that in times of complexity and turmoil, the best leaders are often the ones who are unconventional and have the ability to think outside the box. During times of tranquility, more even-keeled, square-like types are better to maintain the flow.
To show this, Ghaemi explores the mental backgrounds of historical figures such as Winston Churchill and General William Sherman to understand why they were uniquely equipped to deal with the crises they faced. In contrast, square-like figures such as Neville Chamberlain, Tony Blair and George W. Bush were like deer in headlights when the pressure was on.
Trump might be ‘extreme’ and ‘not presidential,’ but in this climate being moderate means criminalizing criticism of an ever expanding list of protected classes by labeling everything as hate speech. Being presidential means refusing to acknowledge threats to society, if those threats come from those protected classes.
2016 is shaping up to be a year of economic and cultural crisis. These crises are born of the Cultural and Economic Marxist dogma. As per the Frederick Douglass quote at the beginning, the rebellion spearheaded by Trump is preferable to the Marxist status quo that it responds to. It is exactly a candidate like Trump, ‘insane’ from the Marxist vantage point, who is most apt to cure a nation afflicted with Marxism.
Conclusion
There is still a long way to go. Trump still may not even win the Republican Primary. However, what he has done to this point has been historic because he has changed the game. If he were to drop out tomorrow, at the very least he would have shown to the political establishment that the masses are tiring of cultural Marxist themes. Political pundits and media outlets can scream that anyone who disagrees with them must be a bigot until they are blue in the face – the bottom line is that in the internet era, the truth is easily spread and widely accessible to those who seek it.
Republicans in recent election cycles have adopted the strategy of trying to win by being a different shade of Marxist than the Democrats. By bringing the silent majority into the fold, Trump has singlehandedly forced the hand of the establishment. If they brazenly ignore what the masses are saying via the ballot box, it will confirm to the public that the elites have it out for them. Bringing the establishment to that predicament alone justifies the price of admission to the Trump Train, which I’ve personally been aboard since last August. No matter how this ends, it is a step in the right direction in terms of the Culture War.
Siddhartha Gautama, the Buddha, drew a circle with a piece of red chalk and said: “When men, even unknowingly, are to meet one day, whatever may befall each, whatever the diverging paths, on the said day, they will inevitably come together in the red circle.”
So says the epigraph of the film Le Cercle Rouge. To be sure, it never happened, and it isn’t a real quote; director Jean-Pierre Melville made it up. However it accurately sets the table for the film and in some ways describes life in general.
On its surface, Le Cercle Rouge is a standard heist movie. On deeper inspection it is an examination of fate, and how one’s actions can place one on a vector to an inevitable destination. The three thieves cross paths in a protracted manner. The movie starts with two of them gaining new found freedom – Corey via the ending of his prison sentence, and Vogel, a criminal, escaping from a police inspector while in the process of being transferred.
Vogel’s escape leads him to climb into the back of a parked car at a diner – which happens to be the car belonging to Corey. The two then form a partnership which is strengthened after Vogel saves Corey’s life. Corey continues to help the fugitive flee to Paris, where he informs Vogel of the opportunity to rob a jewelry store that he was given while in prison. Vogel says he knows someone who can help, and the third accomplice is introduced.
Meanwhile, the police inspector, Mattei, is working on finding Vogel. His boss is a stern man, who believes that all men have crime within them, and it is a matter of each person constantly keeping it at bay. Mattei believes that men are born innocent, and crime enters them from outside as time goes on.
Loyalty, revenge, self-discipline, honor, consummate professionalism, amongst other things are themes and traits which the main characters all show. They all have different motivations, and have all entered into this drama from different paths, but they are all currently within it, within the red circle. What they do next then sets in motion another series of events, events which will lead to more men inevitably meeting in more red circles.
To me, ‘The Red Circle’ is simply ‘the predicament,’ whatever it may be. It may be as menial as an individual getting an oil change. It may be as grandiose as international military conflicts. The bottom line is that, while we can control our own actions, they do not happen in a vacuum. The latticework made from individual decisions combine to create situations, which in turn necessitate further individual decision making. There is a certain inevitability to all of this.
With the forthcoming writings, I seek to discuss the various ‘red circles’ that fill our existence. The subject matter is likely to be diverse, given I have interests in many areas. Whether that arena is financial markets, sport, entertainment, politics, culture or something else, the main breadth of my writing will be about where we are, how we got there, and where we’ll go if we keep on the same path. To paraphrase the economist Henry Hazlitt, the mark of a good economist is the ability to look at not the immediate consequence of an act or policy, but to look at the longer effects of the act on all groups.
I believe that the same philosophy is true outside the realm of economics, and that mindset will be apparent in my work, where it warrants.
