Monday, October 17, 2011

Crony Communocapitalism and The Ponzi of Ideology

What we’ve got in the US specifically and the world generally right now is not democracy so much as plutarchy. It is not capitalism so much as cronyism. It’s an artificially planned, money printing, price printing machine which actually resembles species of Eastern Bloc communism in many ways. It is a centrally-planned fiat currency system in which a quiet cabal of central bankers in cooperation with trillionaire dynasties run their Gulag Planet of debt slaves, complete with their own “Ministry of truth” masquerading as the “news media” like CNN, for a dose of constructed reality in between stints of the Brave New World feelies like Jersey Shore and Call of Duty, helping us keep jacked into a Matrix of gossip, guns, and gadgets. The great “innovation” of 21st century finance on the “lie told 100,000 becomes truth” epithet is the even simpler “price spinning”, where financial propaganda divisions of the banksters like CNBC who weave reality around prices manufactured not through free market “price discovery”, but through fraudulent mark-to-modelling of assets, Weimar-style running of the printing presses, and leaning of JP Morgan’s 78 trillion derivatives black hole onto the price of gold and silver, or anything else they’d like to keep depreciated to keep the Wile E Coyote that is our Global Financial Ponzi Scheme from looking down.

Actual free market capitalism where competition actually occurs only really exists in small and narrowing bands of reality, perhaps 20% or less of the economy. Some of these small pockets of actual free market exist if you go out and become an independent contractor, or try your hand at a computer company startup in Silicon Valley. But even companies like Steve Jobs’ “rebel revolutionary” Apple has become the same-old competition-smothering trust that condones child labor, a 16 hour work day, supports genocidal Congolese warlords who supply cheap bloodstained minerals and -- antithetical to that Riddley Scott ad overused as a metaphor for Jobs by glorifying MSM mythmakers – Apple is helping 2014 look a LOT like 1984.

Even tech companies like Google share more in common with the KGB It’s like saying, “If people don’t like Coke, they can always drink Pepsi.” Don’t like eBay? You can always exert vast amounts of your personal time and energy hand-peddling your products to the 3 billion people on the internet for a fraction of the targeted eyeballs you’d get from eBay. Companies in the search business, like companies in the soft drink business, follow a Power Law distribution, that is, the vast majority of market share is inevitably controlled by a tiny minority of companies, and the barriers to entry of any new entrepreneurial venture into an existing mature industry, such as soft drinks or search, are so immense that the free market competition factor is so distorted it becomes essentially nil, ultimately resulting in a universal attractor state of near-monopoly. Oligopoly, if you like. This is why almost all small businesses ventures are in smaller, non-Power Law sectors (What Nassim Taleb calls “mediocristan”) like restaurants, or are inventing some new business niche who has not yet developed a monopolistic metastasis (as the venture capitalist who started Google once did).

This effect goes DOUBLY for internet companies later in life who, on top of the business Power Law, have the monstrous advantage of software lock-in and network lock-in. Software lock-in manifests as the substrata of established code, protocols and API upon which new programs are built become exponentially more difficult to dislodge and revamp as time passes. Network lock-in is best illustrated in the eBay example where the user utility of the service (internet auctions) increases dramatically with increase in user base, thus creating a winner-take-all feedback loop causing the company with the most users to become the Master Node for that particular market. The best utility for auctions (most eyeballs, cheapest prices) can be garnered via eBay, so users will naturally continue to flock there until either they shut down for whatever reason or people stop wanting to auction their stuff off (not likely). In the case of Facebook, since they've become the only SN game in town, "opting out" puts you at a crippling networking disadvantage in the business sector, and leaves you out of the conversations and connections between friends and family near and far. Ultimately this free market spiel "I can leave anytime" is an illusion of choice: for their particular service there is no competition and the opportunity costs are so great that many simply cannot [i]afford[/i] to choose abstinence. In the same way that nobody had to go around with a prod "forcing" people and businesses to get online: the internet simply became so ubiquitous you either got with the cyber-program or you got left in the dust(bins).

The Google of the pre-ubiquitous-internet era was of course Microsoft, who controlled 90% marketshare of OS and productivity software (90%… seeing a pattern here? ). So Google dominating the search and online ad market (and recommendation engine market and self-driving cars and libraries, and…) is not some unexpected Black Swan out of left field. Thing is, it gets scary when they start branching out into email, mobile phones, mobile OSes, and via the Google suite of online docs spreadsheets etc. they’re trying to SUBSUME all of Microsft’s necropolising empire. And they’re not stopping there.

Markets, socialism, these are nothing new. We've been doing mongongo nut commerce in Silk Roads and Trobriand circles millenia before capitalism was ever pulled out of the ass of a blowhard looking for a neologism vehicle to acquire tenure. They're natural occurances evolutionarily emerging from macro-level human psychology and social groups. Startups are all born capitalist then grow up communist. Really any of the “mature” sectors of the American economy are generally oligopolistic, essentially run by power-mongering bureaucrat cabals made up of crony capitalism in the private sector and crony communism in the public. We’ve got Coca-Cola, starving Indians and outright paying paramilitaries to murder union leaders in Colombia, subsidized by the government and competition-free with the other half of its oligopoly and price-fixer-in-crime Pepsi. It’s the same story in virtually every domain; pharmaceuticals, where politicians help price-warp the cost of healthcare by destroying competition to astronomical levels in exchange for a high-paid seat on the board of a drug company, agriculture with the Monsatan we all know is literally “destroying” the competition with help through GMO intellectual property laws, and then there’s the uber-communists “Too Big To Fail” banking where it’s not just corporate welfare but we’re being bloodlet for their MISTAKES through redistribution of wealth. In all these industries, a tiny aristocracy of companies dominate the market and buy the government into their back pocket. Communism and capitalism are not “Operating Systems” you choose and install into your country’s “machine”, they’re hodge-podges of mushy ideas that occur in a patchwork of different instances, they’re a gradient that emerges -- just as the two comp-sci grads Larry and Sergei’s startup starts out as free-market competition against other idealistic young entrepreneurial seeds fed by hope n change and LAN night pizza parties, but eventually slides towards crony-capitalism / communism as they take 60% control of the market, begin buying out the FCC and actively spying on the populace not unlike the Soviet Union’s wiretaps, their search-filtering auction like the KGB censors. Nassim “Black Swan” Taleb succinctly summarized it in his Bed of Procrustes aphorism. Economists like Marx/Smith and those of today who championed mean variants and the Gaussian are Procrustes, the mythical Greek blacksmith who had a single bed of a single length. Rather than adjust the bed to fit people’s height, he would stretch them or chop off their legs so they would fit the bed. Similarly, the “experts” we trust, rather than adjust their theories to people, rather attempt to force people to fit their theories, causing much pain and suffering, just as doctors killed more people than they saved – AKA iatrogenics -- for millennia with their blood letting and other “theories” till only very recently with the introduction of double-blind trials. These theories never ever work according to any Marx or Smith’s plan because they’re just the brain-ejaculate of pseudo-science academics that attempt to herd fundamentally people into their panglossian clockwork. And like Des Cartes’ mind/bodydualities and classical physics’ separation of space/time which muddled thought in neuroscience and astrophysics respectively, we’re forced to live in the sticky residue of the capito-communism dualities until Haley’s comet swerves out of orbit thanks to the Jupiter-sized gravity of Jamie Dimon’s two-Earth GDP derivatives and ends the Anthropocene period with a fiery crater the size of George Soro’s blood money stash.

What we have now is Stalin’s “planned economy” where bankers and government officials convene in imperial suites of Geneva penthouses to discuss “the plan”, then Bear Sterns, Lehman, the American People are premeditatedly destroyed via financial WMDs, then the subsequent “divvying up” of the spoils is fully orchestrated again behind the scenes of Obama’s North American Kremlin. Just as Steve Forbes and John Paulson who met yesterday in constitution square in Greece at the Bretagne Hotel to discuss how to divide up the Greek assets at pennies on the dollar like komodos circling a faltering water buffalo, dying from the bacteria-festering wound they inflicted earlier. “You buy when there’s blood in the streets,” said a certain Rothschild, who spread the false rumor that Napoleon had won at Waterloo, nosediving the price of his government’s assets to zero, then proceeded to buy the consorts up at pennies on the pound, giving unholy birth to the wealthiest family in England. Except now they don’t even need to spill blood on the streets, don’t need to start a hot war with tanks and bombs (although they do quite well peddling tanks and RPGs to dictator-to-be rebels). Now, they just take the “blood” spilled by the American people during the subprime, near-prime, prime Ponzi-Land heist, use those blood-stained toxic CDOs and derivatives, have their supercomputers dump those all over Greece’s streets (now literally full of potholes and hordes of heroin addicts thanks to the centrally-planned financial decimation) then rush in and buy up Greece’s infrastructure at – you guesses it – pennies on the dollar. This is a Kurzweilian Singularity except the asymptote is skyrocketing down instead of up; it’s tech-propelled exponential dystopia via wealth stripping. This is High-Frequency-Rape, using Goldman Sachs’ numerate-invented Real Doll machine dildos to fuck your pension fund and your kid’s future fund a trillion times every nanosecond, scraping off a little membrane of pennies each time till you’re hemorrhaging wages and 401k and literally bleeding to death from a workplace accident that isn’t covered by your Gulag-care.

The problem with Marx is not that capitalism will eventually eat itself like some globe-spanning self-destructing Ouroboros – which it surely will, even if the bankster-politician crony-capitocommunism believe they can paper over the yawning debt vortex forever by running the currency presses and “lending more” -- it’s Marx’ failure to recognize that this is not a feature unique to capitalism but rather to the Homo Sapiens species. It’s easy to forget we’ve been at each other’s throats since Cain picked up his dad’s femur and bashed his brother’s head in. We’ve been in feudal warring chaos for most of our career as cortically-bloated monkies, interspersed by brief periods of “civilization”. At the highest levels, economics and government, capitalism, communism, all the “isms”, the messianic faiths born out of the Enlightenment, these all dissolve back into the dissertation word salad from whence they came, and become simple primate feudalism at best or barbarism at worst. In the same way that energy and matter generally appear distinct, yet reveal themselves to be the same thing in extreme conditions, so does money and office melt away into naked Darwinian power struggle when the blue chips are down on the table. The paying off of regulators and Obama in the boardroom of Goldman Sachs is the same as the bullying and leg-breaking of the non-compliant journalists by Putin’s KGB retainers. The mass execution of Stalin’s political opponents is the same as cronycapito-communist China’s mass-dissapearance and re-education of dissidents through hard labor soldering iPad components for a bowl of rice soup a day. Even if you don’t have dollar capital there is always a currency exchange – and the ultimate commodity is power. Even in a peacenik greener non-profit NGO meeting, you can see the power dynamics play out as a “higher up” strong-arms funds to his idiot brother’s doomed solar leg-warmer idea or to his niece’s birthday party at the Sheraton. You see it when President Obama gets before a mic and says, “We can’t prosecute the bankers because… what they did was immoral, inappropriate, or reckless, but not illegal,” as he did today, outright lying to the American people and criminally failing to do his job of enforcing our nation’s laws, effectively making himself looter criminal-in-chief seeing he is the one person in the best position to stop this.

The naivete of Marx is not that capitalism – or any system – will collapse, but that what rises from the ashes will not simply be capitalism 2.0, or some cocktail mix slightly more socialistic than capitalistic. Rather than some socialist or communist wonderland in which people all hold hands, sing “Heal The World” and engage in harmonious “cooperative enterprise” and public ownership, magically satisfied with their single identical house, car, and government-issue gadget “dictated” by the economics central planners, who are magically as uncorruptible as Mother Theresa and wouldn’t think to disappear/kill off dissidents and send the population to The Gulag for “re-education”. It was just published in the Wall Street Journal the other day that brain-damage patients make the best bankers – because they lack empathy and the ability to care about the millions of people’s lives they holocaust when they blow up a society in a mass-short, then mop up the remains for “pennies on the dollar”. Essentially meaning that the largest, most powerful entities in the world come to be run by subhuman psychopaths who live merely for the safari-like thrill of adding zeroes to their accounts and notches to their belts each time they strangle a $300,000 slave-girl they beat in an auction against a Saudi prince. This is precisely the pattern of history of socialist and communist revolutions which have inevitably led to some heartless psychopath – be it a Stalin or a Pol Pot or a People’s Republic – snatching up the reigns while all the “pure communists” are sitting around singing kumbaya and holding Woodstock readings of Das Kapital. “Oh, please don’t desire status and prestige and wealth Mr. megalomaniacal ruthless power grabber, this is a stateless, classless society of egalitarianism, where we work 2 hours a day, read the classics and practice archery in the afternoon!” Then Mr. power-hungry tyrant who wasn’t breastfed or who never knew his dad or whatever comes down with his gang, the “Fuck Peace Party”, mows down all the lamb holding hippies with AKs, and goes on to assume power and become the next Jamie Dimon or Vladimir Putin or Voldemort or Dick Cheney or whoever. End of Utopia.

The truth is it’s these extremes, the belief in the savior-power of these old obsolete ideologies themselves; capitalism, communism, neoliberalism, libertarianism, these myths people bow down before in their echo-chamber cathedrals, their Harvard auditoriums, these “Too Big Too Fail” concepts that inevitably unravel and fail us like bricks toppling from the Berlin Wall, fail like every rigid glorified Gaussian Copula and Collateralized Debt Obligation sold as snake oil by financial conjurers, these cons that lure us into their “get happy quick” Ponzi Schemes, lull us into a false sense of solvency, and that ultimately blow up in our face and leave some psycho running the show.

The truth is, human society is like marriage; you don’t just go out to “” type in your eye color and hobbies, find out if capitalism or communism is Mr. Right through some reality-TV competition, get swept off your feet, have a Jennifer Anniston movie wedding, and then live happily ever after, lounging in the fields, reading poetry and practicing archery as Marx would have you believe. Marriage is a never-ending challenge that you’ve got to work hard at every single day to make work. Before living together you have these two-dimensional ideals of each other, prince and princess first-date charming, which over time you come to realize were stupid stereotypes, and they’re just regular people, really capitalistic in some ways and socialistic in others, and the categories become empty and meaningless the more time you spend together, and it works as long as you keep communicating and renewing the relationship. If you stop communicating, let things slide, check out to watch American Idol, you’ll soon find tensions growing, building up like bubbles of debt, resentments piling up like red ink on the relationship balance sheet, lies weaving from lies spreading out into a fractal web like fraud. In passing guest-room meetings growing fewer they say the relationship is the most valuable thing but it’s really just toxic assets they can’t wait to dump. They start cheating on you with politicians, plotting against you in anonymous hotel rooms how to take your house, short your stock, and the pleasantry-masked chats devolve into outright blow-ups, economic meltdowns. Then one day you wake up and wonder, “who is this monster and how did they get here?” when it was you who put them there.

I believe in government by the people for the people. Because of this, in any society, whatever their ideological leaning be capitalistic or socialistic, if they check out of their process, fail to self-govern, then some crazy mean assholes will take over and do the governing for them. When that happens, the tree of liberty must be regularly watered with the blood of said tyrants. The capitalism-communism spectrum is a false binary which should be rotated to a choice between “cronyistic plutarchy” to “democratic, regulated, entrepreneurialism” which is determined only minimally by the ideologies and laws adopted by the government and overwhelmingly by the people’s ability and willingness to participate in regulating themselves and their leaders. Obama’s refusal to prosecute the bankster criminals who are commiting a pre-meditated class massacre upon the 99% only reinforces this point that we can’t sit around waiting for the existing government, who is in on the scam, to save us; we can’t wait for the commander in chief to order his Navy Seals to take out the REAL pirates robbing us because he’s getting a cut of the booty. No, we’ve got to save ourselves. Occupy Wall Street is people waking up, getting out in the street, taking aim at the pirates, governing themselves again, taking their future into their own hands.

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