Political Purge

"So, here's to the men who did what was considered WRONG, in order to do what they knew was right...what they KNEW was right."
--Benjamin Franklin Gates (National Treasure)

After Donald Trump and his close circle were hit by DOJ search teams, it appears that this administration is widening its nets. Tucker Carlson reports that subpoenas are in the process of being issued on dozens of Trump allies.

This is what a political purge looks like.

Obviously, this is meant to send a message ahead of the upcoming midterm elections, and to those who are considering involvement in the presidential election two years off.

Extremism and Liberty

"Tonight, our country, that which we stand for and all we hold dear, faces a grave and terrible threat. This violent and unparalleled assault on our security will not go undefended...or unpunished. Our enemy is an insidious one, seeking to divide us and destroy the very foundation of our great nation. Tonight, we must remain steadfast. We must remain determined. But most of all, we must remain united."
--Adam Sutler (V for Vendetta)

It's difficult to imagine that this administration doesn't lose more political support each time it opens its mouth. Last night Biden spoke like a geriatrically challenged version of Adam Sutler, declaring that supporters of Donald Trump and the Make America Great Again ideology constitute a "threat to our country."

If one infers that those who voted for Trump in 2020 comprise this group, then it numbers at least 70 million.

The president's press secretary added the e-word. The president, she said, sees this group as "an extreme threat to our democracy."

Moreover, "when you are not with where the majority of Americans are, then, you know, that is extreme. That is an extreme way of thinking."

Setting aside questions involving what precisely in MAGA ideology is inconsistent with the views of the majority of Americans, or, for that matter, whether MAGA ideology itself doesn't actually constitute the majority viewpoint, any American with a modicum of grounding in US history understands that our founding ancestors designed a government that protected the rights of those who not aligned with the whims of majority opinion. 

If the press secretary's definition of extremism is employed, then opinions inconsistent with the majority are to be protected from tyrannical treatment. Government is legally barred from acting against 'extremists'--again defined as those who think differently from the 'majority.' 

My sense is that Americans still understand this founding principle well enough they are are turned off by the caustic 'extremist' claims of leftists.

Disconnect

Hungry to touch
I'm eager to please
Out of control
And I hand you the keys
--Rick Springfield

Nice graphic that complements our previous post.

When you bail out bad decisions, you get _____ of them.

a) more

b) less

Jackson's Hole

"You're the disease, and I'm the cure."
--Marion Cobretti (Cobra)

The much-awaited Jackson Hole speech from Fed chair Powell is now in the books. Personally, I always chuckle when Fed heads wax about economic problems that always seem to be exogenous, and the Fed's heroic role in taming them.

The topic this time around is, of course, inflation. Powell suggests that the Fed must draw upon 3 lessons learned. One is that the Fed must take on responsibility for delivering low and stable inflation. The obvious question is why should the Fed be responsible for delivering any rate of inflation at all? Moreover, if the Fed is responsible for delivering low inflation, then how did we get to this state of high inflation in the first place?

The second lesson learned related to 'inflation expectations.' Powell asserts that "if the public expects that inflation will remain low and stable over time, then, absent major shocks, it likely will. I found that statement particularly rich. It suggests that a major goal of 'fighting inflation' is persuasion--persuading the public that inflation is low. 

Never mind the decades of easy money compliments of the Fed.

The third lesson is that the Fed must keep at it until the job is done. That is, keep monetary policy restrictive until "inflation is down to the low and stable levels that were the norm until the spring of last year. But monetary policy was extraordinarily 'unrestrictive' for more than a decade before the spring of last year. 

If that prolonged period of easy money didn't unduly elevate the public's inflation expectations, then how will the Fed 'keeping at it' with restrictive monetary policy do the opposite?

Powell once again markets the Fed as the cure rather than the disease it is.

Death and Taxes

Now my advice for those who die
Declare the pennies on your eyes
--The Beatles

The Inflation Reduction Act allocates billion$ for the adding more than 80,000 IRS agents. It appears that this will be a new breed of tax collector.

Recruiting materials say that agents must be able to 'carry a firearm and use deadly force, if necessary.'

It is said that there are only two things that are certain: death and taxes.

The IRS, it appears, is gearing up to provide for both.

Legitimacy by Association

"Looks like you're running with the cool kids now."
--Meg Harper (Joe Somebody)

Tom DiLorenzo discusses the long train of 'witch doctor' economists that have infiltrated government for generations. What gives these charlatans staying power?

It's primarily about perceived legitimacy that these so-called 'experts' bring to an administration. Fancy degrees and awards bring an air of distinction that wows the masses. By employing the witch doctors, politicians associate themselves with thought leaders. 

Legitimacy by association. And a nice gig for the intellectual class.

Moreover, because those who refuse to think for themselves are prone outsource the brains to others, political partisans can program minds by employing witch doctors ideologically aligned with the partisans' agendas. Blindly following expert advice puts the followers under the thumbs of the politicians.

The antidote to this cronyism? People who think as they seek truth.

Raid on Reason

Now did you read the news today?
They say the danger's gone away
But I can see the fires still alight
They're burning into the night
--Genesis

As these pages have frequently noted, leftists love to manipulate language in their favor. They employ positive substitute symbols and euphemisms to advance their agendas.

Case in point. The recent invasion of Donald Trump's Florida residence is no longer a 'raid.' Instead, it is now being deemed as an execution of a search warrant.

The raid, plainly, is on reason.

Hiroshima Myth

"The principle of law in every civilized society has this in common: Any person who sways another to commit murder, any person who furnishes the lethal weapon for the purpose of the crime, any person who is an accessory to the crime...is guilty."
--Judge Dan Heywood (Judgment at Nuremburg)

On August 6, 1945, a United States B-29 dropped the world's first atomic bomb in Hiroshima, Japan. Three days later another A-bomb was dropped on the city of Nagasaki. Japan surrendered later that month to end WWII.

An estimated 120,000 perished in the two blasts with hundreds of thousands subsequently maimed or killed from radiation exposure. The lion's share of casualties were civilians--mostly women and children.

The popular myth trotted out to justify this carnage is that, by bombing the Japanese mainland and inflicting death and destruction to a degree that forced a surrender, the US subsequently avoided more than a million additional military casualties that would have resulted from the ongoing conventional war campaign--including an inevitable invasion operation of Japan.

As discussed in this article, this amounts to little more than the rationalization of atrocity.

The fact is that Japanese officials signaled their willingness to conditionally surrender earlier in 1945. Their condition was that Japanese emperor Hirohito would remain in power and not be subjected to criminal investigations after the war. The idea was to preserve as much Japanese culture as possible, and to provide continuity to facilitate economic and social functioning in post-war Japan.

Sadly, President Truman and his lackeys were unwilling to accept anything other than unconditional surrender--quite ironic since after the war Hirohito was indeed permitted to remain as emperor until his death in 1989. 

Why, then, were the bombs dropped?

The answer is that Truman and his staff, particularly his confidante and future secretary of state James Byrnes, had their eyes on Russia. Using atomic weapons would demonstrate US military strength to Russia and keep Stalin & Co at bay as the superpowers entered a 'cold war.' A secondary reason was that Congress could be assured that its secret appropriation for the Manhattan Project was bearing fruit that created near and longer term benefits.

Following the bombings, however, many officials, including Commander of the Third Fleet Admiral Bill Halsey, Fleet Commander Chester Nimitz, Chairman of the Joint Chiefs of Staff William Leahy, and atomic theorist Albert Einstein, condemned the action. 

This is when the propaganda machinery got into gear. Editorials and articles began to hit the pages of newspapers and magazines about the military necessity of the bombings. The myth has been continually reinforced, usually around this time of year, by political leaders and a complicit media. 

Perhaps in a brief moment of conscience, Henry Stimson, who was secretary of war at the time and chief propagator of the subsequent Hiroshima myth, wrote in his memoirs, 

"Unfortunately, I have lived long enough to know that history is not what actually happened but what is recorded as such." 

Indeed, Mr Stimson. My sense is that you and many of your contemporaries will face, quite literally, the trial of your lives on Judgment Day.

Blatant Lying

"Richard, it profits a man to give is soul for the whole world...but for Wales?"
--Sir Thomas More (A Man for All Seasons)

An administration bureaucrat looks straight into the camera and claims that it is "factually not true" that gasoline prices were rising prior to the Ukraine conflict.

These people will use any means when attempting to manage narratives. Blatant lying included.

Inflation Reduction Act

I bought a novel, some perfume
A fortune all for you
But it's not my conscience
That hates to be untrue
I asked of my reflection,
"Tell me what is there to do?"
--Squeeze

As we've discussed, leftists are rarely honest with their rhetoric. They label things largely contrary of their actual effects.

Cast in point: the proposed Inflation Reduction Act. 

As Ron Paul discusses, the bill does the opposite. It increases government spending by hundreds of billions of dollars. It takes resources out of the hands of private citizens and puts them into the hands of bureaucrats.

Not only does this increase the risk of capital misallocation, but it must be funded. To the extent that citizens are taxed, it reduces economic resources available to people during an era of high price inflation and slowing economic activity.

It is a universal truth that slow economic activity motivates easier central bank monetary policy (read: inflation).

To the extent that taxes won't cover the spending, then those funds must either be a) borrowed, which taxes future incomes, or b) printed (the reason why inflation is called the 'invisible tax').

There is little doubt that the Inflation Reduction Act will ultimately result in more inflation, not less.

Keep Him Out

But you won't get too far
'Cause you got to blame someone
For your own confusion
We're on guard this time
Against your final solution
--Red Rider

Interesting thesis about why leftists, including many on the conservative side, cannot let Trump back in the Oval Office. The primary answer is that it is not Trump, but the tens of millions of 'country class' that he represents. 

The elite cannot afford to have give those rubes, Clinton's 'deplorables,' a voice in the political process. And to keep that from happening, the ruling class will stop at nothing to keep that from happening.

The author suggests that leftists have a string of plans in the queue to keep Trump out of office.

Plan A. Use the Jan 6 show trials to keep Trump from running/winning. By most accounts, however, that isn't working.

Plan B. Indict Trump for 'seditious conspiracy' using the DOJ and other machinery of the deep state. Of course, it will be difficult to convince a large fraction of Americans that any such charges hold a modicum of legitimacy.

Plan C. Declare Trump ineligible to run under the insurrection clause of the 14th Amendment. The legitimacy issue still holds.

Plan D. Simply beat Trump at the ballot box. The trouble is Democrats have no obvious candidate that could compete with Trump head-to-head this time around.

Plan E. Cheat (again) in the election. There is no question that Democrats will do what they can get away with (again) this time around. The issue is, given the heightened public awareness about election process shenanigans, how much they will truly be able to get away with in 2024.

Plan F. Take to the streets and riot. Do this until the 'proper' regime is secured in the White House.

It is easy to see why leftists are husting to grab guns ahead of this cycle.

Recession Now

When the good times never stay
And the cheap thrills always seem to fade away
When will we fall
When will we fall down?
--Toad the Wet Sprocket

The traditional definition of a recession is two consecutive quarters of negative real GDP growth. This has now occurred based on Q1 and Q2 GDP prints.

As these pages have discussed, political partisans are trying to manage the narrative away from the traditional definition--claiming that recessions only officially occur once they are declared by the 'experts' at the National Bureau of Economic Research (NBER).

Conveniently, such a declaration would occur sometime after the midterm elections in November.

What the partisan narrative managers fail to note is that two consecutive quarters of negative real GDP growth have always coincides with NBER's formal declaration of recession.

Social Networks and Political Correctness

"I'll be subtle. I'm good at subtle."
--John Spartan (Demolition Man)

Political correctness can be defined as behavior intended not to upset a particular group in order to advance an agenda. It often manifests in manipulating language. Political correctness is pretense; it is not genuine.

Political correctness is a product of social learning. Observing others. Watching what gets sanctioned. Fitting in.

As such, it should be no surprise that political correctness has increased alongside capacity for social networking.

Imagine a research experiment studying two groups of people. One group is highly plugged into their phones, tablets, and other social networking devices. 

The other group is rarely, if ever, online. 

Which group is likely to exhibit more politically correct behavior?

Narrative Management

Nancy Oliver: What's the matter with the mistress? She don't look ill to me. Is she?

Elizabeth Tompkins: I don't know. Not as I can see. But the master keeps telling her she is.
--Gaslight

Leftists believe that words matter more than actions. This is why they respond like juveniles on the playground when someone says something they don't like. "He called me a name!"

Indeed, it seems that many leftists view hurtful words as equivalent to acts of physical aggression--acts that justify physical violence, perhaps by government agents, to quell the 'hate speech.'

This is also why leftists obsess with controlling narratives. Narratives are story lines. In reality, these story lines may be true or false. But regardless of whether narratives represent fact or fiction, leftists believe that they can manipulate behavior in their favor by manipulating language.

Controlling the narrative often begins by changing the definition of a word or phrase that is central to the storyline.

Leftists are currently focusing on the meaning of 'recession.' Rather than using the traditional definition of two consecutive quarters of negative GDP growth (which likely has occurred in Q1 and Q2 of this year), leftists are now arguing that the definition is more nebulous and requires (very conveniently) a panel of experts to determine--perhaps far after the fact of the recession's actual commencement.

The narrative can then manipulated. We're still in an economic expansion, they say, because the experts haven't called a recession yet.

Should recent history be any guide, leftists will also try to recruit their media cabal to label alternative narratives as 'disinformation.'

If they can get the public to buy in, then perhaps leftists can postpone widespread perception of recession until after the November midterm elections. Leftists well know that people experiencing economic hardship are prone to vote out people and parties in positions of political power.

This time around, that would be Democrats.

Use your capacity for reason. Ignore the gaslights of narrative management.

Unfair and Unbalanced

And you may ask yourself,
"Well, how did I get here?"
--Talking Heads

Pew study finds that the media generally does not agree with the 'fair and balanced' approach to journalism. While more than three quarters of adults believe all sides of an issue deserve equal coverage, only 55% of journalists do.

Political ideology moderates belief in 'bothsidesism.' Approximately 70% of journalists indicated that they worked for outlets that lean left. 

Unfortunately, the survey did not ask respondents how they themselves leaned politically--or at least it was not reported. However, adults indicating affinity for the left were less likely to endorse 'bothsidesism.'

In a nod toward their increasingly progressive higher ed training grounds, younger journalists appear less likely to strive toward balanced coverage than older journalists.

It would be interesting to see some longitudinal data here. Has this sort of slant been on the increase? Or is it the same as it ever was?

War Fatigue

Armchair warriors often fail
And we've been poisoned by these fairy tales
--Don Henley

Governments wanting to engage in war with foreign entities must win consent of the citizenry to do so. If they view the war as illegitimate, the people have capacity to shut the war down via several avenues, including voting officials out of office, withholding funds for military resources, or even overthrowing the regime prosecuting illegitimate war.

Consequently, governments must convince people that their war is just. They must do so at the outset of the conflict, and then continue to do so. Because war requires ongoing sacrifice in order to fund the war effort, it is possible that enthusiasm for war will wane as people increasingly regret what they must forfeit as conflict drags on.

It appears that support for US involvement in the Ukraine conflict is already waning. Surveys suggest that the American public is increasingly wary of US efforts to harm Russia in manners that hurt the domestic economy.

That, of course, is precisely what sanctions do. Any effort to restrict production and trade with entities abroad damages standard of living at home.

As more Americans realize that sanctions are not unilateral, this administration loses its public grant of legitimacy for engaging the country in war.

Art of Hybrid War

"War is a continuation of politics by other means--von Clausewitz."
--Captain Frank Ramsey (Crimson Tide)

Interesting post that fades mainstream media claims that things are going poorly for Russia in Ukraine. The central claim is that Russia is slowly and deliberately tightening the vise around territory that is strategically meaningful. 

Moreover, by keeping the pace deliberate, Russia puts more pressure on Western economic systems that have essentially sanctioned themselves into positions of peril. That peril includes long-term damage to a dollar-denominated financial system.

Russia may be honing the art of hybrid war.

Imagine the Compliance

Now did you read the news today?
They say the dangers gone away
But I can see the fires still alight
They're burning into the night
--Genesis

Pfizer's CEO dazzled the audience at the World Economic Forum with the spectre of ingestible computer chips that signal to authorities that a drug has been ingested.

"So imagine the implications of that...the compliance."

Surely the audience did just that. After all, the WEF is the home of the Great Reset and Build Back Better agendas.

And Pfizer (PFE) is the producer of one of the primary pharmaceutical vehicles employed during the pandemic to help advance those agendas.

Imagine the compliance indeed.

no position

Futility of Saving

Who's gonna tell you when

It's too late?

Who's gonna tell you things

Aren't so great?
--The Cars

Nice graph (taken from this article) showing the futility of saving cash as a means to beat inflation. The inference is that cash hasn't covered cost of living increases in years.

This graph is conservative, given that inflation numbers under-report price increases. Stated differently, the actual ability of saving to cope with price inflation is significantly worse than suggested here.

What corresponds to the step changes down in earnings on savings? Easy Fed monetary policy that went into overdrive with the onset of the quantitative easing regime in 2009.

Another Hot Print

It's too close for comfort
This heat has got
Right out of hand
--Bananarama

Measured inflation still coming in hot, with monthly CPI printing at +8.3% YOY. This is far higher than the 'expert' predictions in the 6% range as pundits postulate that 'peak' inflation has already occurred.

Futures immediately sold the news, as the knee jerk reaction is that the Fed will have to behave more hawkishly.

That said, I wouldn't want to be short here. Seems like there's a lotta bad news already baked in--at least in the near term.

There is also the question about how far the Fed can actually raise rates without breaking the system. I personally suspect the answer is much lower than current consensus.