My Take: Ten Years after the Crash

It was September 15, 2008 that the financial services firm Lehman Brothers collapsed and the Federal Reserve Board, Ben Bernanke, proprietor, decided not to bail it out.

Then followed the worst financial crash in the United States of America since the Great Crash of 1929. Look: crashes and panics are part of capitalism, in the same way that invasions and famines are part of agriculture. Oh, and slavery. I'd says that panics and crashes and the subsequent recessions are the better option. But I am biased.

So who was to blame? Greedy bankers? Evil Wall Street firms? Derivatives brokers? Regulators asleep at the switch? Smarmy politicians? Or all of the above?

The following is my individual, idiosyncratic analysis. Your mileage may vary.

The first thing to understand is the message of Walter Bagehot's Lombard Street. La Wik's page here. Bagehot wrote the book after the Panic of 1866 following the failure of Overton, Gurney, and Company, "a wholesale discount bank located at 65 Lombard Street, London". During the crisis the Bank of England was unable to stop the panic with loans from its own resources, so it had to be backed up by the UK government.

For me, the message of Bagehot's book is his analysis of the credit system, that is, borrowings in money-denominated securities. The fact is that the credit system is a maze of borrowings to and fro, so when a question arises about the "soundness" of a financial firm -- such as Lehman or Overton -- the people buying and selling in the credit markets start to wonder. They ask themselves how deep their own counterparties were invested in the debt securities of the failed firm. And they get cautious; they wonder if they will get paid. Hello credit crisis.

So Bagehot decreed that two things are necessary for a healthy financial system. First, securities must be properly collateralized so that they can be liquidated without loss to the lender. Second, borrowers must be able to service the loan. If either of these are in question, you gotta panic.

In the boom of the 2000s there were lots of insufficiently collateralized loans which couldn't be fully liquidated if the borrower defaulted, and there were lots of borrowers that really couldn't service their loans. So when the housing market peaked in 2006 there were a lot of insufficiently collateralized mortgages around. Not good.

But why were there all those bad mortgages and "liar loans" to people with bad credit? Greedy bankers? Not exactly. Regulators asleep at the switch? Come on! When do regulators ever do their job?

The second thing to understand about the crash is that it had been federal government policy ever since the Great Depression to subsidize the housing market, to help Americans become homeowners.

One of the policies to help this out was the 30-year fixed mortgage. Hello sanity? You mean to say that you can forecast the economy and the housing market out 30 years and still have a solid security? Before the Great Depression the most you could get was a 10-year mortgage with a balloon payment at the end which meant that you would have to refinance at the then going interest rate.

Plus the government in 1938 started up the Federal National Mortgage Association, a government-sponsored enterprise that issued bonds based on baskets of mortgages. No problem, right, particularly if Fannie Mae bought good solid well-collateralized mortgages? Well, it all started out pretty nice, but then things got a bit out of hand, as this chart from usgovernmentspending.com of Agency Debt, mostly Fannie Mae and Freddie Mac, shows.



Golly. Who knew! Agency Debt went from nothing to 10 percent of GDP in 1980, then all the way to 55 percent of GDP when the crash came in 2008. Now remember, the federal debt is about 100 percent of GDP. So here we have an additional 50 percent of GDP effectively guaranteed by the federal government. What could go wrong?

And as the years went by the quality of Agency debt went down, as various federal mandates required banks to extend mortgages to less-qualified borrowers (to fight evil red-lining). And then Fannie Mae and Freddie Mac started goals of increasing their mortgage purchases of less-qualified borrowers and less collateralized mortgages. Then the derivatives guys got into the action, by using derivatives to lay off the risk on the quality of mortgage packages and provide triple-A securities required by insurance companies and pension funds. What could go wrong?

Thirdly, little Ben Bernanke, Chairman of the Federal Reserve System, failed to follow the dictum of Walter Bagehot that there should be a "lender of last resort" during a financial crisis. Bagehot's idea was that the Bank of England should "Lend freely. At a high rate of interest. On good banking securities." But even then, the Bank of England didn't have enough equity to do the job, so it relied on the credit of the UK Treasury. In our day, I would say that lender of last resort means you don't let any financial institution collapse. Period. Oh, you strip the owners and stockholders of their equity. You make a clean sweep of mansions in the Hamptons. You even make the bondholders take a haircut. But that is after the panic is over. And you use the full faith and credit of the United States government to keep the credit system going. See, in the Crash of 2008, interest rates on US Treasuries went down. People wanted US Treasury securities. They didn't think that the US government was going down. But little Ben Bernanke decided he didn't have the legal authority to take over Lehman Brothers with all those low-rate Treasury bills.

Well, little Ben. Given what we now know about how the Deep State takes care of its own, I think that a bit of courage by you would have gone a long way to moderate the Crash and the Great Recession. Think how cool Obama, the first black president, would have looked as the economy surged in the 2010s! Think how many Latino homeowners wouldn't have been wiped out!

But you choked, Ben. Just like a true Swamp Creature.

OK. But what do we do now?

I think that the basic problem is that governments are used to betting the whole country -- with the National Debt -- on their projects. And why not? If Zimbabwe or Venezuela goes down, the ruler himself doesn't suffer. Not so long as there are Swiss bank accounts.

Let me make this clear. When the ruling class bets the country with debt, or when the ruling class forces college students to bet their futures with college debt, the ruling class usually doesn't suffer if the bet doesn't pan out. But when ordinary people get over their heads with debt then they certainly do suffer.

The fact is that debt is always a big bet on the future. It bets the borrower's future income on a nice house now, and if the borrower fails and the loan can't be fully liquidated then it is the lender that takes the fall. And the borrower is wiped out. But the point of debt financing is that it is supposed to be low risk. Sorry, Charlie. In my book 80 percent 30-year mortgages are not low risk. Not for the borrower; not for the lender. That's why we have all the federal guarantees and subsidies: to paper over the real risks.

We have securities for high risk propositions: they are called stocks, equities. They are really cool.

The problem is that the way that governments finance their wars is by betting the whole country on winning the war by flooding the economy with its debt securities and its paper money. Strictly speaking, wars should be financed with equity. But they are not. Because governments can afford to break the rules, particularly when the whole country is at stake. And maybe that is as it should be.

But should the government bet the country on "affordable housing?" Or on grandpa's Social Security pension?  Or grandma's Medicare health care? Or Suzie Snowflake's college education? I don't think so. And the reason is that government just cannot bear to pull the punchbowl away in the middle of the party; they just do not have a clue when it is time to adjust things and maybe pull back a bit. And anyway, politicians and bureaucrats and regulators don't have a clue. You might say that someone should have known in the 2000s that something was out of kilter with housing. No doubt. So who does the "someone" button-hole? President George W. Bush? But he was executing on a cunning plan to get Latino votes with affordable housing. Liberals that care about the poor and marginalized? But they are clueless about anything except the latest liberal political scam.

Yeah. My solution to housing crises and crashes and so on is to get the government out of it, and that the government only borrow for wars. But I do demand that the little Ben Bernanke of the next panic do his job and act as lender of last resort, and get with the program.

In the Crash of 2008 you may have heard about the $700 billion bailout. But did you know about the $16 trillion guarantee of money-market mutual funds? Check it out. Do you think that the feds could have managed the whole thing with a federal guarantee instead of the $700 billion TARP game? Who knows.

The main thing to understand about governments and ruling classes and Deep States and Swamps is that they are idiots. They really do not have a clue what they are doing. So the less money they get their hands on the better.

So why doesn't the rest of America agree with me? Are they dumb or something, or am I.

A Highly Satisfactory Tech Experience

Lady Marjorie and I are taking a trip to India in December, and the question arose: what should we do about cell service? Last time we went, in early 2009, we just went without. But we survived on wi-fi in the hotels. And I managed to update usgovernmentspending.com when the 2010 budget came out by finding a good wi-fi spot in the hotel in Pondicherry. I had loaded my little Dell laptop with all the stuff I needed do load up the budget data onto my provider's server.

But this is 2018, buster. So what about a SIM card for India? Last time I visited my daughter in France I got a temporary SIM card which worked OK, except for a dead period about a day in. Hey, said a friend of Marjorie's! Switch to Google's Project Fi, which allows calls and texts and data in most foreign countries. No extra charge -- most of the time!

Done deal, I said, and ordered up a new SIM card. It costs $20 a month for calls and text and $10 per GB with a max of $60 per month. That's great because I use very little data unless I'm out of town. Only problem is that I needed a new phone, because Google piggy-backs on whatever provider is available, and that needs a newer phone, Google said. So that was $200.

The conversion from my existing Ting service was nominal, except it took almost 48 hours to start receiving texts. Pretty soon I discovered that I would pay for exactly the data used, rather than for the next tranche as with my Ting account. Then I talked to a guy in the cell-phone industry, and he said that his Project Fi had worked in every foreign country except Oman. Oh man.

But the first real test was a trip to Sol-Duc Hot Springs resort in the Olympic National Park at the end of a 12 mile drive up from US 101. How well did Project Fi do in the all-American wilderness?

Last year when we drove up to Sol-Duc I lost my Ting signal (actually T-Mobile) before the turnoff to Sol-Duc, and Lady Marjorie lost Verizon at Mile 7 on the Sol-Duc road. No cell service -- and no wi-fi -- at Sol-Duc. Sorry pal!

But this time both Lady Marjorie's Verizon and my new Project Fi were good up till almost Mile 12. Still no cell service at the Sol-Duc resort itself. They say that Project Fi does not use Verizon, but it sure looked as though it was using Verizon on the Sol-Duc road, especially as both the Project Fi phone and the Verizon phone lost signal at exactly the same point.

That was Wednesday. Today, Thursday, we drove down the Sol-Duc road to a parking spot between Mile 7 and 8 and got signal and data. So I could post my blog post and Lady Marjorie could answer dozens of texts and emails. Then back up into the wilderness. What a world!

New Rules: The border of the civilized world is the border between signal and no signal. Beyond the boundary of cell service there be dragons!

The next test is to go up to Canada and see if Project Fi performs up there. If it does, I think that Lady Marjorie will convert to Project Fi too. Then we will be able to text each other from the front seat to the back seat on the road in India. For free. Providing we are not off-piste in some national park, surrounded by tigers.

Daniel Quinn's Rickety Path to the Future

In a way, Daniel Quinn of Beyond Civilization is just like me. He is trying to find a way out of the dreadful hierarchical culture in which we find ourselves. But he and I have rather different ideas about what is good and what is bad and what needs to change.

In the Good Old Days, he says, humans lived it tribes and were as happy as tribes -- or lions and tigers and bears. But then came the agricultural revolution and hierarchy, with Pharaohs at the top and serfs at the bottom. A great life for Pharaohs, but not so good for the folks that had to build the pyramids.

See, he writes, a tribe is like a circus, where everybody pitches in and does their bit without griping. Everybody instinctively understands that everybody has to pitch in to make the circus a success.

Except, old chum, that tribes and circuses come and go like the wind, and when they go they disappear into the void, known only to God. Whereas the Pharaoh and his food-built pyramids lasted for a thousand years.

The thing about the agricultural age is that it formalized hierarchy. Don't tell me that the old tribes didn't have hierarchy; of course they did, just as the troops of the great apes have hierarchy. It's just that it seems that all the cultures of the agricultural age had big-time hierarchy, with kings and armies and priests and then serfdom and slavery for the guys at the bottom.

Now Daniel Quinn claims that the lost Central American civilizations -- Maya, Toltec, and whatnot -- mysteriously ended and nobody knows why; on his view it seems that the people, the proles, just "walked away." And so can we.

Hey, Dan. I doubt it. Think Venezuela. The proles are perfectly happy to live in a vile hierarchical Bolivarian regime. And when the whole thing starts to fall apart they don't demand reform. They just sit there taking their bennies from the regime until the money runs out. Then, and only then, they start to walk away, as the Venezuelans are now doing.

Here's what I think really happens when things start to go wrong. The people rebel, whether it is the peasants with pitchforks of the early Second Millennium, Walt Tyler and all, or the Captain Swing agricultural laborers smashing the threshing machines, or the Luddites smashing machine looms, or the workers in the late 19th century getting shirty during capitalistic financial panics and depressions. But their rebellions are the useless actions of cornered rats. Now maybe this is just the slave behavior of the lower orders of the agricultural age carried over into the new world order of capitalism, but I doubt it. Otherwise we wouldn't talk about cornered rats.

But let us be clear. The point about agricultural empires is that there are a lot more people living in them than there used to be when everyone was just living in a tribal village. And this is a big thing.

So when an agricultural empire breaks up and grass starts growing up in the cracks, and people start walking away, what you don't see is the millions of people that are dying in the process as the agricultural empire resets to village. This is because of the millions that did not survive to tell their tale. All stories in this world are survivor stories. The rest are only known to archaeologists thousand of years later.

What Daniel Quinn wants us all to do is to break out of the hierarchical civilizational model and start inventing new tribes, where people come together spontaneously to form some enterprise, kinda like the Eastern Mountain News that he and his wife and a couple of other folks created out of nothing in Madrid, New Mexico, a while back. They just paid themselves out of the proceeds each week. No wages, no benefits. They just adjusted their demands on the organization to fit the proceeds.

Couldn't agree more, pal. Only your ignorance of the nature of the Great Enrichment of the last 200 years, and the price system, and the fact that your Beyond Civilization came out just before the Tech Startup Culture became a thing means that you really do not get what is trying to be born right here in the good old USA.

For instance, you don't have many nice things to say about today's billionaires, the Bill Gateses of the world. But do you know what I heard from a guy that heard it from a guy that spoke to Gates? He asked Bill Gates why he bothered to take Microsoft public. And Gates replied that he did it in order to share the company with the employees. And that is the implied contract in all tech startups. If we make it big then we go public and everybody gets a bit of the loot.

Quinn is also a bit dismissive of the wage culture, taking the Marxist view that wages dehumanize the workers, making them into mere drones. But the thing about wages is that they remove from the workers the day-to-day risks of a farm or of a business, which means that the owners and the bond-holders have to take a bigger risk. I suspect that most people really do not like to shoulder the day to day risks of life, and that this goes deeper than the learned subordination of the agricultural age. In fact, I believe that business owners are pretty cunning about this. They provide a lot more than just cash wages, such  as health insurance and pensions and vacations and sick leave and stuff. All that makes it hard for wage-earning employees to pick up and leave all that for another job.

In other words I'd say that most people just want to belong and stay where they belong. They do not get up and git unless they are well-and-truly forced to do.

Now I believe that our modern capitalistic era represents an amazing New Dawn for the human race, because through the nature of the price "system" and the marketplace, we folks today are constantly informed of the value of the service we provide our fellow humans. And if we try a new venture the price system pretty quickly tells us whether we have a good idea or not. This is radically different from the hierarchical static world of the agricultural age where most people were subordinate peasants and had to be because of their intrinsic vulnerability to pirates and plunderers.

In other words I would say that many of us humans are willing and eager to invent a new form of tribalism, of spontaneous belonging and enterprise if it weren't for stick-in-the-muds like Daniel Quinn that have worshipped too long at the altar of environmentalism, sustainability and divided the world into good people like him that want to save the world from "maximum harm" and bad people that just want to get on. Daniel Quinn has listened to too much of the bad news about violence and poverty and waste and poisoning of the environment to have read the counter-narrative of today's reduced violence of 5 violent deaths per 100,0000 in the capitalist world against 50 per 100,000 in the Medieval world and 500 per 100,000 in the hunter-gatherer world. Or that when societies get to about $10,000 per capita GDP they start cleaning up the environment. Etc.

But we humans are afflicted by the folks running a Great Reaction that are trying to hobble and prevent what Quinn says he is trying to encourage.

OK, great. Only, to my mind, Daniel Quinn has his feet planted too firmly in the camp of the Great Reaction to really help with the folks walking away from the crumbling wreck of what he calls the "Taker" culture.

For instance, our liberal friends make a big deal about the sins of slavery. Yeah, well, according to Max Weber and others slavery was a particular characteristic of the agricultural age. And it is curious that on the very cusp of the transition from the agricultural age slavery reaching its most perfect manifestation in the slave sugar plantation in which slaves cultivated the efficient C4-photoynthesis cane sugar plant and got fed with C4 corn. But in the new age slavery doesn't pay, according to Weber. We need more responsible workers now. So we made a big deal about the immorality of slavery, had a knockdown-drag-out Civil War about it and then had the early 20th century wars which we may hope were the last hurrah of slavery, including drafted soldiers (really slave soldiers).

So I dare say that the new models of enterprise in the Internet age will just throw the old ways in the garbage can of history.

But I don't know if Daniel Quinn will really like it. There is a lot in him that seems to revel in the old ways of Good and Bad, with Nietzsche's "the priests" teaching us to hate ourselves, as in non-sustainable practices that are Going To Kill the Planet!

And he seems especially immured in the creative culture that, in my view, is a poor substitute for the creation and rearing of children. His Ishmael novel is apparently about a kid that was real nice and sang and played the guitar, but never found a purpose to get his life going. So he committed suicide. Well, since the kid didn't find a girl and marry her and get some children going I can understand that. And I notice that Quinn mentions his wife Rennie but no children.

Here's my problem with this. I suspect the reason that humans got with the hierarchy and the serfdom and the slavery and the exploitation of the agricultural age is that it was better at getting kids on the ground and out of the nest that you could get from life in the hunter-gatherer tribe. Agriculture sustains a lot more humans on this planet than hunter-gathering. Energy-fed industry sustains a heck of a lot more humans than agriculture, although there is a risk, which liberals obsess over, that we may kill the planet in the process. But hey, liberals, maybe not!

Because however we argue about Pharaohs enslaving us and "maximum harm" and growing our own food instead of just picking it up as we wander through the forest, there is one and one only point to human life. Generation. The next generation. If we get the next generation on the ground and out of  the nest, then we are doing OK, at least for now. But anyone that doesn't put kids on the ground is not pulling their weight. And in my view anyone that doesn't put kids on the ground is liable to suffer from many of what the Freuds and the Jungs called "neuroses," whatever that meant. I guess we call it "mental health problems" now. Quinn thinks that the incidence of mental health problems is way up. I wonder why.

Right now I am reading the last part of Nietzsche's Also Spake Zarathustra in which he is supposed to show us what he really means by the higher man, or Superman, or Übermensch. That is what we are all working on, Nietzsche, Chantrill, and Quinn. But what, Zarathustra, is that higher man really going to be, presuming he won't be the Blond Beast of whom we've heard tell?

Stay tuned till next week.

Lighting the Way with a Dim Lamp

We are out in the Olympic National Park, Lady Marjorie and I, but on the road, at a bookstore in Port Townsend, I picked up the 20-year-old Beyond Civilization by Daniel Quinn, whose big success is Ishmael.

The Good Thing about Beyond Civilization is that Quinn understands that another "program" -- he is hesitant to say "government program" -- is not going to solve the world's problems.

Programs are sticks planted in the mud of a river to impede its flow. The sticks do impede the flow. A little. But they never stop the flow, and they never turn the river aside.

That's a very good metaphor, although many programs are not just stick, but bloody great boulders dumped right in the middle of a river, and cause flooding and scouring and all manner of harms that end up with millions of people dying.

Actually, I'd say that programs are the actions of politicians that need to appear to be "doing something." But really the only important thing for a politician is to reward his supporters. That is how he wins elections. Programs are just the means to the end of rewarding the supporters.

And Quinn has another good idea. The things that work in this world just work. We don't really know why, and we don't have to.

But on page 5 he falls into an great big Trap for Heffalumps. He observes that, in our culture, "the food is under lock and key... The food is all owned by someone, and if you want some, you will have to buy it."

Well, yes. But that is not a bug, it is a feature.

And do you know why, Daniel Quinn? It is because we moderns have made an astonishing discovery. In the old days, you see, the only way you could get food was by belonging to a tribe and partaking of the food hunted and gathered by that tribe. If you were a member of the tribe you could have your share of the food. If you were not a member there was only one way of getting food from the tribe: by killing the men of the tribe and seizing the food. Yes. The food was still owned, back in the good old days: it was owned by the tribe. And it was still under lock and key: defended by the the men, the army of the whole tribe, to the death. In the feudal age, of course, a peasant got to occupy land and eat the food on it by the grace of his liege lord. So the liege lord rented to key to the peasant, who had to farm the lord's demesne in order to grow and each the food on his peasant patch of land.

So food in human society has always been owned by someone. It's just that in the good old days there was no chance of buying any food owned by somebody else. You had to fight for it.

In other words, there was a very limited market, where humans could buy and sell exchanging one product of human enterprise for another and, most basic of all, exchanging their labor for money with which to buy food and other necessaries. The reason that food is under lock and key today is that we have a remarkable system -- that nobody really understands -- where the whole human race is exchanging everything imaginable through the "mechanism" of the price system. Everyone gets to own things, and you get access to the stuff that other people own by paying them for it.

Only the price system isn't a "system" and it isn't a "mechanism." In our modern age, the post-Newtonian age, we understand that "systems" and "mechanisms" really don't tell us what is going on. The closest we come to understanding the marketplace is through the notion of "emergent phenomenon" that has been developed by the Chaos theory guys.

OK. As usual, I am commenting on a book when I am only part way through. Quinn's big idea is that humans are tribal, so whatever we do to get Beyond Civilization it will be through a reinvention of the tribal notion. And I agree.

But I suspect that Quinn is going to have a real problem imagining that future when he doesn't understand markets and prices, and doesn't understand that the core of the market economy is not just "improve on something, then put it out there for people to improve on," but "improve on something that you think other people will want, and then put it out there for other people to decide if they will benefit." You find out how good your improvement is when people actually show up to buy your new improvement.

If you are right with your improvement then maybe you will be "rewarded with respect, fame, and wealth", as Quinn suggests, or maybe not. John D. Rockefeller, a man that helped flood the world with non-explosive lamp oil -- imagine that: lamp oil that didn't blow up in your face! -- and got to be astonishingly rich. But respect? Not if Daddy's girl Ida Tarbell had anything to do with it.

Quinn also suggests that nobody had any idea about whether the Industrial Revolution would work, and when it did, just we assumed that, of course, it would work.

It's perfectly obvious to us that the Industrial Revolution was bound to succeed.

That's not how I understand the history. For me it starts with this guy in Britain:

Wrote Carew Reynell in 1685: “Though we are a nation already pretty substantial... yet it is easy for us to be ten times richer.”

And then there was Adam Smith. His Wealth of Nations was really a work of prophecy, proposing a new theory of markets that the name of the game was not piling up gold, but merely exchange for mutual benefit.

And then came Marx, who said the whole thing was heading for disaster, as the ruthless competition of the market would squeeze out profits and "immiserate" the workers.

Then came the Fabians who said that the workers would be screwed unless the government came up with "programs."

Then came our current ruling class progressives that say that the only reason ordinary people have participated in the benefits of capitalism is because of the social benefits -- wage-and-hour laws, abolition of child labor, government pensions, government health care -- that noble activists demanded and noble progressives legislated for their benefit.

I'd say that we humans have been spending the whole of the last 200 years arguing about the Industrial Revolution and why it worked if it worked and what we need to do to contain it, or enable it or help it or hinder it.

But I will give Daniel Quinn this: The world works on "vision." Someone has an idea, and occasionally it actually works. When it works we all just scoop it up and use it. People don't have to know how it works or why it works. But they do know whether they want it and whether they want to use it.

Here's something that intrigues me. Quinn says that humans are tribal, and I can see that he is proposing that Beyond Civilization will be a new form of tribalism. I agree. In fact our present "civilization" is the latest in what I call "fake tribalisms" that humans with vision have invented since the dawn of agriculture. Today's fake tribes are things like churches, corporations, political parties, armies, securities exchanges, civic groups, "activist" groups, and so on.

But what will come next? That, of course, is the great question. Let's see what Quinn comes up with.

Is It 1942 Yet on the Culture War Front?

If you are President Obama the Trump presidency is a product of "resentment," as he said in his recent speech: "resentment and paranoia." He lamented, according to Allie Stuckey,

the destruction of the Republican Party and the ensuing demise of America because of the divisiveness and bigotry propagated by the president and those who support him.

But, if you look at it from another angle, the left has been running a secular-religious movement, especially successful during the Obama administration, that has resulted in huge changes in popular opinion, as measuring by the polls. Approval of gay marriage has gone from 31% in 2009 to 62% in 2017. Racism as a "big problem?" It was 26% in 2009. Now 58% percent of Americans agree.

Well, of course. Liberals in the media, in the schools, in the entertainment complex, in fashionable corporations are banging the drum every day for progressive issues like "sexuality, gender, race, immigration and welfare." And you better not express a contrary opinion or you could lose your job and get kicked off social media.

Actually, this is not so much a secular-religious movement as the lefty Secular Office of the Inquisition, enforcing its secular-religious orthodoxy everywhere. And when they show you the instruments of torture, why would you decide to experience the full experience the Inquisition has in mind rather than confess your heresy?

Now, in the face of a religious movement determined to enforce its vision of the anointed upon the deplorables, the question becomes: Is "resentment and paranoia" warranted? Or is it just pure bigotry? And how would you tell?

Let me explain. I have been reading Hitler's Mein Kampf on the internet, and the first couple of chapters explain the whole thing: Hitler's "resentment and paranoia" that he turned into a massive political movement that turned Europe upside down for twelve years.

As a young ethnic German man in Vienna before World War I Hitler experienced the situation of ethnic Germans in that multi-ethnic Hapsburg empire. They were a minority, and were being totally outmaneuvered in Vienna politics, because the non-Germans -- Czechs, Hungarians, Jews, etc. -- were obviously interested in diluting the influence of the ethnic Germans that had ruled the Austrian empire for centuries, and the Hapsburg rulers were trying to keep their whole rickety empire together. Hitler could look down the road and see that things were not going to be too good for ethnic Germans in the Austrian Empire, not when ethnic German votes were split between a nationalist party and a Catholic center party.

Solution? Put all the ethnic Germans together in a Greater Germany. Then no Germans would be a minority subject to the power plays of non-German ethnic groups.

Unfortunately Hitler also believed that this Greater Germany would need more land, because, as everybody knew, a nation couldn't survive on mere manufacturing and trading. A people needed to live on its own land growing its own food, etc.

Now, of course, in the event, the disaster of World War I detached the ethnic Germans of Austria into their own ethnic state. So that was all right, but too late, because Hitler had already made up his mind about what the German people needed. And the economic turmoil of the 1920s, the hyperinflation that was worse in Austria than in Germany, discredited the rulers and created space for troublemakers like Hitler.

In the event, Hitler got to execute on his plan for a Greater Germany and an even bigger Lebensraum for the Germans to get their food and natural resources, right up until 1942 when Germany overextended itself strategically on the plains of the Ukraine and the gates of Moscow.

Note that today Germany is an ethnic German state sitting in the middle of Europe as the primary manufacturing and trading nation in Europe and it doesn't matter that it doesn't have a hinterland for food-growing and resources extraction. So it didn't need Hitler at all to get where it is today.

But, the point is that when you have a multi-ethnic state then the obvious thing for politically ambitious people to do is to appeal to people on the basis of their religion and ethnic identity. Cue Lee Kwan Yew, first Prime Minister of Singapore, that in "multiracial societies... you vote in accordance with race and religion."

We know that our liberal friends think that, given another 30 years, America will be a majority-minority country and that white people will no longer dominate US politics.

There are, of course a number of assumptions that liberals are making.

Liberals are assuming that their coalition of the minorities will still obtain down the road. Will it? Will Asians and Latinos and blacks all still vote the same ticket? Perhaps all the non-black minorities expel the blacks from the minority coalition, because anti-black racism, and the Democratic Party becomes a rainbow coalition and the Republican Party a white-black party.

Or will East Asians join the Republican Party, as a party that respects East Asian family values and business success?

Perhaps Latinos and blacks will finally get up into the middle class and become deplorables and champion the traditional family and turn against lefty gender rainbow politics.

The risk, of course, is that liberals court the disaster that happened to Germany in 1945. And everything was going so well, as late as the spring of 1942!

When you listen to President Obama and the lefty progressives it all sounds as if we are just a couple of elections away from progressive triumph. Maybe they are right. Or maybe they are just as delusional as Adolf Hitler, who got a couple of things right, and a lot of other things completely wrong.

And anyway, to complain about the other side's "resentment and paranoia" is a little rich. Isn't the game of every politician to pump up the resentment and paranoia of his own partisans? Isn't that what Democrats did when they ran the Solid South? Isn't that what Democrats did when they championed the working class against the "malefactors of great wealth?" Isn't that what Democrats do when they appeal to the racial identity of African Americans and the gender identity of feminists and gays and transgenders, and the atheist identity of post-Christian educated liberals?

Look, all politics is about "us" and "them." Liberals do a politics of "us" as the educated elite and the marginalized races and genders and the "them" of deplorables.

President Trump is doing an "us" of America the nation, as in Make America Great Again. His "them" is unfair foreign trading nations, illegal immigrants. So his "us" is basically the whole of America except for the illegals.

Frankly, I'd say that Trump's idea of America is higher and nobler and more diverse and more inclusive than the liberal version. As Hillary Clinton so ably said, her division of America puts an irredeemable 25% of "them" beyond the Pale, because "you could put half of Trump’s supporters into what I call the basket of deplorables."

So what would Hillary Clinton say to Salena Zito's middle-aged woman in Grand Junction, Colorado, that has worked all her life at a candy factory, rising in 20 years from seasonal work as a contract worker to full-time work to supervisor to product manager?

What does Barack Obama have to say to her?

There is an old saying: live by the sword, die by the sword. I dare say it applies to a lot of other things, as in: "live by identity politics, die by identity politics."

Just saying.

Activism Culture Leads to "Spartacus Illusion"

Last week in the United States Senate we were privileged to experience a United States Senator, protected and privileged by the full power of the most powerful nation state the world has ever seen, likening himself to a 1st century BC Thracian slave, leader of a failed slave revolt: Spartacus.

Hey, How come a Jewish kid, Kirk Douglas, got to play Spartacus in the movie? Couldn't they find a Thracian to do the job?

This event excited me, because it puts the capstone on my "Activism Culture" concept.

My idea is that if you want to understand the left, and why every well-born good little girl from college wants to get into "activism," you need to understand the basic game that the left is playing.

We start with the warrant for government: It is to protect our people from the invaders. That is the warrant for any state. We must defend the borders from invaders that would come and steal our grain, kill our men, and ravish our women. If there is no such threat, then there is no warrant for government.

So if you are a well-born rich kid, with an urge to make a name for yourself, what do you do? What do you do when you live in a society that is basically at peace and where there is no threat from the Huns or  the Mongols? Moreover, in the modern state, we have separations of power, checks and balances, strict rules limiting the powers of the government that protect people from the power and pride of the ruling class. How is a rich kid to make a name for himself?

It was the genius of Marx and Engels to figure this out. You advocate for people outside the system that are not represented in the councils of government. Suppose you are a Captain Swing rioter, a landless agricultural laborer in Sussex in 1820 facing oblivion as you observe the farmers buying the new threshing machines that are going to put you out of a job and out of a livelihood. Do you go and talk to your local Member of Parliament? Hardly, because you don't have the vote. So your only option is the option of the cornered rat. You lash out, and smash the threshing machines, because the alternative is just to curl up and die.

In 1848, when Marx and Engels issued their Communist Manifesto, the workers did not have the vote. So the coolest thing that the son of a prominent lawyer and the son of a prominent textile manufacturer could do with their lives was to say: Yeah! We support the workers! Justice for the workers! And imagine themselves leading the workers through bloody revolution to the Happy Isles of emancipation and justice.

But as I keep saying, the rising bourgeoisie of the time, that was beginning to be the dominant political class, was not that interested in power. They were perfectly happy, with a bit of prodding, to give the workers the vote, and even submit to the workers' legislative agenda which would do nothing for good middle-class responsible citizens except raise their taxes.

Do you see the problem for the Marxes and the Engels? If the workers had got the vote, and thus their political views were getting a hearing, then there was no need for young rich-kid activists to lead them to revolution and death or glory at the barricades.

That's when we come to Leftism, Phase 2, courtesy of the rich kids of the Frankfurt School in the 1920s. They came up with the cool idea that activist rich kids should lead women and minorities, who were then without the vote and civil rights and were oppressed and exploited, to revolution and liberation and emancipation. Revolution Baby, was the cry of the lefty rich-kid followers of rich-kid Frankfurt School alum. Herbert Marcuse in the fabled Sixties.

But Oh No! The bourgeoisie led by noble liberals gave women the vote, and civil rights to non-whites, so just about everybody was not within the system, and could get the ear of politicians and the Man and didn't need to riot in the streets to get the attention of the ruling class. Now what?

Perfectly simple. Gays! It was monstrous that gays didn't have the right to marry just like heterosexual homophobes. But then gays got their gay marriage. So now what?

I know! The only people outside the system are now illegal immigrants and Muslims. So let's advocate for them and break down the barriers of hate and xenophobia and fill the streets with AntiFa and women's marches and cut the haters and the extremists off from social media!

Do you see the point? If there is no oppressed group outside the system there is no warrant for the clunking fist of government and no need for well-born rich-kid activists to mount the barricades for Justice!

And that would mean that well-born rich kids would have to get a job. Or do something much more difficult than the "activism" of spending other peoples money on politics: like doing the Peter Thiel thing of Zero to One. In other words the real hard thing to do is to find something that nobody has thought of and make it into a successful business, creating jobs for ordinary Joes and Janes and some fantastic new product for the masses.

But really! What well-born rich kid wants to do something that difficult? It's much easier -- and much more fun -- to get into politics and find something that needs the application of force, because you are fighting some existential peril. Something like climate change, refugee kids, or bike lanes, or plastic straws.

The point is that behind all these busy attempts to find something that justifies a political movement is the moral and ethical problem of being a well-born rich kid. How can you justify your lust for political power?

Even being a rich kid advocating for the underprivileged is a bit of a hokey thing. Charles Dickens could see it over a century ago with his Mrs. Jellyby who was all worked up about the plight of natives in Africa while neglecting her kids and the natives right there in London were shivering and going hungry.

So it is not surprising that the well-born rich kids reimagine themselves. They are not haughty Lady Bountifuls spreading charity among the poor and the homeless. Oh no. In reality they are fearless slaves challenging The Man: "I am Spartacus."

Only, of course, the well-born rich-kid activists are lying to themselves, lost in a Spartacus Illusion. Because They are The Man.

As any racist sexist homophobe deplorable can tell you.

Our Big Woman Problem. Again.

Over a century ago, the German sociologist Georg Simmel opined that women were going to change the world. Given the decline in the need for women to do domestic tasks by hand women would venture out into the public square, and inevitably they would change it.

Obviously, Simmel wrote, the public sphere, the world outside the home, in the short term would still be defined by men for men, but in the long term women would transform the public square to suit "a more feminine sensibility." 

Our modern default assumption is that this would be a "good thing," both for women and for men.

It is clearly coming to pass, for anyone that has eyes to see, and ears to hear, that in many ways the opposite is true, and I think that there is a simple reason for it.

The culture of women that has developed over the ages is supremely adapted for life in the domestic sphere, and maybe we needed the emergence of women into the public square to really understand this.

What is the supreme goal of the domestic sphere? Obviously, it is to keep everyone in the home alive, with whatever resources that can be obtained. So, even today with women running around in the public square, women are supremely interested in food safety. In keeping their children away from danger. In health care, health care, health care. Here is the foundation of the female Culture of Complaint. Whatever resources are provided by the man of the house to keep everyone alive, it is not enough, and so every woman is always complaining and needing more.

But what about the public square? Obviously, in the old days, it consisted of the men getting together to defend the tribal territory, unto the death. Notice the difference with the domestic sphere. In the domestic sphere, the woman must stay alive if she is to keep the others alive. But for men, they must keep the women and children alive by being ready to sacrifice their lives: men are expendable.

But now, in the modern public square, I think that the watchword is "get with the program, Jenkins." Whatever the market decrees, that is what you do. Whatever your employer needs, that is what you do. There are no sure things, no lifetime jobs, no guarantees. Just Do It. Thus the male Culture of Insult. If you are a man and expendable, and ever needing to get with the program, nothing is sacred, least of all oneself.

With these two ideas in mind, we can analyze the current scene. Here is a piece worrying about the coddling of kids: an interview with Jonathan Haidt. He comments, apropos trigger warnings and safe spaces:

Many people in children’s worlds want to be helpful, supportive, and empathetic. So if we try really hard to seek out the threats that young people face and protect them from those threats, aren’t we being nice? Aren’t we being helpful?

In other words, whatabout keeping everybody safe, as per the woman's goals in the private sphere? Well, it doesn't work, because humans come into the world as unfinished animals and they need to learn a lot before they are complete as adults:

It requires a lot of experience to finish itself. And that experience requires a lot of exposure to small challenges and small risks. It is essential that a young mammal take risks, get hurt, and learn about the effects of its behavior. 

So the more little children are protected from all the dangers of life the less they are prepared for the life after childhood. The reason we are facing this problem of an obsession with safety is that women coming out into the public square bring their culture of the private sphere of safety and staying alive and enforce it in the public square.

Then there is the sexual revolution. And of course we are seeing this week the parading of the Holy Grail, abortion, by the usual progressive suspects in the question of the nomination of Brett Kavanaugh to be an Associate Justice of the US Supreme Court. These activists don't seem to understand that abortion on demand licenses the unworthy man to say: just get rid of it.

My bigger point is that I don't think women do very well with the "get with the program" culture of the sexual revolution. Here's a tiny example from Suzanne Fields. College football player has what he thinks is consensual sex with a college co-ed, but.

The sweetheart described their sexual encounter to her roommate, remarking that he did not use protection against disease and pregnancy for a couple of seconds... [T]he roommate said that the couple of seconds was rape and reported it to campus authorities.

And the kid is suspended from school until the woman in question graduates.

Sorry Charlie, but women don't want "consensual sex," they want a relationship, and what we are seeing on campus and in the #MeToo movement is women nominally believe in the sexual revolution -- and remember legal abortion means that sex should have no consequences unless you want it to -- but in fact, from deep down inside them where their feelings live, they don't.

But because nearly all women are Good Little Girls they don't have the strategic chops to see around corners and realize that what they are being taught, that you can be a woman and compete in the public square just like a man, is straight-up rubbish.

Here's Christopher DeGroot weighing in on all this and quoting surveys that say that women are less happy than back in the 1970s. Golly! Who knew!

And the problem is that women are getting involved in a project to change the culture using the methods of the private sphere, manipulation and complaint, rather than the open outcry of the public square, insult and the open advertisement of goals, aims, and tendencies.

The problem, if you ask me, is that elite women need to be special, while the vast majority of women want to care for their families although they would like a part-time job to get them out of the house. Elite women are turning the culture upside-down so that they can be special. And they don't give a damn about ordinary women that have to live in the undertow of their elite fashionable specialness.

Of course, one of the reasons we got Trump is that the elite has been doing the same number on men for the last 50 years, and finally Trump came along and got deplorable men to believe that he "cared about people like them."

Maybe in another 50 years we will get Trump II when some candidate figures out how to speak to deplorable women and get them to believe that she "cares about people like them."