VOODOO ECONOMICS: The Deep State’s Catch-22 – By Charles Hugh Smith

Source – oftwominds.com

…The financial elites of the Deep State (and of the nation-state that the Deep State rules) generate wealth inequality and thus instability by their very existence, i.e. the very concentration of wealth and power that defines the elite. So the only way to insure stability is to dissipate the concentrated wealth and power of the financial Deep State. This is the Deep State’s Catch-22″:

(The Deep State’s Catch-22 – By Charles Hugh Smith)

What happens if the Deep State pursues the usual pathological path of increasing repression? The system it feeds on decays and collapses.

Catch-22 (from the 1961 novel set in World War II Catch-22) has several shades of meaning (bureaucratic absurdity, for example), but at heart it is a self-referential paradox: you must be insane to be excused from flying your mission, but requesting to be excused by reason of insanity proves you’re sane.

The Deep State in virtually every major nation-state is facing a form of Catch-22: the Deep State needs the nation-state to feed on and support its power, and the nation-state requires stability above all else to survive the vagaries of history.

The only possible output of extreme wealth inequality is social and economic instability.

The financial elites of the Deep State (and of the nation-state that the Deep State rules) generate wealth inequality and thus instability by their very existence, i.e. the very concentration of wealth and power that defines the elite.

So the only way to insure stability is to dissipate the concentrated wealth and power of the financial Deep State. This is the Deep State’s Catch-22.

What happens when extremes of wealth/power inequality have been reached? Depressions, revolutions, wars and the dissolution of empires. Extremes of wealth/power inequality generate political, social and economic instability which then destabilize the regime.

Ironically, elites try to solve this dilemma by becoming more autocratic and repressing whatever factions they see as the source of instability.

The irony is they themselves are the source of instability. The crowds of enraged citizens are merely manifestations of an unstable, brittle system that is cracking under the strains of extreme wealth/power inequality.

Can anyone not in Wall Street, the corporate media, Washington D.C., K Street or the Fed look at this chart and not see profound political disunity on the horizon?

Many consider it “impossible” that Wall Street could possibly lose its political grip on the nation’s throat, but I have suggested that Wall Street has over-reached, and is now teetering at the top of the S-Curve, i.e. it has reached Peak Wall Street. Consider what the extremes of Wall Street/Federal Reserve predation, parasitism, avarice and power have done to the nation, and then ask if other factions within the Deep State are blind to the destructive consequences.

Is the Deep State Fracturing into Disunity? (March 14, 2014)

What happens if the Deep State pursues the usual pathological path of increasing repression? The system it feeds on decays and collapses. I discussed this in Surplus Repression and the Self-Defeating Deep State (May 26, 2015)

We can anticipate the Deep State fracturing over the illusory efficacy of repression: those who believe there is no upper limit on the effectiveness of repression, and those who understand that at some point, unlimited policing and financial repression will unleash a destabilizing tsunami that will threaten the integrity of the Empire and the Deep State itself.

Here is an excerpt from an insightful interview, The American Deep State: An Interview with Peter Dale Scott

Peter Phillips: We’re really happy to have you here. I’ve just finished reading your book, The American Deep State: Wall Street, Big Oil, and the Attack on U.S. Democracy In your new book you talk about the egalitarian mindset culture of America. We believe in the Constitution, the Bill of Rights, open government, transparency. And then you say also that there’s a dark side, or a deep side inside America that’s repressive, that is looking to be able to detain people without warrants, warrantless wire tapping and all of that – there’s a repressive side. Can you tell us a little bit more about how you frame this understanding of this culture of repression?

Peter Dale Scott: Actually, I think there’s always been a deep state in America and there have been times when it has been very repressive. We’re in a period of, you might say, surplus repression – repression that doesn’t serve anyone’s interests, not even the interests of the ruling class. (emphasis by CHS)

Preserving ever-expanding wealth/power inequality via ever-expanding repression is not a successful strategy. As the Internet has speeded up commerce and the distribution of ideas and information, the utility of repression as a way of preserving a crumbling status quo has decayed. A repressive regime that lasted seventy years in the 20th century might last seven years in the 21st century once the rising scarcities of paid work, energy, food and social mobility start drawing blood.

Debt has been the temporary savior of Deep States everywhere. Borrowing money from future earnings and future taxpayers has worked for seven long years, but it’s unlikely to last another seven.

You can borrow money for a time to fund super-welfare for all (elites and debt-serfs alike) but you can’t make energy or food cheap again or regenerate social mobility or dissipate rising wealth/power inequality.
My new book is #5 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book’s website.
Our status quo–the pyramid of wealth and power dominated by the few at the top–has failed and is beyond reform.

This failure is not rooted in superficial issues such as politics or governmental regulations; the failure is structural.

The very foundation of the status quo has rotted away, and brushing on another coat of reformist paint will not save our societal house from collapse.

Yet those who benefit from our status quo naturally deny it has failed, for the reason that it has yet to fail them personally—either pretending to not understand that all unsustainable systems eventually collapse, or hoping to postpone it.

Our status quo is not only failing to solve humanity’s six core problems–it has become the problem.

Since this failure is now inevitable, something is coming to replace it. We must each understand why our status quo has failed, and why the usual menu of reforms can’t stop this failure, so we can prepare ourselves for the radical transformations ahead

http://www.oftwominds.com/blog.html

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