The Terminator Fails to Terminate

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In Michael Lewis's book Boomerang he spends time with Arnold Schwarzengger, basically failed governor of California.  AS was elected in a recall vote to drastically change the direction of California.  With high expectations he quickly found out how change was impossible.  Voters didn't want higher taxes yet they refused cuts in service.  To do either was political suicide. Unions were unwilling to give up ultra lucrative pay and pensions.  Other elected officials just gave people want they wanted and found way to hide the losses through Wall Street advised accounting gimmicks (like borrowing vast sums of money yet finding ways not to show it as debt).

 

A political moderate AS tried everything from grand compromiser to tough man Terminator.  None of it work.  He finally left office frustrated that very little got done.  The "Terminator" had been terminated by the political process.

 

This reflects the United States at large.  No willingness and ability to find common ground and fix problems.  And those funding the elections are living large so a system of inaction and dysfunctional suits them just fine.  After all if the county isn't picking up your trash just have your gardener call someone to come get it.  Library only open three times a week.  Likely your child's exclusive private school has a library that puts the public library to shame.  In other words an non working government has little impact on your life.  So who cares!

 

In the interim we are now approaching $21 trillion (that's 21,000,0000,000,000) with nothing to show for it other than non stop conflict in the Middle East.  Trump's tax and military plans will likely put the deficit on steroids, its highly unlikely there will be even a smidgen of economic activity to offset reduced tax revenues. And the rich will still have their loopholes so that won't change.

 

We'll also continue to up the ante on protecting and enforcing our economic and military hegemony.  The dollar will rule no matter how many people in the "name of peace" we will need to kill to do so.  Our society will see more violence as the "race" debate gets stoked when in fact its really about economics.  The Federal Reserve will keep the banking system intact with near zero interest rates and never ending money printing.  We'll continue to pay for our failed nation by monetizing the debt, or in other words print money to buy the bonds and pay the interest.  Just think how wonderful life would be if you could simply go to your home computer, hit a few key strokes and thousands appear in your checking account.  In the meantime, more and more Americans will become reliant on payday and title lenders.  Borrow it at 2% and lend it out at 500%, what a spread!  JP Morgan must be thinking "why didn't I think of that in 1905"?

 

Some tell me to run for office.  What office?  Dealing with slick, corrupt Florida politicians.  Do you think I really want to be in the same room with someone such as Debbie Wasserman Schultz or Marco Rubio and kiss their ass?  I'd rather kiss a dog's ass.  No, some things are not worth saving and our current system is one of them.

 

Still, as history has shown what comes after the revolution is sometimes worse.  We got lucky and got Washington, Adams and Jefferson, as flawed as they were.  Russia got Stalin, Germany Hitler.  Yes some good old fashion head chopping of politicians, Wall Street financiers, and MNC CEOs on the steps of the Mall might be a delightful afternoon but what comes next?

 

I'm not sure what the answer is.  I think very few others have a workable, realistic answer either.  You protest, the Republicans call you anti America, the Democrats nod in agreement and totally ignore you.  Reform of all types get talked about to death on cable news but yet never implemented.  The days of doing are done, now we just sit around and watch videos of someone we knew in 8th grade eat brunch at some local hangout.  We entertain ourselves and forget through mental masturbation.  Just like in 2008 when the house flippers were telling us how we could get rich by buying their $500 CD on house flipping, even as the real estate market was cratering.  The smart ones at the top were long gone trying to figure out how to get the best severance package possible when they got sacked.  Too bad the minions at the bottom never got such treatment.

 

Somehow one day it will get fixed, likely in a way none of us can imagined.  That's generally the way history has unfolded.  So maybe in the end get a cold beer and a snack and watch the "greatest show on Earth", people trying to correct an uncorrectable system.

Comments

Katharine Otto Added Nov 16, 2017 - 11:17am
George,
You forgot to mention the huge cost of government employees, at every level of the system, as well as retired government employees and other retirees.  If you note the bankruptcies and near bankruptcies here and abroad are largely because of unfunded pensions promised to public service workers.  
 
A partial answer might be to quit promising so much.  I've long favored making Social Security and Medicare taxes and investment optional.  Of course, I'm totally opposed to ObamaCare and any mandatory insurance.  Health care that must be mandated must not be very good (even if glitzed up with bells and whistles), something I've discovered from both inside and outside the system.
 
You can't fire people from government jobs, and the bureaucracy is totally out of proportion to the public service.  Also, the "benefits" plans are disproportionate to anything in the private sector.  The government competes with the private sector for good workers.
 
When you have something like 51 percent of the population working for the government(s), you have a built-in lobby group that will resist any effort to restore financial sanity.
George N Romey Added Nov 16, 2017 - 2:35pm
Katharine the government’s answer is and will be monetizing through the Federal Reserve. But won’t that eventually destroy our currency?
 
We at the minimum need to end the MIC.
Dave Volek Added Nov 16, 2017 - 2:42pm
Thanks George
Your article is another reason to plug my book Tiered Democratic Governance. If America wants to get out of its gridlock, it needs a news system of governance: no political parties, no noisy election campaigns of shallow visions and promises. And the TDG will find  ordinary people with good character and capacity and put them into positions of governance. 
rycK the JFK Democrat Added Nov 16, 2017 - 3:08pm
"With high expectations he quickly found out how change was impossible.  "
 
CA is a dark blue state that attained compleat control of politics by importing poverty to bring essential drugs and vote for more taxes and welfare and for any thing the Dems wanted. 
 
I am a 5th gen CA 49-er in exile because of this mess. 
 
So, Boycott and Girlcott CA, MA, IL,NJ  and other leftist tax mongers. Let them go down. 
rycK the JFK Democrat Added Nov 16, 2017 - 3:09pm
Dave Volek
 
And the TDG will find  ordinary people with good character and capacity and put them into positions of governance. 
 
A worth goal. 
Dino Manalis Added Nov 16, 2017 - 3:24pm
That's why we always need pro-growth policies; fiscal restraint; turn deficits into surpluses and pay down the debt; and peace and stability at home and abroad.
rycK the JFK Democrat Added Nov 16, 2017 - 4:09pm
Dino
 
These are all preferred outcomes and goals, but all of them argue against the left-wing notions of society. They do not want a great economy as that removes dependent persons from the government dole thus probably losing their votes. They do not want low taxes as this gives power to their dire enemies: the capitalists. 
 
I agree here 100%  with your points, but the left will go berserk and start a revolution before they submit to a great economy. 
Nasty Added Nov 16, 2017 - 6:48pm
San Francisco/Silicon Valley, has Billions to spend on left propaganda.

Hollywood has the mind control media in hand, and the expertise to make fantasy; reality.
 
The brainwashed California voter just keeps doing their bidding.
 
CA once was the home of Ronald Reagan, Richard Nixon and Arnold Schwarzenegger, but like:  rycK the JFK Democrat, people who want to make CA a great place again, have been driven out by taxes and regulations.
   Arnold didn't fail to terminate, he was GOOGLED.   
California is the Granola State, because it now is full of: Fruits, Nuts and Flakes.
Flying Junior Added Nov 17, 2017 - 3:29am
Schwarzeneggar's strongest promise was to repeal the car tax.  He termed it, "Outrageous!"  He came through and the very same year he took office we all saw lower car registrations.  But this year the car tax was re-instituted.  Arnold became so desperate to balance the budget that he began to advocate more Indian casinos and licensing slot machines to generate tax revenue.
 
Brown was so beloved when he was reelected we actually voted ourselves a sales tax hike.  His Water Action Plan of 2014  provided a much-needed master plan for water conservation and wetland protection.  But most of it was never enacted.  More recently I loved his idea of a tunnel to bring water south from Northern California, but like so many other ideas it turned out to be expensive and impractical.  Yet the least practical idea of all, the high-speed rail continues to divert resources although it will likely never connect San Francisco and San Diego.
 
But locally, things aren't so bad.  Libraries have new expanded hours since Mayor Jerry Sanders.  Privatization of road crews and water maintenance has proven to be extremely efficient.  Burtech crews in San Diego were tearing up cast iron water mains and replacing them with heavy duty PVC water mains at a rate of something like two miles every two weeks.  Our current mayor, Kevin Faulconer has taken on the issue of homelessness with a planned opening of three large industrial tents to provide shelter for those out on the streets set to open  before the new year.
Ian Thorpe Added Nov 17, 2017 - 1:09pm
George, I've argued for localism - very similar to Dave V's suggestion of tiered government. A lot of the problems stem from the fact that the vast growth in populations over the past 200 years has made government in most nation states and even Federal States such as Calif. remote from people's lives.

This separation of government and governed facilitates bureaucracy and corruption. You've probably noticed, as I have, that the most sucessful corporations now are those that supply government. Where mining, making or growing stuff were once the mainstays of national economies, now the torch has passed to businesses that service the needs of government. And if sufficient funds can be raised to 'fed the monster' they economic cycle becomes a perpetual motion engine.

We must find a way to throw a spanner in the works. One approach would be for everybody to reduce consumption, which apart from helping the planet which ought to get greens and liberals on board, although they are not noted for logical thinking,) would starve governments of revenue and force them to cut over-generous budgets (military spending and such) and cut back contracted out tasks.
George N Romey Added Nov 17, 2017 - 1:13pm
Ian something the MSM won't touch but our government is already monetizing the debt. The Fed has become the biggest purchaser of treasuries, using printed money to do so.  Politicians are doing what they've been doing now for several decades, take the easy way out and punt. Only a collapse of the currency or a jubilee would halt our addiction to debt.
Bill Kamps Added Nov 17, 2017 - 1:14pm
George, you are correct.  The voters got what they wanted, more government services, and not much higher taxes.  This of course leads to higher  debt. Politicians are not irresponsible they are simply giving voters what they want.  AS's experience shows what happens when you try to do something the voters dont want.
 
Why will the people revolt as long as taxes dont go much higher?  Trump is promises somewhat lower taxes, so what is the problem?  Austerity doesnt work. 
 
Franklin saw this coming, when he said that once the voters figure out they can vote themselves money, the Republic is in trouble.  We are there.
George N Romey Added Nov 17, 2017 - 1:20pm
To most Americans the debt is just an abstract idea.  We have nearing $21 trillion in debt and people say "well we haven't hit 100% of GDP" (although we are getting close.)  Not to long ago a term "trillion" was rarely used.  Today its talked about as though its a $20 bill.
 
There is no doubt that in my mind if Trump gets his way he will send in helicopter cash.  When does our currency fail?  Well no one is to sure.
Bill Kamps Added Nov 17, 2017 - 1:35pm
True, the average person doesnt care about the debt level, they care about their tax level, and their government  services.  They vote for people who will keep the  taxes low, and increase services.  Simple.
Dave Volek Added Nov 17, 2017 - 2:30pm
Bill says: [The People] vote for people who will keep the  taxes low, and increase services.  Simple.
 
In the TDG, the citizens elect their local elected representatives. But these representatives would not be in any authority for major social programs or government debt.
 
These decisions belong to the higher tiers. But the citizens don't elect the higher tier. So the higher is not beholden to citizen whims. This tier has the freedom to discuss the pros and cons of any social program. The social program will not be seen as a favor to be paid off.
 
 
Ian Thorpe Added Nov 19, 2017 - 11:28am
George, I knew about the Quantitative Easing scam and how it works to force taxpayers to bail out government by destroying the value of savings and pensions. What a lot of people haven't understood is that the ridiculously low interest base rates in force since 2008 are part of a huge scam. We can't borrow money at half a percent of course, that is the rate at which the government lends to banks. Now the coupon value of UK treasury bonds has been 3.5% (3% in the USA I think) throughout that period of low interest, so banks borrow government money at 0.5% and use it to buy treasuries, thus lending it back to government at 3.5%. Nice work if you can get it.
People who have not been involved in business and finance will probably say this looks to be a very tight margin, but if we remind them that the UK treasury issues about £6billion worth of bonds per month (the US is about ten times that) and ask them to calculate half a percent of £1 billion, they will see that is not a bad day's pay. 
Dave Volek Added Nov 20, 2017 - 8:31pm
Ian
 
I think you have explained "mystery economics" to a point where I might understand it. Could you write a full article on this topic? 
 
Strange this is that when I try to explain "factoring" to people (and some of them well educated) they just can't fathom that their $1000 saving account is parlayed into loans of $10,000 or more. 
Jeff Jackson Added Nov 25, 2017 - 6:14pm
George, I remember when JFK said that he only wanted "the best and the brightest" in his cabinet. Then, of course, there was Macnamara who screwed Vietnam into a major loss. At some point someone, maybe a lot of people, will have to compromise. The middle class already has.

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