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  • An Interesting “Collapse” Hypothetical

    Posted by Zenpundit on July 29th, 2010 (All posts by )

    Dr. Paul Craig Roberts, the famous Reagan administration economist and now an embittered and cranky paleoconservative social critic, penned a short but intriguing American “collapse” scenario set in the near future. Some of what Roberts writes fits neatly with the thesis in Joseph Tainter’s The Collapse of Complex Societies:

    The Year America Dissolved

    ….As society broke down, the police became warlords. The state police broke apart, and the officers were subsumed into the local forces of their communities. The newly formed tribes expanded to encompass the relatives and friends of the police.
     
    The dollar had collapsed as world reserve currency in 2012 when the worsening economic depression made it clear to Washington’s creditors that the federal budget deficit was too large to be financed except by the printing of money. With the dollar’s demise, import prices skyrocketed. As Americans were unable to afford foreign-made goods, the transnational corporations that were producing offshore for US markets were bankrupted, further eroding the government’s revenue base.
     

     
    The government was forced to print money in order to pay its bills, causing domestic prices to rise rapidly. Faced with hyperinflation, Washington took recourse in terminating Social Security and Medicare and followed up by confiscating the remnants of private pensions. This provided a one-year respite, but with no more resources to confiscate, money creation and hyperinflation resumed.
     
    Organized food deliveries broke down when the government fought hyperinflation with fixed prices and the mandate that all purchases and sales had to be in US paper currency. Unwilling to trade appreciating goods for depreciating paper, goods disappeared from stores.

    Several interesting things here. First, the demagogic front men who are currently engaging in op-ed tirades against public pensions in order to loot them to ostensibly plug state budget deficits will, if successful, use that precedent to go after private pensions, IRAs, 401(k), mutual funds, Social Security, Medicare, Home mortgage interest deduction – any remaining big pot of money in the hands of the middle-class has a big target on it. Secondly, food shortages historically were the spark that set off the French and Russian Revolutions.

    When hubris sent America in pursuit of overseas empire, the venture coincided with the offshoring of American manufacturing, industrial, and professional service jobs and the corresponding erosion of the government’s tax base, with the advent of massive budget and trade deficits, with the erosion of the fiat paper currency’s value, and with America’s dependence on foreign creditors and puppet rulers.
     
    The Roman Empire lasted for centuries. The American one collapsed overnight.
     
    Rome’s corruption became the strength of her enemies, and the Western Empire was overrun.
     
    America’s collapse occurred when government ceased to represent the people and became the instrument of a private oligarchy. Decisions were made in behalf of short-term profits for the few at the expense of unmanageable liabilities for the many.
     
    Overwhelmed by liabilities, the government collapsed.

    Connectivity, contra Roberts, is good. Corruption, on the other hand, is not. Free markets are generally efficient, so long as you do not expect them to automatically create public goods of a certain scale or be perfectly self-regulating. They require a scrupulously impartial rule of law in order to not become corrupted by abusive players seeking rents. Unfortunately, a scrupulously impartial rule of law is incompatible with technocracy, where expert administrators are granted arbitrary discretion without democratic accountability, the prevailing ethos in the EU supranational bureaucracy, to cite a real world example. The late, unlamented, Soviet nomenklatura would be another, more sinister, historical one.

    The primary problem with the American political economy is that in the last 10-15 years, elite, moderately liberal technocrats have made common cause with the elite, moderately conservative rentiers of the financial and corporate world to form an incipient oligarchy. One sees their fellow Americans paternalistically as children. The other sees us as sheep to be sheared. It’s a common enough ground on which to unite and it is the reason you see a very liberal Democratic Obama administration and a Pelosi-Reid Congressional leadership counterintuitively putting corporate regulation in impenetrable shadows not seen since before the Stock Market Crash of 1929 as if they were the minions of Jay Gould and J.P. Morgan.

    Don’t expect mainstream Republicans in Congress to die on any hills fighting for the free market either – they aspire to be the party of no-bid contracts to the Democratic party of government by clout.

    Alderman Paddy Bauler would be proud.

    Cross-posted at zenpundit.com

     

    30 Responses to “An Interesting “Collapse” Hypothetical”

    1. david foster Says:

      “With the dollar’s demise, import prices skyrocketed. As Americans were unable to afford foreign-made goods, the transnational corporations that were producing offshore for US markets were bankrupted, further eroding the government’s revenue base”…here, of course, Roberts is ignoring feedback, incentives, and human ingenuity. If the dollar fall sufficiently for import prices to “skyrocket”, domestic manufacturing becomes that much more attractive. Not all kinds of manufacturing can be started or expanded rapidly, of course, but many can. I bet that with a 40% fall in the dollar, for example, assembly of iPads and iPhones would move to the U.S. with amazing speed.

    2. Robert Schwartz Says:

      “the demagogic front men who are currently engaging in op-ed tirades against public pensions in order to loot them to ostensibly plug state budget deficits”

      This is a complete misrepresentation of the state pension problem. The problem is that very rich promises have been made to state workers, and the states have not deposited a like amount of money in their pension funds. The promises cannot be paid unless taxes go up, or the promises are written down. Take your pick. I vote for the write down. The deposited funds will act as a floor on the write downs. No one has proposed taking the deposited funds.

      “will, if successful, use that precedent to go after private pensions, IRAs, 401(k), mutual funds, Social Security, Medicare, Home mortgage interest deduction – any remaining big pot of money in the hands of the middle-class has a big target on it.”

      The situation here is different. “Social Security, Medicare, Home mortgage interest deduction” These are government promises that are unfunded and unsecured. They can’t be paid unless taxes go up or they are written down. There are no deposited funds to act as a floor on the write downs.

      “IRAs, 401(k), mutual funds” These are private funds. The Argentine Government under Evita Kirchner has already confiscated their citizens pension funds. The US government will be tempted to follow suit. I told my son to deposit his 401k money into a conventional plan not a Roth plan. The conventional plan provides an upfront tax deduction while the Roth does not. The Roth is supposed to provide untaxed returns when he retires (he is 23), and there is not a prayer of that.

      “Secondly, food shortages historically were the spark that set off the French and Russian Revolutions.”

      The ideology of “revolutions” as a special class of historical events has proven to be more of a political shibboleth than an analytical tool. The French and Russian Revolutions were the collapse of their respective autocratic monarchies.

      The Russian collapse was simple. Russia made the mistake of getting involved in what turned into the Great War (a/k/a WWI), the Tsarist regime collapsed, and a gang of thugs with a fancy patter, the Communists, took over.

      France was more complex, but the Bourbon monarchy ran out of money largely due to its inability to reform France’s system of taxation. That system was one where France was regionalized, and excises were imposed whenever goods crossed a regional boundary. This acted to depress trade and production. Of course people were hungry. They were always hungry. The system was set up to take the surplus from the peasants and give it to the church and the nobility.

      The sequella of the Bourbon collapse were the attempt to create a republican government, the seizure of the levers of power by the mobs of Paris, a civil war between Paris and the provinces, the decent into chaos, and a military dictatorship under Napoleon. What the Revolution did not do, or deflect, were to very long term trends — The centralization of France in Paris, and the creation of centralized bureaucracy in Paris that rules the country, willy-nilly.

    3. Michael Kennedy Says:

      A lot of people I knew were preparing for just such a collapse in the 1970s. I think it is odd that nobody seems to be preparing now. Maybe I am just out of the loop. I had a Mormon office manager and a bunch of us got her to give us a seminar about Mormon self reliance. We all had stores of dry food and unmilled grain. When gasoline got so expensive and difficult with rationing in the 70s, I bought all diesel cars and put a 550 gallon diesel tank in my side yard. I had an electric pump to fill the cars. I wonder if the people who now own that house have ever found the tank? Of course, it was illegal but diesel is safe, unlike gasoline.

      I knew doctors who put their pension plans into bags of silver dimes and quarters, plus, of course, Swiss Francs and gold. At one time in the 70s, the Swiss were charging negative interest on deposits, there were so many Americans clamoring to send their money out of the country. The local paper in Orange County had a story about this crazy old woman who was buying Rolls Royce cars. She lived in Vista, a town in north San Diego County. I think she bought about ten of them for an average of $25,000 each and put them up on blocks in storage. What a silly old lady !

      Ten years later, she sold them for an average of $125,000 each.

      Carter wasn’t as hostile as Obama is, just inept. I don’t think anyone feared him like they fear Obama.

    4. J. Scott Says:

      Mr. Foster, I believe you have touched on the intangible that Mr. Robert’s may underestimate. I saw the power of those “communist” black-market types in the early-90’s former Soviet Union—if those folks could figure out how to side-step the government and produce/make money (read: produce stuff of value), imagine how powerful folks who have experience could be. The urban areas would be dicey, but most of America would persist.

      Mr. Kennedy, Carter was inept, and people have good reason to fear Obama and his Chicago-type politicos. Ann Coulter should revise and extend her earlier observation that the Clintons are a form of pestilence on the body politic and expand to include Obama/Reid/Pelosi—for this trio’s unbridle arrogance and excess may yet hobble our great Republic. Stay tuned.

    5. Zenpundit Says:

      Hi Robert,

      I am not “misrepresenting the pension system”; you are misunderstanding my point.

      Formerly, public vs. private was a useful way to discuss differences in objectives in political economy when the conflict was strongly ideological and based on Left vs. Right. Except today that crucial distinction is not viewed as being of any particular importance to the oligarchical elite in getting control of the maximum flow of societal wealth. You might have noted the liberals bailing out their former archenemies -Wall St., Big Banks, major corporations, while Republicans provided the key votes for passage of the finance bill that grants vast, unspecified, regulatory powers to the Feds and a cash spigot of tax money in the form of guarantees to Wall St.

      A better way to read the tea leaves, in my view, is to look for the remaining large pots of money, privately held or in the form of entitlement expenditures or tax deductions dedicated to the middle-class that the oligarchy would prefer to control, tax or confiscate. That is the common denominator among the set of examples that matter. That public pensions have been abused or misused is true (incidentally, throwing in IOU’s is a form of covert looting- a double-dipping on expenditure by politicians). However, arguably, private pensions are also liable to similar abuse where there are not sufficient or secure funds to meet promised payouts and that will likely be a rationale for government takeover with the precedent of public pension “reform” behind it. After that expect “equity” and “fairness” arguments to be raised to go after things like 401(k)s and other vehicles of savings as taxes go up and programs designated for the middle-class are reduced or eliminated.

      Oligarchies collect rents by holding down the standard of living of the mass of the productive portion of the population to as a low a level as will be tolerated – it happened in Stalinist Russia, in Meiji and postwar Japan, during Late Antiquity, in Latin America for it’s entire history and many other places. I believe they are trying to do so here as well and relying on plying old Left-Right polemics is the dazzle while they pick people’s pockets and erode their political rights with a steady corrosion of regulations, barriers to entry, fees, fines, taxes and obligations.

    6. TMLutas Says:

      David Foster – You identified exactly what was bothering me about this essay, the assumption that as american labor became cheap, international corporations would source production in the US. In fact, it’s happening right now as international outsourcing contract failures often lead to business coming right back to the US but in different states with good work ethics and lower labor rates. So a car design shop might go from Michigan to India but if the outsource project fails, the work comes back to the US, perhaps in Kansas or Georgia.

      At least a third of outsourcing projects fail.

      Another unlikely event is US troops being abandoned in the field. In a collapse situation, every person in uniform is going to be needed to keep order and you can bet that the political class will not leave them in places where they are not protecting the political class.

      We have bunkered enough fuel to get all our boys home and a significant portion of our shipping is nuclear. We might abandon equipment, but definitely not men.

      A third unlikely event is the political class’ continued physical survival if they foul things up this badly. The arming of the populace should strike fear in the hearts of anybody actually contemplating going down this road, not because the regime will be overthrown, but that they personally would be targeted by home-brewed UCAV strikes, IEDs, and simple hello congressman *blam* gunfire at public events. There’s something fishy going on but I don’t think this is it because these people’s sense of self-preservation is too good to not see the trouble they would reap if they actually did it.

    7. Lexington Green Says:

      “Oligarchies collect rents by holding down the standard of living of the mass of the productive portion of the population to as a low a level as will be tolerated …”

      How do fight an oligarchy? What is the historical record on that?

    8. Isegoria Says:

      You fight an oligarchy with a monarchy and replace pie-shrinking corruption with pie-growing law and order.

    9. Joseph Somsel Says:

      Concerning Mr Foster’s comment in #1 as mentioned by TMLutas:

      The hidden assumption in the scenario is a collapse of world trade. Certainly the US dollar becoming near worthless would encourage a shift of production into the US but one would expect other actors to be more merchantilist than free traders.

      Mr. Green’s question about fighting oligarchy is interesting. I suspect that most oligarchies fall due to outside competition than by internal dissention. An oligarchy creates inefficiencies and while the overall economic performance is down, the oligarchy’s income can still be greater in absolute terms. That economic inefficiency leaves a society weaker and vulnerable to stronger nations.

      I’ve long predicted a major inflationary period. That is one certain way to reduce in real value China’s treasure of dollars.

      Unfortunately, I’ve mentioned this to my wife who has run up HUGE credit card balances. The good news is that at a 29.99% inflation, I’ll be paying effective zero interest!

    10. zenpundit Says:

      Hi Lex,
      .
      I think oligarchies are terminated in the following ways:

      a. A coup by an aspiring dictator – ex. the tyrants of classical Greece, Napoleon unseating the Directory.

      b. A violent revolution by the people or a civil war waged by a competing elite faction – the French and Russian Revolutions, the Union’s Northern industrial-merchant elite crushing the Southern planter oligarchy of the Confederacy.

      c. Foreign invasion and conquest – US invasion of Iraq, innumerable colonial wars.

      d. Peaceful subversion of the oligarchy over a period of time by the middle-class – Great Britain in the 18th- early 20th century, Rome during the very late Republic and early Empire when the “new men” gradually displaced the dying out patricians, the US from about 1920 – 1970 when many legal and informal barriers to social mobility were removed, old fortunes lost in the Crash/Depression, property ownership and education were subsidized and tremendous GDP expansion occurred for reasons of policy and circumstance

      e. Peaceful revolution where a tired and morally bankrupt oligarchy shrinks from bloody mass repression and simply quits – Russia when Gorbachev transferred power to Yeltsin, the Phillipines.

      I think the good news is that the new oligarchy here has not put down roots yet. It is still tentative, weak, unstable, leaderless and not yet a full generation old. Nor is everyone in it fully committed to wrecking all of our constitutional machinery and societal stability in a mad quest for maximum self- and class career aggrandizement. Many of them want to do good even as they ” get a little” for themselves ( this used to be called “honest graft” ). Nor do they have the stomach to impose a real authoritarian state ( it is dubious that the US military would obey such orders anyway) which is why they make many small, secretive, moves trying to hide what they are doing in a mass of byzantine governmental complexity ( one objective to combat this should be “simplification”, which will also lower spending by reducing waste).

      That said, there are some real bastards present – like the billionaire hedge fund manager pedophile http://www.thedailybeast.com/blogs-and-stories/2010-07-20/jeffrey-epstein-billionaire-pedophile-goes-free/ or the UCLA law prof who wanted the FCC to yank the licenses of FOX stations http://volokh.com/2010/07/21/journolist-members-suggest-that-fox-news-be-shut-down/. These are, we should keep in mind, extreme examples. When an oligarchy matures and becomes entrenched with generations growing up accustomed to ruling without following any rules, these attitudes become the norm.

    11. dearieme Says:

      First you need an answer to this point: “the current multinational crisis isn’t a crisis of capitalism but a crisis of democracy. Everyone seems to want more democracy but that’s what’s got us into this mess. Over the last 100 years, the public has realised (as the old Scots economist had it) that it can vote itself largesse from the public purse.”

    12. sol vason Says:

      Compared to China or Europe or India the United States is sparsely populated. If the US Federal Government were to collapse, there are several major nuclear powers with big armies that will gladly restore law and order in the US in order to control our farm land an our industries. They will settle their excess population here and they might even let us live on reservations.

      Chinese, Mongul and Russia conquerors are not famous for mercy. We probably won’t get reservations. We can and will sue in the international court. Vigorously.

    13. Lexington Green Says:

      There is another factor. An oligarchy has to be united by cultural norms and ideology. Those norms and beliefs can be more or less congruent with real, existing human nature, with practicality, with ruling well, with creating loyalty or at least acquiescence among the ruled.

      I see no sign that our currently congealing elite is well positioned in this way. Its ideology is a mishmash of inconsistent, politically correct platitudes, which are not well connected to reality and are not well suited to sensible and realistic governance. The norms of this community have some cultural prestige, but also inspire widespread ridicule at least as often as respect or emulation.

      This ideology and these cultural norms are a thin coating over a fairly brutal, harshly materialistic, and narrowly conceived self-interest. It provides no foundation to function as a true elite, which leads by cultural prestige and utter confidence in its own capacity to command. These guys are arrogant, but at bottom many of them are cringing, guilt-ridden liberals. The ones who are not are merely banditti, corrupt rent-seekers who want the perks of authority without the risks and responsibilities, who believe that the American people are chumps who will submit to anything. I think that is a badly mistaken presumption.

      The best of the French aristocrats went to the guillotines sneering at the mob, radiating an intimidating hauteur based on total self-possession and total self-command and absolute belief in their superiority, even though they were bound, bloodied, clothed in rags, and doomed to die.

      This crew is a very pathetic example of a ruling oligarchy.

      So far.

      They can be beaten.

    14. Joseph Somsel Says:

      To expond on Mr. Green, again, revolutions like the Russian and the Iranian, often start with well-meaning, civilized people hoping for a better way of life. Far too often, those revolutions are captured by the most ruthless, most brutal elements making the end state much worst than the orginal problem.

      Once a breakdown in trust in the central political institutions reaches a certain point, we’d see the same processes here. Most Americans would have some idea of what they wanted to see happen but several armed, desparate groups would start competing for supremacy. As the scenario predicts, a significant possibility is that local police would become war lords. A military Praetorian guard might also arise and seize control of Washington.

      When I heard Gates complain that unless Congress got off its collective duff and passed a budget, the troops wouldn’t be getting their paychecks next month, I got the shivers.

    15. cjm Says:

      seems like the kind of break down hypothesized above, would lead to marshal law, and eventually a dictatorship — much like what happened in Rome when JC took over.

    16. LAG Says:

      “As society broke down, the police became warlords.” I was lost at that line.

      Recall a few years back the trouble the LAPD had putting down two heavily armed bank robbers. Those two criminals were stand-ins for the thousands of armed citizens that simply would not accept a “warlord” class without question. Much else in the succeeding discussion fails on that account.

    17. Paul Milenkovic Says:

      LAG, you are probably talking about http://en.wikipedia.org/wiki/North_Hollywood_shootout

      Besides being criminals, the two men involved were complete “head cases”, not only in terms of being heavily armed with illegally modified full-automatic weapons but also with their home-stitched “bullet proof suits.”

      Leaving out whether the mass of “concerned citizens exercising there 2nd Amendment Rights” have that kit stashed somewhere to become latter-day Minutemen in the case of some complete collapse of society, the two criminals involved were essentially committing suicide once it came down to a stand-off. Yes, the patrol officers complained of the bullet proof suits resisting their pistols, but SWAT teams were soon on the scene, and both men were brought down by shots to the extremeties — what were those “clowns” even thinking?

      The direction this thread has gone is not just a conceit of the “right wing.” A “liberal-left” friend of mine who was vigorously against the Iraq War would talk derisively about the movie “Red Dawn” (a fantasy of the Right through the lense of the Hollywood Left), but turn around and talk in romanticized terms about the Iraqi Insurgents, saying that if what “we” were doing to “their” country were turned around, my liberal-left friend would indeed join the “insurgency” as in the movie “Red Dawn” after all.

      Having had the life experience of parents who were refugees from the “killing fields” of what was WW-II Yugoslavia, I tried to explain to him whatever his views on the injustice of the Iraq War, being part of the Iraqi Insurgency was nothing like he thought it to be, and that the causulty rates of insurgent fighters, be they Tito’s or Draja’s resistance fighters, the Viet Cong, or the Iraqi Insurgents were way beyond his imagining. Even in such successful ambushes as the Viet Minh action against the GM-100 of the French, all of the accounts are of the losses inflicted on the Colonial French and little is said about the sacrifice in General Giap’s men to pull this off.

      So, yes the “Right” and the “Left” can drift off into such fantasy (plate-glass windows anyone), but we would all be better off to keep the “tough talk” down.

    18. Joshua Says:

      Joseph Somsel: To expond on Mr. Green, again, revolutions like the Russian and the Iranian, often start with well-meaning, civilized people hoping for a better way of life. Far too often, those revolutions are captured by the most ruthless, most brutal elements making the end state much worst than the orginal problem.

      As I’ve argued on other blogs, if things ever do come to blows here in the US what worries me is that we’ll be in need of a latter-day George Washington, but instead end up saddled with a latter-day Oliver Cromwell.

    19. Lexington Green Says:

      I see zero reason that peaceful political change would not be sufficient to make basic reforms inthe country.

      I have no romanticism about and certainly do not advocate any other methods.

      America was much closer, episodically, to violent political change circa 1890-1932, and briefly circa 1967-72, than we are today. I do not see realistic scenarios that lead to a violent clash. Almost everybody has a stake in basic stability, even the oligarchs who I hope will be political and economic losers in the years ahead.

    20. gringo Says:

      “The ones who are not are merely banditti, corrupt rent-seekers who want the perks of authority without the risks and responsibilities, who believe that the American people are chumps who will submit to anything. I think that is a badly mistaken presumption. ”

      Lex, I agree with you re. our countrymen when it comes to submitting to too much unfairness or hardship caused by leaders. The problem is that they (we) are largely dangerous children, and, when stressed, unprincipled. Chances are the republic won’t be restored….and democracy leads pretty quickly to authoritarianism, doesn’t it?

    21. PenGun Says:

      Things have changed a lot.

      The oligarchy that controls the US government also controls the rest of what is known as the G20. It’s worldwide.

      The present situation in the US is really a loss of control of the Ponzi scheme you call an economy. You are amazingly bankrupt. You must remember “mark to market” is gone and any large financial enterprise can just say whatever it wants about it’s assets and liabilities. They lie.

      The “free money” the Fed doles out to it’s favored institutions has been used to fill their coffers and enrich their executives. Almost none has been used for what it was intended for by the government. Or perhaps it has.

      There is no way you can meet your obligations going forward and you will either default or print your way to hell.

      Anyway … you going down. It suits my purpose but I would rather you had lead the world somewhere instead of becoming the Leviathan. They don’t last long.

    22. Mitch Says:

      Economic dystopian porn is no more credible than ecological dystopian porn. Enough already. Yes, Babylon fell on hard times because there wasn’t enough wood around. The fertile crescent had salinity problems. England at one time devoted 1/3 of its farmland to oats to feed its horses and had nowhere to put the manure. There have been plenty of times where a concerted effort or perfect stupidity could have made our species extinct.

      Every time so far, people have found a way to survive, thrive, advance the culture, and make a few bucks doing so. Every time. Don’t bet against us, unless I get a to fade you. I could use the money.

    23. Jose Angel de Monterrey Says:

      Define “Oligarchy”, 1.
      a. Government by a few, especially by a small faction of persons or families.
      b. Those making up such a government.
      2. A state governed by a few persons.

      I think Oligarchy is an old fashioned term, it was coined by the greek when such power structures existed, but I dare question is validity today to define modern societies, it is too short and simplistic.
      Cuba has been governed by one single family for the past 50 years, and this same family controls not only the government, but also the economy, the media, etc. There is an oligarchy according to this definition, but then again, this is not a modern society.
      The same happens in North Korea where a single family controls everything, the political, economic and cultural life of the country. A small powerful and obscure political and military group controls China, they also use their political and military power to build their fortunes and they own many companies that have contract with governments and state companies. These are not modern societies, although some, like China, are probably transitioning into modern societies.
      Salaries are low in Latin America because for each job opening there are hundreds of job seekers, and many other reasons, perhaps the most important is that for centuries our populist politicians have consistently destroyed the creation of wealth, the sooner you create a productive and thriving enterprise, the sooner the state nationalizes it to get the wealth and spend it or steal it. Also, Latin American peoples, in general, lack the technological education to earn the same as Americans, Europeans and Japanese. In Brazil, it takes 152 calendar days to do the legal paperwork necessary to start a business, five days in the United States, the list of reasons why salaries are low is long and could be discussed in another post, I don’t say that we in Latin America are modern societies, but we are transitioning too and I don’t see how the term “Oligarchy” applies to us.
      Define “Oligarchy” please, we live in an information age, we could have specific names. Those who talk about “oligarchies” should name some, for example: Bill Gates? Steve Jobs? Their companies’ stock is disseminated around the United States, thousands of people own stock of Microsoft, Apple, Ford, GE, etc. But the fortunes of these rich men are dictated by the results of their companies and business, not by their control of the government or the society.

    24. david foster Says:

      Jose Angel de Monterrey…”In Brazil, it takes 152 calendar days to do the legal paperwork necessary to start a business, five days in the United States”…this may be true as far as the basic legal forms of incorporation go, but if the business exists in physical space and especially if it makes a tangible product, the process is likely to take far longer, when you consider things like zoning and environmental approvals for construction, required regulatory testing of products (viz the Consumer Product Safety Improvement Act, etc), and so forth. Even if the product exists soley in virtual space, such as a software or web business, you may need to spend considerable time dealing with patent issues, given the expansion of the patent system to encompass software and even business processes.

      Not disagreeing that the U.S. is still ahead of most countries on the time-to-start-a-business metric, but the lead is being eroded by unwise policies.

    25. John Burgess Says:

      Paul Milenkovic: The experience of that robbery was what led to the creation of SWAT teams. The LAPD at that time had to go to local gun stores (see, this is history!) to obtain higher-powered guns than their standard issue. Extrapolation from that experience caused the LAPD and other ‘progressive’ PDs to up-arm and -armor.

      The philosophy/psychology that led to the militarization of civilian law enforcement is another story…

    26. Michael Kennedy Says:

      The movie Red Dawn had a disappointing ending in the theatrical version but I recently had occasion to watch the “deluxe” version DVD and it was interesting to see that the ending is different. The theatrical version had the limp wristed Hollywood ending, “The war ended as wars always do…” The DVD version was quite different in tone.

      A remake is being done. I wonder why?

      I don’t see either the police or the military becoming “warlords.” The two most conservative entities in American society are the military (Which is why Obama is trying to block military ballots) and police rank and file officers. I think the voters will run these pharisees out of the temple but, if they try to resist public will, they have pretty weak allies.

      The story of the French Revolution is a lot more complicated than the usual schoolbook version. Many of the revolutionaries were members of the nobility. Until the Terror, there was a reasonable chance of success. Robespierre was one of the most interesting characters of history. He kind of reminds me of Obama although I don’t think Obama has the stones to follow his example.

    27. Jose Angel de Monterrey Says:

      David,
      It is true that in Brazil, Mexico and Latin America in general you can start your business physically and begin to produce or sell right away without going through the lengthy process of red tape. But only as long as it makes sense Vis-à-vis the risks of the economic activity you pretend to undertake. In other words, it makes sense for a person with no education to start his or her small business, like selling food or a mechanic shop in his home or even in the sidewalk as it is very commonly seen in poorly regulated societies like ours, because the risk there is minimum or non-existent, you can open your business today and close it tomorrow the same and start another one the next week and the investment in financial and technological terms is marginal.
      But these informal activities provide for low paying jobs and most times end up disrupting the country’s economic activities. Indeed hundreds of thousands of small unregulated and illegal retail merchants in Latin America are almost solely responsible for the disappearance of the entire textile industry in the region with hundreds of thousands of jobs gone forever. These small “personal businesses”, which don’t pay taxes and are tolerated by inefficient and lenient authorities, are a de facto distribution channel to smuggled Chinese clothing and shoes and used, second-hand clothing also smuggled from the US.
      But opening a business with a technologically value added product or service in this region of the world is a totally different animal. You’d have no second thoughts to make the investment in the United States, dutifully wait your five days and pay your taxes and comply with any other regulatory burden, because your intellectual property rights will be protected and enforced, but you will certainly think twice before making the same investment in Latin America, and indeed many entrepreneurs here move to the US to start their ventures or businesses and patent their innovations.
      There’s a lot of talk today about Brazil, but most of their growth is based on a commodity boom. In my opinion, there’s no industrial revolution going on there.

    28. Paul Milenkovic Says:

      “I don’t see either the police or the military becoming “warlords.” The two most conservative entities in American society are the military (Which is why Obama is trying to block military ballots) and police rank and file officers. I think the voters will run these pharisees out of the temple but, if they try to resist public will, they have pretty weak allies.”

      I think you will find police officers to be conservative with a small “c”, but perhaps Democrats with a capital “D.” Whereas police are in constant contact with the disasterous consequences of schemes advanced by the liberal-left and may be the first (privately) to offer criticism, they are after all government employees and many, in my experience, are skeptical if not outright hostile to the “anti-government” stance promulgated by Conservative, Libertarian, or “Tea Party” political movements.

      One interesting data point is an acquaintence from Lower Michigan with Upper Michigan ties, a Colonel in the Army Reserve or National Guard (not sure right now), but with contact with the “‘hood” in Detroit, who speaks openly of the challenges of getting those young men who volunteer into the ranks of the Army. He spoke well of his charges from that background, apart from voicing the concern that when they have “brushes with the law” it has the effect of keeping them out of the Army, but apart from that, he had good experience getting his recruits to accept Army discipline.

      The reason I give this background is that this man fits the “profile” of someone who would be sympathetic to the mind-set of the Upper Michigan “militia group culture”, or at least has a love of the outdoors, guns, and all of that, a culture which is largely white in the way the recruits from Detroit are mainly black. On the other hand, it has been commented elsewhere that our most effective soldiers these days are the “country boys” as well as the “city kids from the mean streets” as each of these soldiers seems to have a knack for smelling out the danger of IED’s and insurgent ambushes.

      His one remark that stuck in my mind was the “problems” he has (this is not a man who speaks of “issues”) with right-wing groups who talk loosely about combat with the police, even if this is just “a post society-collapse contingency.” That is not an idle concern given some recent arrests of members of such a militia. Of course the liberal-Left would like to paint all people “who would like to exercise their Second Amendment Rights of self defense” in that light, but my point is that we shouldn’t walk into that corner with poorly chosen words.

    29. Majormarginal Says:

      A lot of talk about the police and military becoming warlords. Some talk about militarization of the police. Talk of the police being quiet in their critique of the problems of modern society.

      In my humble opinion the military will live up to their Oath as will the police. Most rank and file policemen are supporters of the right to bear arms. The police have not been militarized. The rank and file officer has attitudes similar to an infantry soldier. The police and military are not the same type of organizations and have different missions.

      Policemen are not shy in voicing their opinions and complaints. I would recommend the blog secondcitycop.com as an example.

    30. Michael Kennedy Says:

      If you get to spend time with rank and file cops, you will begin to hear what they really think. A good introduction to the culture of cops is to read WEB Griffin’s series of book about the Philadelphia police. There are about 8 or 9 books in the series. They are prominently displayed in the bookstore of the FBI Academy, which I took to be a strong endorsement even though the books ridicule FBI agents most of the time. He also has a series on the military that is highly popular in that culture, too.

      There is some concern on the part of cops about blowback from their political masters. Some, like Jack Dunphy use pseudonyms.