Thursday, November 21, 2013

Conspiracies and Inflation

"Adjusting for Inflation" is the first section of Peter Drucker's 1980 book Managing in Turbulent Times:

 "...Making a profit is by  definition impossible in an inflationary period, because inflation is the systematic destruction of wealth by the government. The public, it should be said, senses this, even though it does not understand it. This explains why the announcement of these "record profits" is being greeted with such skepticism by the stock exchange and with hostility by the public at large." (p 10-11)

As you know, the climategate scandal, exposed in November of 2009, is about scientists censoring and falsifying data, and suppressing other scientists, in order to uphold a "party line."

Conspiracies and Inflation
A local bookstore has a fresh new copy of Mein Kampf, —with a smooth black cover, naturally. Strangely enough, when I saw the film American History X, a film where a teacher is incensed that Edward (Terminator 2) Furlong's character does a book report on Hitler's work, I got the distinct impression that some U.S. high schools censor that book. How silly. My own secondary school shelved not only that book but also William Shirer's Rise and Fall of the Third Reich. At my school Hitler's book gathered dust, while Shirer's book hinted at what would have happened if our teachers had tried to use censorship: The German government caused parts of certain pages of school books to be censored by pasting paper rectangles over them, then the German students, typical of youth in my own day, proceeded to sneak some steam kettles over to see what being hidden. So it's better, I think, to allow Mein Kampf to gather dust in plain sight.

The book is too big for kids to read, anyways. They'd be bored. In fact, a 1980's Hollywood miniseries, to retell the story of the Nazis, according to a 1980's newspaper interview, had to resort to a stratagem: the Nazi shoulder logo was modified, blocky luger pistols became blocky blasters, and the Nazis were changed to so-called "Visitors." The "party line," on billboards everywhere, was "The Visitors are your Friends." They had space ships: the series was called V.

As for Mein Kampf, even the Germans mostly did not read it. According to Shirer, the tome was merely set on their coffee tables as a comfort piece. The amazing thing, to Shirer and me, is how even though Hitler so clearly laid out his plans for living space, plenty of U-boats, etc., etc., the world didn't think he would so much as re-arm, let alone annex Austria and so forth. But I'm not bitter.

Like they say, "Judge not, lest ye be judged." Last summer I heard a recording of Prime Minister Chamberlain's "Peace in Our Time" speech. The crowd cheered wildly. And why not? The Great War had taught them how war is not glorious, a lesson the kids in the 1960's claimed to have discovered all on their own. I'm sure Churchill himself read the book—but he was such a brave man. As for the rest of the public, I think the "conspiracy" of no one considering out loud the "price of peace" with Nazis was not a conscious one, but rather, reminiscent of Star Trek's PrimeDirective: Some things society is not yet ready to know, and it does no good for a Churchill or anyone else to try to "break the directive" and speak out. And if something harsh comes by like inflation, and then, when the inflation rate lowers, people instantly forget the harsh inflation, then isn't that, besides being a prime directive thing, a form of mass self-censorship?

An actual conspiracy, which at first we could scarcely believe, was the White House doing Watergate, and President Nixon having secret tape recordings. Now we all believe the White House could do such a thing, and perhaps even house war criminals (torture in a naval base) but at the time people "staggered" when they heard the news. Many folks initially believed Nixon's compelling speech (which I have heard) announcing that certain people had resigned, yes, but Nixon firmly believed they were "good men" who would eventually be found innocent. In fact, they never went back to their positions, going instead to jail. We still remember Watergate; It's hard to believe that we could forget a concurrent conspiracy, once it was exposed.

I lived through a conspiracy more damaging than Watergate. Of this I am sure.
The results can be seen around us:
An historically new lack of job loyalty and job security. Careerism. No loyalty between top and middle executives, or to the rank and file. Leveraging. Hostile takeovers, with sell offs to make money—but not "wealth"—on paper. Conglomerates. Greenmail to prevent takeovers. Downsizing. Almost none of this was happening back in the days of the TV series Mad Men, back when I was young, certainly nothing on the scale of today. Inflation, with it's new time-lines and new Return On Investment equations has changed business incentives. New incentives mean new behaviour. The change in behaviours have then changed the moral fabric of the nation.

The ripples of disaster are still spreading. The investigative magazine Mother Jones, in the April 2007 edition, presents a convincing case for the decline of print newspapers, and the decline of ethical journalism, being not from the internet, but rather, from takeovers of print media by conglomerates. Hence, due to financial incentives, the culling of newspapers and their assets to make paper money, downsizing of beat reporters, and then blatantly favoring the conglomerate's less ethical electronic media, of course. (The difference between print and infotainment journalism is beyond the scope of this essay)

This all began in the 1960's with presidents Johnson and Nixon. A few years before the OPEC energy crises I recall my school principal, Wes Jansen, telling us how the experts were baffled, mystified, how no one had predicted there could ever, possibly, be such a thing as "stagflation." (Inflation plus a stagnant economy.) A U.S. leader, Gerald Ford, had faith in distributing buttons saying WIN, for "Whip Inflation Now."  I wonder if people remember how awful those years were.

Meanwhile, there was Nixon's contemporary, a Canadian prime minister, a man with just as much credibility—and more scholarship—than a Kennedy or an Obama. Yet even he, Pierre Trudeau, was either taken in by the conspiracy or was a part of it. He called loud and long for Canadians to voluntarily heed his "six and five" plan. Meaning: percentages of increases for wages and prices. (Canadians, mindful of history, never legislated or froze wages and prices. Such legislation had been a disaster  for the Romans, as a Canadian newspaper explained at the time, when Canadians and US citizens were  getting desperate) This was the best solution Trudeau could offer, since inflation was such a mystery. Say it in a spooky voice: "No one knows what causes inflation or what any real solution might be." In the U.S., as in Canada, a "consensus of scientists" with Ph.D.'s in climat—er, economics, gave the people no hope.

In community college, in the 1970's, I took an economics class with a hybrid text book made for both high school and college. We took "M-1" and "elasticity," but, what we did not take was whatever was causing our inflation. I looked through the text. Nothing. I did not find a "smoking gun" (proof) for the inflation conspiracy until I found business guru Peter Drucker quoting an angry Secretary of State Henry Kissinger justifying inflation. But this I didn't find until later.

Back in the mid 1970's there was a maverick, Robert Ringer. An author. His brand, long before people talked of branding, was to be a tortoise. An appropriate brand, actually, since reality can be too grim without a salting of humor. I chuckled when the tortoise published two best selling self-help books, one of which featured praise from Ann Landers on the back cover. Then came his third book with this quote—can you sense his desperation?
... Almost without exception, the politician who gains public support for his "inflation fighting" measures usually proposes actions that will make inflation worse.
If this chapter is the highlight chapter of the book for me, then the upcoming paragraph must be considered the highlight paragraph of the book. If I were asked to name one thing, above all else, that I would want readers to understand and remember from this book it would be the following:
Increased wages and prices do not cause inflation; in fact, they do not even contribute to it. Inflation is caused by only one thing: an increase in the supply of money. ... wage and price increases, in other words, are the result of inflation.
Restoring the American Dream, 1979, by Robert J. Ringer.
I suppose the righteous ink of Ringer's book slowly began to stain black the tide of ignorance, at least amongst the reading classes.

By the mid 1980s I can remember an upper middle class straight A student, John C., at a Canadian university, contemptuously telling me that it was a "generally accepted" truth that inflation was "partly" caused by government printing too much money, but I remember, as we talked, thinking that if you walked down main street, entering into the working class bars and beauty parlors, you'd find the people there most certainly did not know. They still don't: my bank has to remind people to save extra pension to account for future inflation. However, I have read a few times in the newspaper how the government thinks a certain amount of annual inflation, and unemployment, is good for the public, for the economy, so I guess the word has been getting out. But nonetheless, I think the good people lining up in the bank with me still think, in the backs of their minds, that inflation is unnatural, not fair, and that government would stop inflation if it ever learned what causes it.

And here is the irony: For all the years our inflation was causing all this wailing and gnashing of teeth... for all this time, in libraries all across the land, Mein Kampf and Shirer's book were sitting quietly. Yes, Hitler was an evil genius, but he was a genius, albeit a flawed one. Under his watch people went from bringing their inflated pay home in a wheelbarrow... to seeing inflation whipped, beaten, and run out of town. He did this by tying money to a standard—not a gold standard, though: I guess the Germans had lost all their gold after losing the first world war. If in my youth a "consensus of scientists" failed to point this out then I can only say their failure was at best a prime directive thing, and, at worst a conspiracy. Wait—did I mention Kissinger? It was the "at worst."

If today some "good scientists" share a secret consensus of permission to do climategate, then—how? Perhaps it's made possible because there is no competition, no separate nations of calm scientists objectively putting out the facts for respectable citizens to consider. Instead, there is a monopoly, full of sound and fury, a so-called "intergovernmental panel." (I still can't believe how the panel writes their summary first, and then squeeze down their report to fit the summary) In contrast, when some quantum physics guys claimed the planets orbited the sun due to space-time curvature, not gravity, they formed no panels, conducted no coercion. No scientist was labeled a "relativity denier." A skeptic, sure, but not a denier. (Someone once told me the French, at ten years, had been the longest holdout.)

Recently the local newspaper carried a column by a professor who thought he was putting forth a good case for climate change being man made... if only he hadn't liberally peppered his column with the unscientific term "denier."

It seems to me that climate alarmists (such as the journalist in my essay Angry With Crichton of Nov 2011) lose their faith in democracy, thinking that information has to be censored for our own good.

I disagree with them: Yes, the public includes rather few physicists, and yes, many of us prefer TV to books or newspapers. But we all believe in progress. The public may need to take a step backward, and rest, for every two steps forward, but still, most of us, most of the time, want to do the right thing. Democracy is good enough.

Sure, sometimes it seems information only gets out by tortoise, not carrier pigeon. Yet the news gets out... and data, like power, is safer with the people, not confined to cold Harvard nerds like Kissinger. Having faith, I try not to censor others. ... and I try not to self-censor my choice of reading material.

... Meanwhile, in libraries all across the land, books are standing mutely, books that stand ready to put forth "the theory and philosophy of Science."

Sean Crawford,
Believing in climate,
Believing in a falsifiable hypothesis,
November 3013(.37)

~I guess Trudeau was indeed a part of the conspiracy, for on Feb 6, 1966, "Canada decides to sell $100 million of it's gold reserves to the U.S. signaling financial co-operation,"according the newspaper's 'this day in history' section for Feb 6 in 2010.
It was only five years later, with the US already off the gold (redeem) standard internally, that the US announced it would no longer redeem it's  dollars with gold internationally. This Nixon shock was in October of 1971. 

~My  favourite scene (from memory) in V is where a dear old lady actress, who had been a  girl in the resistance in Europe back  during the war, has dressed herself to look innocent. She is going up a staircase at headquarters, to go off on a mission, when a hardbitten seemingly uncultured fighter admits to having seen her perform on stage years ago. She stops in surprise, squints  down at him,  and says, "When I return we will have have to  talk." Later the granny runs into a young man with a V armband and  a blaster, and tells him, "I have known you  since you were a boy…" and the man (The same age as Mr. Snowden and others in the NSA doing domestic surveillance)  then has to balance  freedom with the security and order of the Visitors.

~I have essays on Media Ethics and Reading Newspapers archived in November of 2012

~"...But in the 1980s, with the three networks now run by corporate conglomerates, the commitment to the dollar replaced the commitment to excellence. News bureaus were cut back in personnel and budgets. Veteran reporters who had risked their lives in Vietnam and other danger spots were discharged—all this while a few well-known anchors and reporters demanded and received extravagant salaries…."
How To Watch TV News, Neil Postman, Steve Powers, p.53, 1992

~Curiously enough, it was around the time of the Nixon Shock, in elementary school, when we had a rebellious class discussion about "why study history?" while being unfocused as such childhood discussions often are, and when someone(s) asked, "Why not just print more money?" I was able to excitedly raise my hand, (and Mr. McIntyre obviously could tell what I was about to contribute) and then say that just after the French revolution they tried printing lots of money and it didn't work, it caused horrible inflation... Being still innocent about adults, I never clued in that history was repeating!… and none of the adults  around me did, either.

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