Monthly Archives: June 2022

Ideological Capture

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Image that you are a management type and you get hired into the third tier of management at a good sized firm. The top tier is the executive staff like the CFO and CEO who control the overall direction of the firm. The second tier is the policy making tier, like vice presidents and regional directors. They take the vision of the top tier and turn into company policy. The tier into which you have been hired is tasked with implementing and enforcing these company policies.

Further, let us assume you are an enthusiastic follower of a management style that is called “management by committee.” You think the best way to run any organization is through committees that debate amongst themselves and then create reports that some other committee turns into directives. Your new job is in a company that is still in growth mode, so they are not burdened with management philosophy. The third tier is just supposed to get the job done.

Soon into your new job you find other fans of the MBC school and you form a clique within the company. None of your bosses are MBC types, but they are not hostile to your ideas, just as long as the job gets done. One of the ideas you talk them into is having managers in the third tier incorporated into the hiring process. Candidates for management jobs will sit before a committee of middle managers who will then pass on their assessment to the people making the hire.

You are a committee guy so you make sure to be on this committee and you get your buddies in the committee subculture on the committee as well. This is exactly the sort of innovation you have been seeking. The “promise” of this new step is that people hired in will fit the general culture. As a practical matter, it means the committee will select for people who like committees. It does not take long before adherence to the management by committee philosophy is a selection criterion.

Since there is a decent amount of turnover in the middle and lower management ranks, it does not take too long before most managers are committee men. This new selection process, controlled by committee men, selects for committee men or the type who could be groomed into committee men. A big part of the management by committee philosophy is grooming normal people into the committee lifestyle. Being a committee man is a de facto requirement for employment.

The second tier of management has far less turnover than the third and fourth tier, as these are important posts that pay exceptionally well. By their very nature there are few of these jobs in any company, so there is not a lot of circulation, but from time to time a spot does open in this layer. Ideally, the executive layer selects from the third tier of managers to fill these roles. Presumably, these are people who know company culture and have been vetted through trial and error.

Because you and your fellow committee men have been selecting for committee men in the ranks of management, the options for the executive staff when it comes time to fill a vice president slot is all committee men. The management by walking around guy who ran the West Coast division retires and there is no one like him to bump up into his position, because that type does not exist on the bench. That means hiring from outside or elevating a committee man into the second tier.

The executive staff of the company is now faced with a crisis. While they were busy with setting the general direction of the company, they have been infested with a new management style that now limits their range of motion. If they want to change the company culture, say reduce the number of meetings and standing committees, it means making wholesale changes in the ranks. Alternatively, it means finding a way to make this new management paradigm work.

Now, if instead of starting point being a middle manager from a management cult it is a homosexual priest, a climate change crank or a neoconservative. The homosexual priest gets into the ranks and starts to agitate for his people and before long you have a lot of homosexual priests. This is how climate change cranks have infested the ranks of energy and environment to the point where they control these areas in the managerial class, publicly and privately.

The neocons are front and center at the moment and they are the most obvious example of this process. Over time they have infiltrated every nook and cranny of the foreign policy establishment. When the Democrat president takes over for a Republican, the neocons who infest Republican ranks move out to think tanks, while the neocons who infest Democratic ranks take their positions in government. When the parties swap again, the neocons swap again.

If like the executive management of the hypothetical company, you are the new president with a rational vision for foreign policy, you will be faced with the problem of finding anyone who is not neocons. Everyone with any experience in the State Department, foreign service or national security is going to be a member of the bizarre cult that has taken over these fields. Before you could do anything, it means a revolution within these areas of government.

Something similar is happening with energy. Putting together a rational energy policy is impossible because everyone in that sector is now committed to the “green agenda” which embraces irrational energy policies. Notice that the response to the war in Ukraine is a series of policies that harm normal people in the West by furthering the agenda of the environmental movement. The war in Ukraine has given license to the people making war on climate change.

This is why elections are now meaningless. So meaningless, in fact, that they will slowly go away entirely. The ruler of Italy, for example, was not elected. He was installed by Brussels, which is not elected either. The response to Russia is being crafted in Brussels, not the capitals of Europe. Closer to home, elections are now just an orgy of absurd corruption like ballot harvesting, mail in voting and so on. Why try to convince people when you can just make up the results?

The collapse of elections is just a reflection of reality. You can vote yourself bloody, but the people holding office are faced with the same dilemma as the executive managers in the above example. They must fill their staff from the pool of true believers that exist in the Washington policy establishment. They are set upon by true believers from think tanks and lobbying firms, who actually write the legislation. They are swimmers trying to change the direction of the ocean.

What we are witnessing is ideological capture. This is where a small, but committed group can wield majority power, as long as the majority is divided into smaller groups or not bound by an alternative ideology. The homosexuals could infiltrate the priesthood because the Church was not explicitly anti-homosexual. The normal priest worried about the issue would be outnumbered by the pink mafia and have no internal structure on which to rely for support in the fight.

The priest problem is good example of how you cannot solve the problem of ideological capture with rules or systems. The Church had rules against raping altar boys and fornication, but that did not deter the homosexual priests. Instead, they organized to take over the system in order to get around these prohibitions. It turns out that rules and principles are no match for a dedicated minority that has no respect for the spirit behind those rules and principles.

This is the problem faced all over the managerial class. Any reform attempt must start with the removal of the infestation. In the case of foreign policy, it means a decapitation of the neocon establishment, both in government and outside government. You would have to fire everyone, remove their security clearances and maybe put a few in jail to publicly discredit the cult. Given the scale involved, that may not be possible, even if a president was committed to it.

The same process would have to happen with the climate cranks who have infested energy and environment. The regulatory state is now stocked with people who think their lawnmower is out to get them. The same holds for the Department of Justice and the FBI, as we saw in the Trump years. The managerial class has been captured by what should be described as a cult. Across the system, members of this bizarre new religion now wield power and control policy.

This is the truth of ideological capture. Once the infection sets in, the rules are slowly turned to the favor of the ideologues. Therefore, any effort to use the rules to disinfect the system ends up profiting the ideologues. The people vote for George Bush and they get Lyndon Johnson. They vote for Barak Obama and they get a different version of Lyndon Johnson. They vote for Trump and they get Nixon. The outputs no longer reflect inputs, because the rules no longer matter.

If you like my work and wish to kick in a few bucks, you can buy me a beer. You can sign up for a SubscribeStar subscription and get some extra content. You can donate via PayPal. My crypto addresses are here for those who prefer that option. You can send gold bars to: Z Media LLC P.O. Box 432 Cockeysville, MD 21030-0432. Thank you for your support!

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Perpendicular Parallels

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For those old enough to recall the 1970’s, the present economic turmoil looks a lot like the stagflation from fifty years ago. Just like a half century ago, we have a mix of inflation, economic stagnation and incompetent leadership in Washington. Joe Biden is not exactly Jimmy Carter, as Carter was an honest man, but like Carter, the public sees him as a man out of his depth. Like Carter, he wound up in the job due to a crisis within the political class over a previous president.

It is a comforting parallel for many people, because if the pattern holds, it means there is a Ronald Reagan coming after Biden. The saner elements in the ruling elite will rally to a sober minded governor who can withstand the progressive crazies. Many people are looking at Ron DeSantis as the man who can save the system. Trump running in 2024 could throw a wrench in the story, but maybe the ruling elite has a plan to get that element out of the script so the story can continue.

This problem with the script is a reminder that historical parallels are like all generalizations in that they are a starting point. They help frame the times to better understand the details. We know the general plot of one side of the comparison, so it allows us to infer things about the other side. From there we have a basis from which to analyze the present. In this comparison, however, the observable similarities have different direct and root causes.

For example, the current energy crisis is different from the crisis in the 1970’s, which was mostly driven by the currency war and an oil embargo. The collapse of the post-war currency arrangements not only gave us inflation, but it also created havoc in commodities, which are sensitive to currency fluctuations. The big driver was the Arab oil embargo over US support for Israel. The embargo was always a short term strategy to get a better deal from the West.

The present energy crisis is primarily systemic. Generations of mismanagement are finally showing up in the price. The United States was the largest exporter a few years ago, but then the government reversed course and exports have collapsed, making America a net importer again. Europe is smashing its energy system in an effort to make the Russians look bad on Twitter. There is more than enough energy to go around, but the system to distribute it is collapsing.

In the 1970’s, the solution to the energy crisis was to make a deal with the Arabs so they would end the embargo. There were lots of new energy schemes launched to take advantage of the crisis, but the final solution was a deal with the Saudis. This current energy crisis does not have a simple solution. In the West, energy policy has been corrupted by the same cranks who have corrupted the culture. It will take a revolution to fix that problem in order to fix the policy problems.

Systemic problems are also at the heart of the inflation crisis. In the 1970’s, the issue was the old fashioned Econ 101 problem. There was too much money chasing too few goods, resulting in inflation. This time, the issue is more about systemic problems in the global monetary system and in the global supply chain. This is where dumb people like to say, “it is as simple as…” and then finish with their favorite bromides from the Mises Institute, but the current inflation crisis is not a simple one.

For starters, the monetary system that was put in place in the 1980’s assumed a few things that are no longer true. One was that the excess dollars created by Washington would be absorbed and laundered by low cost counties. This worked while Asia had an infinite supply of cheap efficient labor. Extra dollars could flow into these countries as economic investment. The extra from developing countries would then return in the form of assets like treasuries and equities.

That system is breaking down for two main reasons. One is China is becoming a mature industrial nation, which means labor is no longer cheap. The Chinese understand this and they are shifting policy to encourage domestic consumption rather than focus on exports. All of a sudden, those extra dollars are no longer as welcome in China as in the past. Instead of returning as assets to America, they hang around the system chasing too few retail goods.

Another cause is the breakdown of the dollar system. The dollar itself is doing great, but the rest of the global currencies are not doing so well. Their strength has been pegged to the health of the system based on the dollar being the global currency. As this system shows signs of crisis, the weaker currencies are in free fall. The Euro, the secondary global currency, is falling sharply. Of course, the ruble is booming, due to the crackpot policy response to the war in Ukraine.

The point is the solution to the current inflation is different from what happened fifty years ago because the causes are different. In the 1970’s, the Fed could tighten the money supply, wring out inflation and force a corresponding correction in the system with a deep, but short recession. This time, simply raising rates will not be enough to address the inflation problems. It could also trigger a crisis in the financial system, which is built on the assumption of free money from the Fed.

There are more comparisons like this, but the bottom line is that the crisis of the 1970’s is similar to this crisis, but the causes are different. Back then, America was a healthy business in need of new management. The demographics were good, the social capital was still strong and the working population was young. More important, the ruling class wanted a strong America and saw it as their duty to deliver it. A few tweaks to the system would unleash the economic power of the country.

The current crisis is driven by different forces. This is an end of cycle crisis as the American empire reaches its terminus. Critically, the demographics are much worse, the productive population is old and the social capital has been spent trying to prove Mother Nature wrong for fifty years. More important, the ruling class is now populated by feckless grifters and ridiculous people. They see their duty as throwing fuel on the fire in order to prove how little they care about the country.

What this comparison between this crisis and that of fifty years ago reveals is that this crisis is different in nature. There are general parallels, but the underlying causes are vastly different and that means the results will be different. New management may walk through the door in the next election, but unlike 1980 they will be taking control of an enterprise that needs bankruptcy protection. It may even require a fire sale to clear out the unproductive segments at the top.

If you like my work and wish to kick in a few bucks, you can buy me a beer. You can sign up for a SubscribeStar subscription and get some extra content. You can donate via PayPal. My crypto addresses are here for those who prefer that option. You can send gold bars to: Z Media LLC P.O. Box 432 Cockeysville, MD 21030-0432. Thank you for your support!

Promotions: We have a new addition to the list. Havamal Soap Works is the maker of natural, handmade soap and bath products. If you are looking to reduce the volume of man-made chemicals in your life, all-natural personal products are a good start. If you use this link you get 15% off of your purchase.

The good folks at Alaska Chaga are offering a ten percent discount to readers of this site. You just click on the this link and they take care of the rest. About a year ago they sent me some of their stuff. Up until that point, I had never heard of chaga, but I gave a try and it is very good. It is a tea, but it has a mild flavor. It’s autumn here in Lagos, so it is my daily beverage now.

Minter & Richter Designs makes high-quality, hand-made by one guy in Boston, titanium wedding rings for men and women and they are now offering readers a fifteen percent discount on purchases if you use this link. If you are headed to Boston, they are also offering my readers 20% off their 5-star rated Airbnb.  Just email them directly to book at sa***@mi*********************.com.