Friday, March 21, 2014

The Good Objectivist -- Part Three

The Schism-Minded Objectivist

I had begun to doubt that I would ever write this blog post. In fact, I was glad that I didn't have to. In recent years I have not seen any sort of horrible behavior of the type that this post was intended to address. Either by accident or luck, I have been able to go about my business without crossing the path of many of the breed I call the "schism-minded". Oh, yes, there have been brushes with them but, on the whole, I've neither been targeted or asked to target others in any significant way.

Yet, sadly, today I see yet another Objectivist circular firing squad loading up and it saddens and infuriates me. And, so, the time has come for me to make clear what I've observed and concluded over the years regarding this particular breed of self-destructive and hostile personality.

This post is not meant as a defense or indictment of any particular Objectivist personality-- except, perhaps, those leaders and luminaries in the movement who foster or encourage this pathology. I will try not to name any names. Let's just see where the evidence leads and I'll let you make your own conclusions.

One last note before I dig in-- this is an analysis of a particular subculture and an exploration of what goes on in other people's minds. Therefore, it will inevitably indulge some armchair psychologizing. I'm not a psychologist and, frankly, I believe that the mix of philosophy and psychology that was promulgated in the early days of the movement is probably to blame for many of the cultural problems Objectivists have today. So, let me stress that in this context I am speaking for myself and for myself only, that I do not make any claims to be a medical authority, and I do not intend this to be interpreted as an exact science, but as an exploration and meditation on the dysfunction within our ranks. And, of course, I am speaking about outliers. This is no condemnation of Objectivists generally or even particularly. I have a fervent wish that the schism-minded are a small and eventually insignificant subset of a wonderful and thriving intellectual community.

THE SCHISM-MINDED OBJECTIVIST

The schism-minded Objectivist is, I believe, of greater threat to the future of Ayn Rand's legacy than any collectivist or mystic could be -- largely because he imports into Objectivism traits from both collectivism and mysticism.

First-- what is a 'schism'? It's a term from religion. It means:
a division or a split, usually between people belonging to an organization or movement, most frequently applied to a break of communion between two sections of Christianity that were previously a single body
We all want to belong. We all want to feel we are in the right place, with the right people, doing what's right for the right reasons. This is a common feature in all communities, cultures, and movements. Even in a culture of individuals -- who pride themselves on their individuality -- the desire to feel "at home" is strong. And along with the desire to belong comes the desire to keep out the interloper, the stranger, the impure, the enemy.

When we see this in tribal communities we recognize it immediately. If we see a dark-skinned person born into a group of albino natives we can instantly predict that he will become an object of fear, then anger-- and possibly be pushed from the group altogether. We recognize that any group that organizes itself by a non-essential characteristic -- by race, hair color, lineage, etc-- will expel any member that deviates from such narrow criterion.When I say "schism-minded", I mean an Objectivist who habitually causes such an event or who seeks out such divisions as a matter of policy, creating them where none existed before. 

The issue is most often purity.

The schism-minded objectivist is binary in his thinking. He will declare a certain issue to be non-negotiable, and then like Mickey Mouse hacking the magic broom in Fantasia's Sorcerer's Apprentice cartoon he divides and divides and divides, splitting the movement into tinier and tinier splinters. If he begins with a group of 100 Objectivists, the schism-maker will find wedge issues to divide them into two groups of fifty, then into groups of 25, or a dozen, until if he is lucky he is left with a few souls of sufficient purity to pass his test. 

This behavior has to be confronted and ended. The stakes could not be higher. If Objectivism has failed to change American culture significantly over the past 60 years, the schism-minded Objectivist is the cause.  If the western world collapses because good ideas go unheard, it is at the doorstep of the schism-minded Objectivist that I cast the blame.

THE LURE OF THE ABSTRACT
Objectivists, I find, can be extraordinarily abstract-minded. They are comfortable with handling an enormous number of intellectual linkages. In most, it is simply a love of understanding, of piecing together the observations of a lifetime and focusing one's mind to identify, analyze, and solve the problems of life.

In some, however, intellectual labor becomes an escape from life not a tool for living it. These men and women treat Rand's work not as an explanation of reality but as reality itself. Ideas are not metaphysical, however. They are man-made. Whenever you talk of some abstract philosophical position, you are not actually talking about reality, but about a theory that hopes to identify some facet of reality.

Let's be clear: Objectivism is NOT reality. It is a powerful EXPLANATION of reality.
Where Objectivism fails to explain reality or contradicts it, that aspect of the philosophy must be discarded or put aside. Reality should be the primary focus, not philosophy. Existence is primary, not consciousness.

When discussing philosophy, we are discussing a set of powerful premises and concepts which organize and explain the facts around us. But philosophy cannot replace the living of life itself. It does a man or woman no good to spend a lifetime writing recipes if he never gets a chance to taste the cooking. Philosophy is a guide for living. Too often we are tempted to live to philosophize, which is a tragic reversal of the appropriate hierarchy of values. Sacrificing your life for the sake of Objectivism is a contradiction. A life given over to philosophy can too often become an escape from life, an escape from the concrete into the abstract, an escape from the messy and difficult metaphysical into the orderly and straightforward man-made.

So the first potential aspects of the schism-minded personality we can identify is rationalism, withdrawal into the abstract, and the treatment of an idea as an entity-- to protect ideas as if they were breakable china. These are potential pathologies of the intellectual life in general and of philosophy in particular.

RAND CAN NOT BE HURT
What sort of behavior might we see from someone who has made this error? Rigidity, first of all. When you make ideas primary, questioning that idea will feel like questioning the existence of metaphysical fact. Questioning Church doctrine, to a priest, will feel like questioning the very fabric of reality. Questioning Objectivism, to an Objectivist rationalist, must feel like questioning existence itself.

But questioning per se does nothing to a set of ideas. All the mistakes of all the interpreters in all the centuries have not succeeded in making Aristotle mean the opposite of what he intended. As long as Rand's works exist, are in print, and are finding readers there is absolutely no threat to the ideas themselves -- if I say that ethical egoism is evil and Rand was a vicious monster-- have I changed the facts? Have I made ethical egoism evil? Have I made Rand a monster? No. I am incapable of altering facts with any action of my consciousness. Existence is primary, Rand is in print, and hysteria over 'attacks' and 'misrepresentations' is so much primacy of consciousness metaphysics. A long as you state your disagreement when nonsense is spoken in your presence, you've committed no sanction. It is not some duty to find and destroy every misrepresentation or 'faulty premise' in the world. You have to trust people to have minds and to be able to use them without your persistent training wheels.

We see the rationalist type continuously and voluminously attack living people and claim that they are 'defending Rand'. But isn't this ludicrous? Rand is dead. She has left behind works that are immortal. The works themselves are the property of the copyright holder. What information and concepts and clear thinking those works contain are not 'Rand's ideas' anymore. She is the discoverer of OUR ideas. You and I are here, now, on this earth. We are thinking and doing. We are the recipients of a grand inheritance, yes, but the man who inherits a million dollar estate does not go through life forever afterwards referring to his 'father's money'. WE are the existents, now. WE are the minds. Rand is the beloved and venerated discoverer and codifier of the ideas we hold, and we should never try to pass ourselves off as the discover of her system. But-- she is beyond harm or help now, she has no more battles to fight, cannot be hurt, cannot be offended, cannot be injured in the slightest. As long as Atlas and The Fountainhead and everything else are in print, her life's work is safe from anyone on earth -- from the Brandens or Kelley or Rachel Maddow. She is beyond their reach. We cannot perpetually act as if we stand over a sickbed, protecting the helpless invalid. Rand would despise being thought of that way. She is a giant, and always will be. But she is a historical figure now.

We cannot act irrationally in defense of a great advocate for reason.

To love Rand is to love someone who no longer exists, except in record and in her works. To love her work is memorial enough.  Is it important to leave a clear and unbiased record of her life and an honest biography? Yes. But not for her sake. She's not here. I wish she were but she's not. It is a religion that would act in this manner, as if its founder were just temporarily absent and still watched our doings. Rand is not the ever-living prophet who will return at the end of days. She does not watch us from the halls of Asgard. She will not judge the living and the dead. Let her go.

It is far more important that we treat each other -- the actual living beings who are on this earth right now-- with the utmost respect for justice, with consideration towards context, with fairness, reasonableness, forbearance. Toleration? Yes, towards any interpretation of Objectivism held honestly and with openness to questioning, and towards anyone who claims to have identified new applications or, yes, errors in the philosophy. Being reality-focused requires that we correct mistakes in the Randian framework, if such exist. Only rationalism demands that we defend every jot and riddle she ever wrote or spoke. A change in Objectivist thought is not a change in Objectivism. Objectivism will always exist. See my argument in Part Two. But if an error is identified, shouldn't we identify it and change our consensus going forward? Is that not the rational response? Would it be better to perpetuate error and live with a falsehood?

I hear the Schism-Minded among us shout "Show me Rand's errors, then!" That's not the purpose of this post. The purpose of this post is to say that not all of us will agree, and that's wonderful. The more disagreements we have amongst each other the better, if we are open and courteous and brave and curious and rational and we create an environment where any trial balloon can raise and be shot down without the originator being shot as well, that is an appropriate atmosphere for intellectual life-- not rigidity, not fearfulness, not resentment, not anger.

FACTIONALISM
Objectivism should have no leaders and, certainly, no followers. Properly, if we take the philosophy seriously, we should be a fellowship of sovereign minds. What does that mean? It means that each of us speaks for himself and himself only, that each of us is responsible for defending the contents of our own consciousness, for backing up our own words, for standing on our own two feet, unafraid, and giving our own first-handed view of existence. No man is under any obligation to defend the ideas of anyone else-- unless he has voluntarily chosen to do so-- and certainly no one is responsible for the ideas of others. If a man speaks nonsense, that is his own responsibility. It does not redound to the detriment of his associates or family or friends or lovers. There is no such thing as a collective foolishness, any more than there is a collective wisdom.

A faction should never exist in Objectivism, because we should each be a faction of one. The smallest minority on earth is the individual? So is the smallest faction. As the schism-minded go merrily chopping away, they are in a sense doing away with their own faction -- splintering off all their allies, creating nothing but enemies until they stand alone in their own personal rectitude as they should have from the start. The existence of factions in Objectivism is evidence of a grave error in the community. I am tempted to say a grave error on the part off 'our leadership', but that is itself the kind of thinking that is ruining us. An intellectual movement has no leadership. If you are led, then you may be many things but an intellectual--a sovereign mind--you are not. There are properly no Objectivist leaders, only individual Objectivists who hold differing degrees of credibility, based on their works and behavior over time.

But we do have factions, and that is a shame and an embarrassment. Where do they come from?  A faction generally coalesces around an individual. Some person puts themselves forward as a thought leader or expert--rightly or wrongly--and a faction forms around the person and his or her ideas. To the Schism-Minded, these people become Sub-Rands or Randian Satellites-- beings with their own gravitational pull. The person at the center of a faction becomes the organizing center of gravity around which some subset of thinkers orbit.

Not all groups are factions. Mere groups might form around a person from a recognition of merit, or from their attractive personality, or from some display of virtue or bravery, or from a personal connection to Rand, or from all of these or some other quality. A gorgeous Objectivist female might find herself the center of a bevy of young men -- but is that a faction? No. These are mere circles, cliques. Objectivism will always have these, because people differ in their attractiveness and charisma and their preferences in a companion.

To be a faction, your group must be delineated by some intellectual position, some specific and usually non-negotiable conviction or interpretation. Early Christians, for example, divided into one faction of Jews practicing strict adherence to Old Testament law, and another that was open to Gentiles and eschewed any demand for circumcision or kosher-ness. (Note, by the way, who won that argument historically. Which evaporated and which took over the world? The more open faction gained adherents and the narrower faction fell into obscurity). Why do factions break away? Because they cannot reconcile some disagreement. In the case of the Christians, there could be no logical resolution, since both factions were arguing articles of faith not open to question.

But a philosophical community that teaches "Let reality be the final arbiter" should not descend into factionalism, should it? Surely there is a rationally demonstrable answer to whatever issue threatens to divide us. Contradictions do not exist. Reality is knowable, so why should we give up and go to our respective corners, never resolving our differences?

PEIKOFF AND KELLEY
What are the Objectivist factions? The biggest are, of course, those factions centered on Leonard Peikoff and David Kelley.

The origin of this schism in Objectivism lies in the disagreement of those two thinkers on the subject of toleration, associations, ideological precision, etc. I see no reason why the solutions to those disagreements should not be, in principle, discoverable. I would rather say that if neither man has put forth a proposition that rationally convinces the other, then in all likelihood BOTH are in error. Properly, then, they should get together to collaborate and re-examine the issue, excited that they are both so committed to truth, ready to throw themselves into experiments and bicker across a blackboard until they have their eureka moment and, arm in arm, emerge as great thinkers who have conquered a thorny problem to their mutual satisfaction.

What stops the leaders of these two factions from coming together in this manner? Bad blood, spite, personal dislike, hurt feelings, anger, dismissal, scorn, contempt -- i.e., a whole host of nasty emotions. That's it, so far as those of us in the cheap seats can tell.

Two men who engage in a personal vendetta for so many years should be, frankly, dismissed as exemplars of any sort. When men act as adults, they find common ground and work to resolve their differences. Only when men act like children do they take their marbles and go home, rather than look for a solution -- especially when so many people's lives are impacted by the repercussions of the split and so much vitriol is spewed by one side or the other. I say a pox on both their factions, to the degree that they perpetuate this feud a day longer and do not look to heal it at once, even if it is to step aside from a leadership role altogether and cede the field to the other or to no one, which is likely the best resolution.

But how great it would be-- how proud we would feel-- how much Joy would there be in Mudville-- if those faction leaders met, shook hands, and went to work-- starting from scratch to re-examine both their positions, each trusting the motives of the other. What a great way to cap their careers, even if they came to the exact same impasse -- to try and resolve this schism as philosophers, face to face, not as faction leaders via squabbling proxies.

SANCTIONING BY SANCTIONING
Someone in back just yelled: "But to sit down with Kelley (or Piekoff) would be to sanction them!!!"

And there it is: "sanction", that deadly word at the root of Objectivist factionalism.

What is it, anyway? Let's take a little break to visit the Ayn Rand lexicon
http://aynrandlexicon.com/lexicon/sanction.html

Let's use the first definition: "To discuss evil in a manner implying neutrality, is to sanction it."

Now we have to parse it. What is 'Evil'?
From Galt's speech: "Evil is the irrational, the blind, the anti-real—and that the only weapon of its triumph is the willingness of the good to serve it."

So, you could say that to sanction is to "adopt a position of neutrality towards someone or something you know to be irrational or destructive." Fair enough?

So-- if we disagree about something, how do I supposedly sanction your evil position if I sit down to argue with you? Engaging you on the battlefield of ideas is hardly "adopting a position of neutrality".

I hold that many acts of Objectivist self-defeat are acts of "sanctioning by sanctioning." For example, a man goes to a debate group, discovers it is largely populated by a different faction, and abandons the group-- proclaiming that to have associated with those people would have been to sanction them. But this is actually the complete reversal of the concept. By ceding the intellectual field, you have committed sanction. By walking away, you have abandoned the debate, ensured that your position goes unheard, ensured that (presumably) error will win the day. You have ensured that no third party will have heard an opposing viewpoint at that meeting. You have quit in the face of an intellectual challenge and have retreated. You're not even stepping out of danger to wage guerrilla attacks a la George Washington's campaign. You're keeping your hands clean, returning to Mt. Vernon, and sipping something cool on the porch while others go out and risk sanctioning the redcoats by battling with them. Who is the sanctioner? Who?

And, worse, what if you give your army the same order -- not only cede your leadership role in the battle of ideas, but tell your entire army not to ever face the enemy, not in person? What if you declare that you don't intend to win the war, don't intend to prosecute it, and cannot possibly sanction the British by sitting down with them to negotiate either their surrender or your own? What if you start kicking troops out of the Continental Army because you saw them waging their own little war on the fields of Yorktown? How dare they be seen on the same grass as Cornwallis!

This is absurd, of course, and I'm making it absurd on purpose. The whole argument that one is preserving one's purity by not engaging the enemy strikes me as pernicious and self-defeating nonsense. That sort of thinking is the real and terrible sanctioning going on in Objectivist circles.

Associating with a Communist is not a sanction of Communism if your motive for initiating the association is to change his Communist ideas. Associating with a socialist is not sanction if the purpose of the association is to undercut his certainty about socialist theory. Associating with a follower of David Kelley is not sanction if the motivation of the association is to indulge curiosity, discover first-hand facts, or to simply socialize by setting aside a technical issue in philosophy that divides you -- each clearly stating his disagreement-- and working together on the things that you have in common.

The commonly-held false view of sanction is, in practice, leading to constant acts of sanction-by-omission, daily situations where some Objectivist is AWOL when he should have been in the fray. Every time you turned down an opportunity to counterbalance your intellectual opposition by raising your voice aside your ideological foe as contrast was an act of sanction, at least if your stated purpose is to educate, spread good ideas, and defeat bad ones.

To repeat: The real sanction is staying home.


A SAD EXPERIENCE
The Schism-Minded are not merely mistaken, unfortunately. They are not all misguided souls who do not understand sanction, or who are fighting the battles of the past. There is a darker and far worse aspect to this subset of Objectivists.

Now we get ugly.

Let me tell you a story.

As I said above, I've read a lot of authors on Rand. One of these was Chris Sciabarra, whose book "The Russian Radical" i picked up, I guess, twenty years ago. It was interesting, but didn't impact my thinking much.

Years later, when I'd joined Facebook, I saw a notice from some acquaintance along the lines of "Chris Sciabarra is sick. We are spreading the word in order to get some donations". I shook my head and tsk-tsked at this, not being a personal friend of the guy and not knowing or caring about his faction or reputation, of which I was ignorant. I recognized the name as a writer on Rand, and so re-posted the donations request "FYI" to anyone in my circle who might want to know the information. I didn't even donate myself -- struggling artist and all-- but I thought I might as well pass the info along to others, right?

Wrong.

I was immediately subjected to a purge by the self-appointed defenders of Objectivism. Behind my back, and without a one of them speaking to me or asking a single question, the word went forth that Richard Gleaves was in league with Sciabarra of the Atlas Society, had committed a terrible act of sanction. "Anyone who is friends with Richard must defriend me immediately!" the cry went forth and, by the time I even knew anything was happening, I had a black mark on my reputation and was the subject of condemnation by strangers.

This is an awfully strange behavior, and it took me a long time to understand what I was seeing.

The leader of this attack, who I won't name, contacted me privately and said he would withdraw his accusations if I proved to him I was not friends with Sciabarra, had not sanctioned the Atlas Society, if I were sufficiently deferential to Peikoff etc.

And then I realized -- and this is the root of the ugliness that is the schism-minded Objectivist.

He wanted my sanction.

It was he who was looking for me to sanction him, not the other way around. He wanted me to jump though his hoops, to justify myself to him, to accept his right to judge me, to accept his right to pass a verdict, to accept his stature in the pantheon of Objectivists. That was the psychological motive and what made the whole affair so repellent.

The Schism-Minded Objectivist needs to create victims, because he needs their sanction and the sanction of his peers to feel big and important. In our world of fractured factions, this has become the coin of the realm. People rise in Objectivism, not by virtue of their commanding intellect, but by PULL. Our leaders have become pull-peddlers, trading access for obedience, and their foot soldiers attempt to climb the ladder by stepping on the heads of others, by establishing their herd dominance, by pushing someone down and then asking them to grovel and sanction the attack.

And, if this is the evil going on in our movement, Rand herself has given us the concepts and the means to end it.

It is the VICTIMS of this practice who must withdraw their sanction. If someone attacks your associations, tell them "I do not recognize your right to speak on behalf of Objectivism." "I don't accept your right to tell me who I should associate with." "I do not recognize you as an Objectivist or an Objectivist leader."

Nothing else will end this. Not unless every person who objects to the behavior recognizes their own right to exist, their own right to choose their own associates, to blaze their own intellectual path.

They WANT you to cower, to justify yourself, to acknowledge them, to fear them. They are second-handers trying to splash the community in the hope that the ripples will push them closer to the centers of power. Do not give them that ripple. Don't quaver, don't quail. Tell them where to go, and why. Tell them what they're doing and why they're wrong. Tell them what I tell you now.

An Objectivist's concern is the conquest of nature. A parasite's concern is the conquest of men.

Then forget them and start over. Put the past aside, associate with whomever you like, and start building tomorrow. Or to put it more poetically and positively, paraphrasing Badger Clark:

The sunrise plains are a tender haze
And the sunset seas are gray,
But I stand here, where the bright skies blaze
Over me and the big today.
What good to me is a vague “maybe”
Or a mournful “might have been,”
For the sun wheels swift from morn to morn
And Objectivism began when I was born
And the world is mine to win.


Good premises.









Thursday, February 14, 2013

The Dinner Roll, by Richard Gleaves



Note: This parable of mine in praise of property rights has, ironically, been reprinted without attribution all over the web. It's now been read by millions and pops up regularly as e-mail spam etc. Here it is in its original form.



DINNER AT THE WHITE HOUSE by Richard Gleaves
Once upon a time, I was invited to the White House for a private dinner with the President. I am a respected businessman, with a factory that produces memory chips for computers and portable electronics. There was some talk that my industry was being scrutinized by the administration, but I paid it no mind. I live in a free country. There's nothing that the government can do to me if I've broken no laws. My wealth was earned honestly, and an invitation to dinner with an American President is an honor.

I checked my coat, was greeted by the Chief of Staff, and joined the President in a yellow dining room. We sat across from each other at a table draped in white linen. The Great Seal was embossed on the china. Uniformed staff served our dinner.

The meal was served, and I was startled when my waiter suddenly reached out, plucked a dinner roll off my plate, and began nibbling it as he walked back to the kitchen.

"Sorry about that," said the President. "Andrew is very hungry."

"I don't appreciate..." I began, but as I looked into the calm brown eyes across from me, I felt immediately guilty and petty. It was just a dinner roll. "Of course," I concluded, and reached for my glass. Before I could, however, another waiter reached forward, took the glass away and swallowed the wine in a single gulp.

"And his brother Eric is very thirsty." said the President.

I didn't say anything. The President is testing my compassion, I thought. I will play along. I don't want to seem unkind.

My plate was whisked away before I had tasted a bite.

"Eric's children are also quite hungry."

With a lurch, I crashed to the floor. My chair had been pulled out from under me. I stood, brushing myself off angrily, and watched as it was carried from the room.

"And their grandmother can't stand for long."

I excused myself, smiling outwardly, but inside feeling like a fool. Obviously I had been invited to the White House to be sport for some game. I reached for my coat, to find that it had been taken. I turned back to the President.

"Their grandfather doesn't like the cold."

I wanted to shout- that was my coat! But again, I looked at the placid smiling face of my host and decided I was being a poor sport. I spread my hands helplessly and chuckled. Then I felt my hip pocket and realized my wallet was gone. I excused myself and walked to a phone on an elegant side table. I learned shortly that my credit cards had been maxed out, my bank accounts emptied, my retirement and equity portfolios had vanished, and my wife had been thrown out of our home. Apparently, the waiters and their families were moving in. The President hadn't moved or spoken as I learned all this, but finally I lowered the phone into its cradle and turned to face him.

"Andrew's whole family has made bad financial decisions. They haven't planned for retirement, and they need a house. They recently defaulted on a subprime mortgage. I told them they could have your home. They need it more than you do."

My hands were shaking. I felt faint. I stumbled back to the table and knelt on the floor. The President cheerfully cut his meat, ate his steak and drank his wine. I lowered my eyes and stared at the small grey circles on the tablecloth that were water drops.

"By the way," He added, "I have just signed an Executive Order nationalizing your factories. I'm firing you as head of your business. I'll be operating the firm now for the benefit of all mankind. There's a whole bunch of Erics and Andrews out there and they can't come to you for jobs groveling like beggars."

I looked up. The President dropped his spoon into the empty ramekin which had been his creme brulee. He drained the last drops of his wine. As the table was cleared, he lit a cigarette and leaned back in his chair. He stared at me. I clung to the edge of the table as if were a ledge and I were a man hanging over an abyss. I thought of the years behind me, of the life I had lived. The life I had earned with a lifetime of work, risk and struggle. Why was I punished? How had I allowed it to be taken? What game had I played and lost? I looked across the table and noticed with some surprise that there was no game board between us.

What had I done wrong?

As if answering the unspoken thought, the President suddenly cocked his head, locked his empty eyes to mine, and bared a million teeth, chuckling wryly as he folded his hands.

"You should have stopped me at the dinner roll," he said.


Copyright May 31st, 2009 by Richard Gleaves



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A Trail of Breadcrumbs: The Resignation of Pope Benedict and the Great Financial Collapse


On Tuesday, February 12th, Pope Benedict  XVI shocked the world and his congregation with news that he was resigning the papacy; this is entirely unprecedented in the modern age. The last pope to resign, Gregory XII, did so only to solve a dilemma of leadership in the church. That was 600 years ago, and it hasn’t happened since. Every pope in 600 years has died in the arms of the church.

But not this pope. Regardless of what you believe, it is hard to fathom how, within the Catholic framework, he can justify rejecting the papacy theologically or practically. Despite the advantages of medical care and luxury, despite the prospect of remaining servant of God and meeting his creator as pope, he is rejecting his position in relation to God and walking away.

When something extraordinary happens, one must look for extraordinary circumstances. I think I can explain this sudden resignation, if the reader is prepared to follow a trail of breadcrumbs, link after link in a chain that connects five men. This is not a chain of five conspirators, necessarily, but is intended to show the links between our politics, our financial gurus, and our religious leaders.



First, Barack Obama. The president is bent on running the national debt to its limit. He is pushing to eliminate the debt ceiling, and calling for chump-change revenue while the government wastes trillions pouring cash down sinkhole after sinkhole of boondoggles, swindles and schemes. Every move he makes promises a parabolic curve of rising debt. Why? There are three opinions. Firstly, it is possible that he believes increased spending is the way to save the economy; perhaps his advisors have told him that the depressionary forces of the market must be countered by an inflationary monetary policy or else the economy will collapse. The second possibility is that he knows a collapse is inevitable and is buying time, either for noble motives (sparing Americans the pain in the hope that some last minute save appears) or venal (a shopping spree of spending while the reserve status makes it possible, to secure his constituency and reward his cronies). The third opinion is more sinister. Could Obama be running up the debt to cause the collapse? Who would stand to benefit? And what would happen afterwards? It is difficult to believe that this is the case. How would the man look in the mirror?

http://www.nytimes.com/2013/02/08/opinion/krugman-kick-that-can.html
The second link is Paul Volcker. Volcker is former chairman of the Federal Reserve. He knows the dangers of monetary inflation, having fought back the post-Nixon Shock inflationary wave of the 70s. He was Obama’s advisor on the financial crisis until January, 21st 2011. On that date, he resigned his position, ceding it to G.E. CEO Jeffrey Immelt. What had he been working on in his last months? In September 2010, a self-appointed group convened at the grand Palais-Royal in Paris for what became known as the Palais-Royal Initiative. These men were former central bankers from around the world, acting (we are told) on their own. The group was assembled by Tommaso Padoa-Schioppa, an Italian banker considered to be the “Father of the Euro”. (He is also adored by George Soros, who named his own Euro-solution the “Padoa-Schioppa plan”) The purpose of the Palais-Royal initiative? To create a framework for the next phase of monetary policy.

On December 18th, just before the penultimate meeting of the group, Padoa-Schioppa died, and the third man in our trail of breadcrumbs appears. The new leader of the Palais-Royal group: Michel Camdessus, French economist and former Managing Director of the IMF.  The group came to its conclusion. The report of the Palais-Royal Initiative, issued in January of 2011 (and revised the next month) calls for the creation of a supranational banking power, outside the control of any government, which would issue the global reserve currency in the form of SDRs, a unit of account created at Bretton Woods in 1944. Essentially, Camdessus’ old colleagues at the IMF (and the Bank of International Settlements) want to take over international finance. We can't blame them for trying, right? Camdessus presented the document to French President Sarkozy, and the report was disseminated on October 5th, 2011 among the papers of the G-20, appearing on the abstract as a paper written specifically for the G-20.


http://www.global-currencies.org/smi/gb/telechar/news/Rapport_Camdessus-integral.pdf




One may well imagine the response to this paper: "This new banking takeover might work, Monsieur Camdessus, but is it right? Is it moral?" And now the Vatican comes in. We come to our fourth name, that of Cardinal Peter Turkson. Turkson is president of the Pontifical Council for Justice and Peace. On October 23rd, 2011 (18 days after the G-20 presentation) the Pontifical Council for Justice and Peace surprised many by coming out with a proposal that damned “the idolatry of the market” and called for a supranational banking authority identical to the one recommended by the Palais-Royal group. What are the chances? Coincidence? Not when you look on the list of advisors to the Council. There among the names is Michel Camdessus.

http://www.justpax.it/pcgp/eng/membri.html




And so we come to the last name on our list, full circle to Pope Benedict XVI. Why is he stepping down so unexpectedly? The answer is to be found, I believe, in the name of the man considered to have the best odds of being our next pope: Cardinal Peter Turkson. According to the Pope’s own brother, Benedict is tormented by the “Vatileaks” scandal, involving leaked Vatican documents indicating money laundering and corruption. This is not to say that Benedict himself is implicated, but he may well be resigning to protect the church, as acquiescence to someone’s threat to release more. Who would possess such documents? The financiers who are on the opposite side of the Vatican trades, naturally. Those financiers who want a new pope in power: Peter Turkson, who is fully on board, and who will declare the IMF schemes to be moral and just when the time comes, a man who is unassailable due to his skin color, who will be commanding the obedience of 1.2 billion Catholics.

If there is any truth to these speculations, whether you believe in a divinity or you don’t, I think you can appreciate and share the sentiment: God help us all.

Sunday, February 19, 2012

The Good Objectivist - Part Two

OBJECTIVISTS TOGETHER

Within the Objectivist movement, like any movement, we have a wide and diverse range of opinions. That is to be expected. Man is not omniscient, knowledge is not automatic, and we have free will.

But from the way some of us negotiate our differences of opinion, a newcomer might imagine that Objectivism teaches that man is omniscient, that knowledge is automatic, and that one's free will is to be relinquished to authority.

This has to change.

Once the new Objectivist has escaped mine fields like the materialist and spiritualist creeds of his youth, and climbed over the barbed wire of his first experiences with Objectivists, he may imagine himself finally in a sunlit field of non-contradiction and rational interaction. In large part, this is the case. Once a person has grown into the philosophy to a certain degree he can relax. Once a certain general understanding is achieved, he starts to meet all kinds of fantastic, wonderful people.

And we are fantastic. Really. I do not mean these posts to be an indictment of all Objectivists, or even of most. We are friendly, thoughtful, morally conscientious, kind and loving. We work hard, have great lives, and work to stop the evil in this world. A man can get used to basking in the sunlight of this sort of community, and feel free, finally, from intellectual mine fields and barbed wire.

But over time, he learns that there is another danger.

Some things are radioactive.

There are a handful of issues over which Objectivists can easily clash and break with each other. People try to avoid them, paper them over or compromise on them, but inevitably they are asked to choose sides, and are often vehemently denounced if their view differs from what is expected of them.

Let's examine five of these issues and see if we can find a common thread.

#1) What is Objectivism?
#2) Who speaks for / owns Objectivism?
#3) Who is an Objectivist?
#4) Who can an Objectivist work with?
#5) Do you work with/admire/tolerate/know a particular individual?

Hmm -- A lot of this seems to be about intellectual territory. Territorialism, Authority, and Group Loyalty.  Ew. Not pretty.


Before I delve into these let me put on my hazmat suit to protect myself from radiation. This should be unnecessary, but this is what we're driven to:
"I, Richard Gleaves, do solemnly swear on a stack of first edition signed copies of Atlas Shrugged that I do not sanction the work of David Kelly or any member of The Objectivist Center. I do not have dealings with Nathaniel or Barbara Branden, and I recognize they have engaged in unjust actions against Ayn Rand. In addition to these, Appendix A contains a notarized list of personalities, positions, and organizations that I renounce. This is to be considered my position in all matters, public and private, and no sanction of the works of any other individual is to be implied by my writings below, which I hereby affirm are my own independently arrived conclusions. (Signature on file.)"
Did that seem kind of silly to you? It does to me too. It's nonsense. Worse than nonsense. It's pernicious and vacuous nonsense. But that is, in spirit, what we're demanding of each other in the name of free and open inquiry, a love of reason, and intellectual independence.

Let's examine the issues I raised above, and why they are radioactive.

Ayn Rand
#1 "What is Objectivism"?
This should not be an issue to any reasonable person. 

Objectivism is the philosophy of Ayn Rand (conceptually)
& Objectivism is the writings of Ayn Rand (concretely).

Objectivism is a human construct, an ideology that Rand devised, articulated, and codified into a code of values and virtues.

Because life is conditional, a code of some sort is necessary to anyone who chooses to live. But: Rand's code is not "in reality"-- there is no "Objectivism" out there Platonically in the physical world which she discovered fully-formed like a new continent. Objectivism  is a sequence of logical conclusions reached from the study of reality; i.e., from the study of man, the facts of his nature, and the requirements of his life. This is important to remember-- that Objectivism is not metaphysically given. It is (wo)man-made.

Which means: In any conflict between Objectivism and reality, by the very principles of Objectivism you have to choose reality. Reality is always primary.

The philosophy was devised and concretized by Rand, promulgated by her associate Nathaniel Branden in the 1960s, and systematized by Rand's heir Leonard Piekoff after her death. But, even if approved by Rand, secondary works are only studies of her thought, not her thought itself. Nothing written by any other person except Ayn Rand should be properly considered "Objectivism". 

However, all writings or commentary by others (derivative of her work and achievement) may be granted the modifier "ObjectivIST" if they are reasonable interpretations, i.e. develop new implications that do not evade fundamentals of Rand's thought, something each individual mind must decide for himself. "Objectivism" is a NOUN-- a thing, in this case a particular set of ideas. "Objectivist" is an ADJECTIVE-- a descriptive modifier, in this case for people and writings influenced or derivative of Rand. A strawberry is red but it is not itself "redness", if you take my meaning. 

What does this mean in practice? That Objectivism is a closed system, but Objectivist thought is an open process of discovery and application. People constantly bicker past each other on this issue, evading the difference between the system and the body of derivative works. Your derivative works can be objectivist, but they will never be Objectivism.

Why is this controversial? Two reasons. First, people don't want anybody spreading lousy ideas and passing them off as Rand's, and secondly because, frankly, Ayn Rand is an industry. Ka-ching! We're all capitalists. That's wonderful. But, truly, anyone who publishes on Rand besides Rand is not publishing ObjectivISM, no matter how much more money he can make if he convinces you it is true. Various "ObjectivIST" work may be excellent and praiseworthy, but all such work derives from an underlying wellspring with only one Fountainhead.

#2) "Who speaks for / owns Objectivism?"
This is a related question. We're all for property rights. How do we defend the rights holder of a philosophy? There's two issues here: the ideas and the writings.

NO ONE owns Objectivism qua philosophy, any more than anyone owns relativity qua physics.

As a legal and moral matter, concepts are not to be considered property. E=MC2 is Einstein's creation, but Stephen Hawking does not pay royalties when he uses it. Concepts are not property, though one must credit their discoverer. The justice owed to Rand is that she forever be recognized with gratitude for her accomplishment in the realm of ideas. But the ideas are not her property. Once you understand them and adopt them, they are your ideas-- they are the things you think and believe. All that is required of you is that you do not pass yourself off as their discoverer, any more than you pretend to be the inventor of internal combustion when you drive a car.

And what of Rand's actual writings? That is a property rights issue. As I said above, she discovered, articulated and codified the philosophy. Therefore, she owned the concrete expression of her thought (such as journals), and the final product in the form of a book. The writings were Rand's property, and she left them to her legal heir Dr. Peikoff, who has since sold dramatization rights etc. Some people have bought various documents. Some journals and preparatory writing have been donated to the Library of Congress. In the case of the novelette Anthem, the copyright has lapsed in the United States. So the answer is that Dr. Piekoff owns some Objectivism, and others own other bits. Some bits are owned by nobody. It is spread around in private and public hands.

So who speaks for Objectivism? 

I do, of course.

So do you.

#3) Who is an Objectivist?
Every writer has interpreters, starting with the first individual who reads their work. When I see someone's error, I can point to Rand's own writing and, in a sense, I am speaking for Rand. I speak for Objectivism. We all do. Hopefully every day and loudly! Some of us may command greater respect than others, but there is no authority. Any man who tells you to accept his authority on Objectivism over the evidence of your mind is ignoring the fundamental teachings of the philosophy! Every man must look and see with his own eyes and mind. This is so crucial. A man who claims to be an authority over your mind is-- by that very fact-- unfit to teach you anything. The search for authorities to be in charge of a philosophy is the fundamental error that drives cult-like thinking. So the proper answer on this issue is that we all speak for Objectivism, some with greater credibility than others.

And credibility is something which self-interest should drive each of us to weigh very carefully.

In my opinion, Leonard Peikoff has the greatest credibility to speak on Objectivism. But Objectivism allows him no authority over and above anyone else's judgement. No one can think for me, just as (in Galt's words) no pinch-hitter can live my life. No matter what a man's accomplishments, I cannot substitute his convictions for my own.

Various organizations have sprung up to promulgate and spread Rand's ideas over the years. I am partial to the Ayn Rand Institute, and I'm particularly fond of Yaron Brook there. But why do I admire people at ARI? Because they have earned it. They have earned credibility, but they are not authorities. They are intellectual vendors, and I am a satisfied customer.

This distinction is crucial to how I personally deal with other objectivist people. If someone is partial to The Atlas Society or some other group I don't agree with, I don't insist they change their view. I explain why I think their group is not credible, and that is sufficient. If they do not see it the same way I do, that neither picks my pocket nor breaks my leg (as Jefferson put it.) One can't demand loyalty. It has to be earned. I can't earn loyalty for ARI any more than I can earn fans for Peikoff-- each must do that themselves. I adore ARI, but if someone else does not adore them I merely think they are missing out on superlative value. Similarly, I admire and respect Dr. Peikoff, and if someone else does not I merely think they have failed to see the virtues and value of the man. Poor them for missing out, but I do not consider them an enemy, and I still consider them Objectivists.



#4) Who can an Objectivist work with?

My answer: anyone.

This is a question of hierarchy and context: your hierarchy of values and the context of the relationship.

If I were on fire, I would be thrilled if Nathaniel Branden came running by with a garden hose.

If my car were stalled, I would accept Barbara Branden's offer of jumper cables.

If Obama could be defeated via door-to-door canvassing in Ohio, I would march house to house with the entire membership of the Atlas Society if it would deny the president a second term.

The only question that should matter is whether you are pursuing a rational value or not, and whether the association implies sanction beyond the immediate purpose of the association. Fortunately, it is much harder to give sanction than most people suppose. To sanction ideas with which you disagree requires that the offending ideas be voiced in your presence and that you fail to register disagreement. That others hold mistaken ideas is not your concern, only whether they express them. Fortunately, I have never met an Objectivist who wasn't absolutely willing to speak up and disagree at a moment's notice, so I suspect that sanction occurs far less frequently than is supposed.


#5) Do you work with/admire/tolerate/know a particular individual?

This question is bandied about all the time in Objectivist circles, thanks to confusion on the four issues above.

Quite a few Objectivists congregate on Facebook, for example, and often the call goes out from one person or another that Miss X has been found to hold idea "Y", or that Mister Z associates with a Branden or that Mrs. Nobody must be shunned. Often this is voiced in "me or them" language: "if any of you are friends with Mr. Untouchable you can defriend me now!!"

It gets pretty annoying.

Leaving aside the peculiarities of Facebook (which labels one's acquaintances 'friend', and doesn't unfortunately allow a hierarchical division such as best friend, friend, acquaintance, all the way down to 'guy who posts those cat cartoons I like'), how should you respond if someone questions who you associate with? Is it their right? Is it rational behavior?

It is rational to judge a man by what values he holds, and friends can be a clue to a man's hierarchy of values. But they can only be a clue.

A man who adores the writings of Nathaniel Branden, David Kelly or Chris Sciabarra (or whoever) may still be a friend, if we both admire Atlas Shrugged, or share a love of Mozart or for Italian cinema. Friends share your values, but not necessarily ALL your values. What cannot be tolerated is an attack on the things you love. A friend that attacks your values may soon become an enemy. But I could be friends with a fellow Star Wars geek who hated Rand as long as he kept his antipathy to himself and didn't voice it in my presence, and no sanction of his anti-Rand ideas would be implied by the association.

It is nearly impossible for me to tell as a third person what relationship two other people have. There is a certain granularity in relationships which only those in them will understand, and it is difficult to make judgements about how close two people actually are and what has passed between them.

Does this mean a man's friends tell you nothing about him? No. But they do not tell you everything, either. So those who judge others based on associations should be very careful to exercise proper justice, and to avoid blanket assumptions. 

What to do if someone presents you with an ultimatum over an affiliation, friendship, or other association? No one can choose your friends for you, or dictate who you value. Dagny Taggart fell in love with the man who was working to destroy Taggart Transcontinental. Howard Roark loved a woman who spent each day sabotaging his commissions. If you see value in another person, pursue that value, and be prepared to defend your choice if questioned. BUT-- never throw someone over based on a secondhand reason. If you see a value in someone, that is cause enough to pursue an association, no matter what anyone else thinks.

Many Objectivists start these fights thinking they are doing good. Unfortunately, most are committing the error of imagining that the moral stature of a man is determined by the opinions held by his friends. It is tribalist/collectivist, and is as false as saying that you can judge a woman's character by the sins of her sorority sisters.


But what if it's YOU that's getting attacked, and someone is trying to destroy you or your reputation?

That is the subject of the eventual Part Three of this series: The Schism-minded Objectivist.


Thursday, March 17, 2011

The Grand Metaphor





Today, some random musings on theology.


Is it possible to create a rational theological system? Would anyone even want to? What purpose would it serve?


Sometimes I wonder if the human mind needs some sort of Grand Metaphor for understanding the world -- not philosophy, which is a practical science, but rather a sort of Poetry of Existence, the contemplation of which makes simpler the nature of life.


Sometimes, I refer to a Grand Metaphor of my own. Let me share it. It's a sort of rational deism, and is open to anyone who observes existence.


What was at the beginning of the universe? There's no way to know. Perhaps the big bang is the beginning, perhaps we live in a daughter universe embedded in a vast cosmos of prior universes -- and perhaps our universe will give birth to children of its own. We have no way of knowing. But it stands to reason that somewhere in the distant reaches of time was the first entity. Some might call it God, but it is a mistake to anthropomorphize it. We cannot ascribe any mind to it, or any purpose to it. It didn't have a personality or a plan. We are most likely talking about an inanimate subatomic string -- the first thing that wove itself from nothing; the first entity that was and from which the rest follows. I'm not talking about a subjective consciousness at the root of existence, I'm talking about an objective Thing. Whatever the first thing was, it was.



I think of it as a creative particle.


Metaphorically, this particle, the first individual anything, is the prime mover of all that came after. Think of the burst of creation that followed. The story of the universe is the story of a creative individual -- coming into existence, and blazing forth in glory and unending invention. The invention is not willed -- like I said, there's no way to assume a plan to it --but as a metaphor for contemplation I find it satisfying to think that the universe owes its magnificence to the first thing that Was: the Fountainhead, if you will. The first entity with identity, the first that expressed causality.



Why bother with all this mumbo-jumbo? After all, that first thing was at the very least billions of years ago -- it isn't around to look at and it doesn't pass down laws of morality.

But doesn't it?


Ethics flows from the nature of existence. If the good is to exist as the kind of thing you are, to preserve ones self and live by production -- isn't that the very likeness of the God I'm speaking of?


And evil -- if evil is to pursue death, and if the death of the individual comes when it is subsumed into some collective mass -- isn't that the very image of the universe as well? Isn't the life of the universe one of outward motion, of endless particularization? And doesn't destruction for the universe consist of a falling in -- a black hole in which every existent is collectivized into a common death?


To live as one with the universe is to live in its image -- as a creative individual entity expanding through its life -- creating, producing, existing and, through motion, staying aloft against the pull of inertia and conformity -- defying the gravity of the mass and the cold death of uniformity.


That is a metaphor I find deeply satisfying, and one which even gives me some small comfort when I think of the end of my life. Even the universe will end, someday, when it exhausts its creative potential and draws itself into quietude.


How nice to know that it and I are in this together.









Saturday, January 29, 2011

The Christian Nation

More and more, commentators like Glenn Beck and politicians like Newt Gingrich invoke the sentiment that America is a "Christian Nation". This is an unusual concept for those of us who revere the founders, because their writings contain lines such as this one:

[T]he Government of the United States of America is not, in any sense, founded on the Christian religion - Treaty of Tripoli
So who are we to believe? Socialist Progressives surely fight the idea of a Christian Founding, and Conservatives seem hell-bent to push the idea at every turn. There are thousands of articles, blogs and discussions on the web pro- and con- about the historical validity of the question. Both sides quote particular founders out of context to push their side of the agenda. Neither side budges an inch. I'm no historian, and neither are most Americans. So what's the answer?

I think we're going about the question wrong. It is impossible and non-objective to try and gauge the personal convictions of men who lived 200 years ago. Even if their letters were replete with paeans to mysticism (which they aren't) it would tell us nothing about their true motivations. Trying to argue this point historically is not going to convince anyone, I'm afraid. We need to take a different approach.

First we need to ask-- IF America were a Christian Nation, what would that mean? Why is it an important question at all?

How do we define a "Christian Nation"?

Is it a nation composed primarily of Christians? If so, Italy is certainly a far more Christian nation than the US. The United States is about 78% Christian, if you believe the polls. Italy is 93%. Panama is 99%. Mexico is 95%. So does the "Christianity" of a nation dependent on its demographics? If so, then this "Christian nation" idea is nothing more than tribalism and racism. It says, essentially, that no matter the form of the government-- whether it be a monarchy, a republic, a theocracy, or a dictatorship-- if that nation is composed primarily of Judeo-Christian peoples then that nation is "Christian". By this standard, in world history we have seen many bloody and murderous "Christian nations" that none of us would want to live in. Israel creates much of its own troubles by being a tribalist country-- insisting on its own "Jewishness" when all that is required is that Israel be a nation that protects all citizens equally. But the tribal or racist standard is corrupt and pernicious wherever it's applied. And if this is a numbers game, I cannot imagine that Conservatives see America as being of lesser moral credit and stature as Hugo Chavez' Venezuela, which is 98% Christian. So we must conclude that a "Christian Nation" is to mean something else in this context besides a mere numbers game.

So, do we define a "Christian nation" as being "founded on Christian principles"? Okay. Which principles are those and what does it mean? First, let's define "Christian principles" as all that which was taught or preached by Jesus in his ministry. Is that not broad enough? Okay-- let's say it is all that was taught by Jesus, his disciples, the church fathers, the Catholic Church, the Protestant churches, and every other denomination of Christianity prior to 1776.

Here is the Sermon on the Mount. I think it may be considered representative of the best Jesus' teachings:
http://bible.oremus.org/?ql=91693103

Where will anyone read within this a doctrine of individual rights, separation of powers, a bicameral legislature, ANY of the distinctive features of the American political system?

The Pump and Dump

Where money is concerned, men are widely irrational. They fear to lose it, and they fear to gain it, they fear to have less than the man next to them, and they fear to have more -- lest they become a victim of theft or fraud. Ironically, it is these irrational fears and hungers that make markets so very easy to manipulate and which account for most of the losses people suffer in business. Blinded by fear or irrational greed, people make mistakes and get duped. Whether it is the con man who claims to have an inside scoop or the Nigerian prince on the Internet, scammers count on your desire for the unearned and your fear of loss. They know how to manipulate you.

Manipulation is practically the only game on Wall Street these days. As the 60s generation comes to uncontested power and the last vestiges of the 50s wane, a rash of irresponsibility and fraud has enveloped our financial world. As the generation of Father Knows Best rides off into the sunset, the generation of Woodstock smashes and grabs for immediate gratification without consideration of the future.

Easy money is the name of the game, and this mentality extends to the very top of our economic and political power structure.

I believe we are witnessing the biggest heist in human history. When we read stories of Quantitative Easing, inflationary and deflationary fears, bank bailouts, deficits, fiscal reform, World Bank, IMF, G20, Keyesianism, commodities pricing, etc we throw up our hands in confusion and bewilderment-- too intimidated by the arcane complexities of credit default swaps and derivative markets to form certain opinions or make decisions about the future. What the hell is going on? We can sense it's phony and someone somewhere is pulling the strings, but we have no legend for the map, no key to make sense of it, no Rosetta stone to translate the business page into plain english.

Unless we know where to look.

As I've written earlier in this blog, I have been trying to understand the financial collapse and the subsequent actions of the government. I fear a dollar collapse in the future. But I too have had trouble understanding exactly what our officials are up to until recently-- now I have a theory as to what's going on.

There are very few ways, really, to manipulate a market. You can buy low and then drive a financial instrument up in price, or take a short position on something and drive it down. That's really it. All profits are made on the differences in value you can predict or generate. In the small-cap penny stocks, manipulators have been at it for decades-- spreading rumors to drive a stock up, and then unloading it to the investors that buy on the rumor. The smart money is in the know, gets out early, and pockets profits. The dumb money comes in last, and is left holding the bag.

Understanding this dynamic, the dynamic of penny stock manipulation, is the Rosetta stone to understanding the magnificent heist going on at the national level.

Our Fed policy is indistinguishable from a pump and dump scheme.


Let's first look at how a pump works.

IMAGINARY COMPANY: EXCELSIOR OIL (EXCO)


#1) THE COMPANY
Let's say you want to rip people off with a pump and dump scheme. You first need a company. Not to say that you need actual production-- all you really need is a name, an address, and proper paperwork (preferably spread across several jurisdictions just in case-- Las Vegas and Delaware are popular.) For the purposes of this discussion, let's say you create the imaginary company of Excelsior Oil. You might give your company some assets, maybe legitimately purchase a few oil leases. Maybe you get the rights to some experimental drilling equipment. Or maybe it's all a fiction and the company headquarters is your Mom's basement. Doesn't matter, as long as people believe in it.

#2) THE STOCK
SEC regulations are very lax. You can get your "company" publicly traded with no trouble. You may have reporting requirements etc, but these can be evaded or you can meet the basic requirements with bookkeeping tricks etc. No one really bothers to check financials anymore. Let's say you get 100million common shares issued publicly-- to be traded as EXCO on the largely unregulated Pink Sheet market. BUT-- at the same time you also issue your officers another stock EXCR which are "restricted" shares convertible at their discretion. You have to report these, but very few people in the general public will know what's up and what to look for-- even if they pull copies of your SEC filings. These EXCR shares are key.

#3) THE IPO
So you offer your shares on the market, and let's say you sell them at .01 apiece. If you sell all 100 million shares of EXCO, you've immediately made a capitalization of $1 million dollars for your troubles (usually it's far less, but I'm using round numbers). What happens then? Well, ordinarily you would be expected to start showing profits, production, earnings etc but remember you're not really going to drill those wells -- you're a stock manipulator not a real company. Remember EXCR? You convert those shares and create another 100million common stock EXCO, releasing those secretly to your insiders. Maybe the public holders see a sudden dip, maybe not.

#4) THE PUMP
Now it's time to make money. You take your 1 million and go to a shady market maker-- they certainly exist-- and arrange for him to pump the stock. Such firms are expert price manipulators. They can drive the stock price up by colluding with others-- trading the stock back and forth to drive it higher, releasing newsletters full of exclamation points and breathless adjectives to their subscribers ("Hot new penny stock" "Fast Cash" "Don't miss out!"), releasing bogus trumped-up "news" about your eminent directors and imminent partnerships or some any-second-now breakthrough in crude production-- maybe a combo of all of these.

The shares go shooting up.

#5) THE DUMP
As new investors buy the stock, your insiders are unloading their secret shares. Maybe they sell at thirty cents, maybe forty, maybe a dollar a share-- it all depends on how good your pumper is and how much you could pay him. Your initial investors make a profit too so they don't complain unless they hold the shares too long. Because eventually your insiders have made their money. And they tell the market maker there is no need to support the price any longer. The shares crash, the people who held too long or bought at the top are wiped out. There's no one buying, volume dries up, and they are stuck with worthless shares in a worthless company which they can't pass on to anyone else.

They're called the bagholders.



Now what would those 5 steps look like at a national level?



IMAGINARY NATION: THE UNITED STATES OF AMERICA



#1) THE COMPANY
You can think of the United States as the company. It has limited production, runs entirely in the red, and has been running as a bankrupt for decades. People believe it to be strong and sound, though, which is crucial. It is unimportant for the purposes of the pump whether we're talking an economic powerhouse or a two-man operation in a basement. As long as people believe it to be a real economic entity, the stage is set.

#2) THE STOCK
What is the stock on a national level? In the US, our stock is the dollar. The Federal Reserve is printing the common stock of the United States in enormous quantities. They can do this on their own authority-- there is no SEC for them. Where is all this money going?

#3) THE IPO
Like the EXCR registered shares in the Pump above, the Fed is giving millions of shares-- largely in secret and without public accounting-- to insiders, friends, and co-conspirators. All of these dollars, though, are not allowed into the system. You can think of them sitting in Scrooge McDuck-style money bins at Goldman or JP Morgan. The banks are not loaning because to do so would increase the velocity of the money. In the pump scheme, the secret converted shares could not be immediately sold without crashing the "real" common stock market. Similarly, allowing all the secret dollars into the system would cause huge inflation and devalue everyone's holdings. So the insiders either sit on them or, more likely, they put them where they know they will be valuable-- in gold or silver.

#4) THE PUMP
But some of the new dollars do find their way into the equities markets, and the Fed's constant buying of treasuries does support the bond markets and allow for endless stimulus spending. So the economy starts to be pumped up by all this bogus money indirectly. As the market rises, you hear new voices chiming in from media outlets (Bloomberg, etc, controlled by insiders) saying the economy is getting better. Or you have a push to declare "recovery summer" on the political front. But the US is not gaining productivity. If people spent 10% more on milk than last year, you can't consider that a real increase of value if what's driven it is a 10% increase in the price thanks to inflation. The numbers will go up as prices go up, just as stocks will rise as more fake money flows into the system. It is in the insiders' and the politicians' interest to trick you into thinking you have a robust economy. It's like a trainer pumping adrenaline in the heart of a racehorse. They're not doing it for the sake of the horse, but because they have very large and precarious bets on the race.

#5) THE DUMP
Okay, there's several things to keep in mind. What is happening in the rest of the world? Because the dollar is the global reserve currency, central banks worldwide hold large positions. Think of them as fund managers holding shares of EXCO. They start realizing that they are holding shares in a pump and dump. It is in their interest to unload them. As the dollar inflates, we start to see inflationary price increases around the globe-- Egypt is rioting because of food costs. Tunisia falls. China is experiencing inflation. Everybody is. Eventually they have to dump the dollar for their own survival. And a global dump of the dollar is the crash at the end of this particular pump and dump scheme. We know that it's coming eventually. The housing bubble made it a mathematical certainty. No austerity measures can reverse this 14 trillion in debt. America will lose its credit rating and its global reserve status. Count on it.

And they are counting on you to be the bagholder.


2008: HATCHING THE SCHEME?
I believe that in 2008 when firms began falling the powers that be saw that there was no avoiding a dollar collapse. Instead, they began a pump and dump scheme to enrich the banks and the insiders. They pumped trillions more into the already inflated money supply and gave it to their friends. These banks never released the cash into circulation to create jobs. Instead, they began buying commodities. Now, with exuberance coming back to the stock market, the large banks will start to unwind their stock positions as best as they can as small-fry investors, speculators, grandmas and whiz kids start gaining confidence in stocks again. When the dollar collapse comes, it will cream the financial markets. The average American will be the bagholder. Classic pump and dump.

The insiders will have used printed dollars to buy commodities and inflation-protected assets. The politicians will have a crisis upon which they can capitalize and push more global governance and controls upon us. America will lose its standard of living, while the lot of other nations will be largely improved-- a redistributive result that is much desired in many circles. A new global reserve currency will come into effect-- either the Yuan, the Euro, or a new reserve fashioned from the IMF's SDR basket will be the new standard. Perhaps this will be called the Bancor after John Maynard Keynes' 1944 design.

As the dollar collapses globally, we will see massive hyperinflation. Banks that are unconnected to the administration will fail. The FDIC will be on the hook for deposits, requiring more money printing to cover the obligations. Failed banks will be seized by the FDIC, recapitalized by the treasury, and cronies of the administration from Goldman or Chase will be placed in charge (already happening). Food shortages will be commonplace. The responsible American with savings will be wiped out. The irresponsible will see the real value of their debts dwindle. We will be unable to maintain our empire, and the dollar will revert to a mere national currency-- no longer a global powerhouse.

People will rush to safe havens. Gold will soar, and the insiders will be further enriched.


This is, I fear, what we're dealing with. That's why they aren't making serious cuts-- they are stepping on the accelerator. A dollar collapse is coming, and they are counting on you to be the bagholder.

I hope this post helps you protect yourself, or at least gives you food for thought about the nature of the social system under which we are living.



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