"Staging" the U.S. Economy   (September 2, 2008)

Before we begin. . .
The goal here at OTM.com is make sense of the many forces at work in the U.S. and global economies--and that includes the "soft" cultural forces for which there are few meaningful metrics.

In other words, a chart can illustrate some metric of change, but it does not locate the causal factors, which are often obscure to those of us in "real time"/the present and to those with little grasp of history.

It is extraordinarily easy to fall victim to subtle efforts to "frame the debate" and massage the context of what is presented to us as "information" and "facts." We must constantly recall that "information" is not "knowledge."

Thus the goal here at OTM.com is to probe deeply precisely where the Mainstream Media is silent--large cultural/economic changes which have been obscured by either the stunning superficiality of the MSM and/or the subtle desire to avoid anything which might challenge what I call the The 3P Economy (Propaganda, Pandering, Posturing).

The "con" that is the 3PE requires "marks"--people who willingly fall for the con via greed, a desire to avoid work/sacrifice and a childish preference for denial. So the vast majority of us are complicit in the 3P economy in some way: borrowing more than was sensible, consuming more than we needed, letting the protest fall silently from our lips, voting for the same old representation, demanding little truth, and allowing ourselves to be distracted with iPods, hours of TV, trumped-up ideology wars, etc.

Some of the blogosphere seeks to render us victims of conspiracies over which we have no power. Yes, conspiracies of all sorts do exist--for what is conspiracy but collusion which must remain secret to function--but a complacent mark to go along with the con is still required. The idea here at OTM.com is to refuse the easy mantle of "victim" and stop falling for the con.

I'm making two small changes to the format: I will try to add readers' comments about each entry the following day, and then respond briefly to your comments. I am also posting a brief selection from my catalog of novels, so that you can decide for yourself if it's amateurish plonk or better-than-you-guessed entertainment.

You know how realtors "stage" a house to sell it to some unwary fool: a piano is placed over the cracked, sagging foundation (true story), wide curtains cover the windows which have been painted shut (true story), artful paintings and high-class books are set around to suggest the previous owners just returned from Majorca or Kyoto, and that you too will be an upper-crust worthy once you buy, buy, buy. (Fake scent of fresh bread in the oven is optional.)

The entire U.S. economy is as "staged" as the phoniest, most wretchedly obvious attempt to mask a home's true problems. Let's refresh our memories of how the informal but nonetheless very real Ministry of Propaganda plies its trade:

Before you scoff too heartily, consider this:

And a wry look at the reality of life for the dwindling number of reporters in MSM newspapers:

Let's run through how the MOP manipulates how we "frame the debate".

1. "The only measure of economic growth is GDP." (Statistical Lies, Government Division) And magically, GDP never goes down--so ergo, all those empty storefronts and that heating oil bill that doubled-- those don't mean squat, Jack, take it from us: the "reality" is the economy is just fine and you're whining because, well, you're a whiner.

For a super-rare flash of truth in an MSM financial magazine, check out this "opinion" piece (note it couldn't be placed in the main news section--that would have been scary): Welcome to the Frozen Economy (BusinessWeek)

2. "Housing has bottomed". (Statistical Lies, Private Division) Do ya reckon some folks are desperate to make you believe that the housing bubble bust is done, and now is the perfect, ideal time to jump in and BUY BUY BUY that first, second or third home/"investment property"? Heh. The first step of skepticism is to ask who benefits and who loses if this is in fact a con.

In the real world, the same old cons are still working: lie on your mortgage app and a sleazy broker will get you the loan (and score the fat commission) so you can stop paying your old $5K/month mortgage and buy a new house for only $2K/month: read on: the Housing Bubble Blog.

3. "I will give you a $1,000 tax break, create 5 million new jobs, stand up to Big Oil, etc." (Big Lie, election-cycle rinse/wash). The high season of pandering has begun. Candidates are proclaiming right and left that they will "stand up to Big Oil". Nice, but since "Big Oil" only controls 13% of global oil supply, then exactly how does standing up to a faltering, marginalized 13% slice of global oil accomplish anything of value?

Pander, Baby--the sky's the limit--they fall for it every time. "Compassionate conservatism"--barf. "Yes we can"--barf. Grab a $5 billion slice of "Big Oil's" obscene profits--great, you've just reduced the Federal Deficit for the year by 1%.

Amidst all these pandering giveaways--where is the money coming from to pay for it all? Hmm, never a mention of that, is there? I know, I know, tax everyone who makes more than $250K/year --and that magically creates $500 Billion? Pandering requires an audience too drugged or complacent to ask the hard questions, and so far the MSM and American public are playing right along. Just pander to me, baby, and I'll vote for you, because I want to believe that simplistic giveaway will really change my life for the better. Heh.

4. "All this innuendo is defamatory and false--our institution is fiscally sound." (Honorary Ken Lay Awards to the Management of Bear Stearns, Lehman Brothers, et al.) Posturing is the new American Perfection of Lying. Accused of taking steroids? Go on the attack, accuse everyone who doubts you of racism, character assassination, and so on, until you're busted, and then "clear the air" with a tearful confession and that good ole American tradition, the Plea for Forgiveness. Uh, right. Are we supposed to forget your wild, flaming accusations and unshakeable statements of your innocence and purity?

Sports can easily be dismissed as circus and bread, but when leaders of global financial institutions stand up and posture, then there are consequences. The poor dumb marks who actually believed the lies held on and were ruined, while the "smart money" recognized a last desperate con and sold sold sold.

The sad truth is that virtually nothing in the U.S. economy or media is believable. It is all spin, con, posturing, pandering, from the phony statistical "proof" that everything is just fine to the "calls for change" (no change in the borrow-and-spend deficit) and the phony electioneering pandering to "bases."

Was it ever any different? Well, the manner in which the government cherrypicks "data" has certainly been massaged over the past decades, and ever since Reagan was declared the "Teflon president" we have seen a public willingness to believe what we want to believe as opposed to a healthy skepticism.

So yes, there are still plenty of marks and ever-more lobbyists and well-paid spinmeisters. But the con seems to have deepened, and now engages virtually all the influential players (see chart above). Is it a conscious economywide con? The collusion needn't be spoken out loud, for the fear doesn't even need to be voiced or addressed: don't rock the boat or you may be out of a job/commission/ contract. Thus it is fear of the inevitable coming collapse which powers the players to maintain the con.

Sure, one reporter's skepticism can be printed on page A-13, but his/her voice is easily drowned out with hundreds of breathless stories on the candidate's piccadillos or pronouncements, sports scores, iPod sales (up, you see, the economy is still booming, and Apple's going to $200/share) and the rest of the purposeful noise which passes for "news."

If we stop buying the con, the con man/woman has to move on or (gasp) try an honest living.

New Readers Journal comments: 16 thought-provoking new commentaries for your reading pleasure.

New Book Notes: My new "little book of big ideas," Weblogs & New Media: Marketing in Crisis is now available on amazon.com for $10.99. Here is a review of the book:

Charles Hugh Smith's "Weblogs & New Media: Marketing in Crisis" is one of the most important business analyses I have ever read. It is the first to squarely face converging global crises from a business perspective: peak oil, climate change, resource depletion, and the junction of key social cycles will radically alter the business landscape in coming decades.

As an entrepreneur I have been retooling my own business to meet these head on, but have felt hamstrung by marketing's insistence upon positivity even to absurdity and denial. "Weblogs & New Media" helped immensely by providing the conceptual framework I needed to move forward. Within this framework I can begin formulating strategy appropriate for the new global zeitgeist -- namely, trust as the new currency du jour. Moreover, Smith offers insights for building this trust via digital resources that business currently misunderstands and misuses, a criticism that will be familiar to Seth Godin fans but which has implications far beyond traditional marketing goals.

"Weblogs & New Media" is essential reading for any entrepreneur who refuses to drink the business media kool-aid, and who wishes his or her business to remain viable even in times of crisis.

An excerpt from Claire's Great Adventure:
All three gazed up at the black bulk of the two freighters, both of which were illuminated by only a few dim bulbs struck on the superstructure. There was no sight of a crew, and Claire wondered if they were out on the town.

One ship rode high in the water, suggesting its cargo had been emptied, while the smaller one rode low, suggesting it had already taken on cargo. Of the two ships, the smaller one seemed older, perhaps simply because it was smaller; in the quiet darkness, they seemed like ghost ships. Claire knew most cargo was carried by massive container ships the size of luxury liners, and she wondered what such old ships even transported anymore.

May seemed confused, and Claire pulled her toward the smaller freighter, stage-whispering urgently, "Hit the redial and then listen."

Aunt May did as instructed, and again the faint ring of a phone sounded seconds after she'd redialed. This time, they could distinctly hear it emanating from the smaller freighter.

"He's on board that ship," Claire whispered. "Let's go."

"Are you crazy?" Camden hissed. "We have no idea what's up there."

"Afraid of some rats?" Claire responded gamely. "There's no crew around."

"You don't know that," May said. "Maybe they're asleep. Now let's not do anything rash."

"I can't believe you two," Claire whispered harshly. "We know Giddings' phone is up there, and so maybe he is, too. He may need our help, and we're holding back like scaredycats."

"And what happens if he's not alone?" May demanded.

Thinking aloud, Claire said, "We go in real quiet-like, and just look around. If we spot anyone other than Mr. Giddings, then we come back here and call the Police."

"How do we know what this Giddings looks like?" Camden asked, and Claire exhaled in frustration. "I have no idea, but he probably won't look like a sailor. Look, you two stay here and I'll go." It was far braver sounding than Claire felt, but she prayed that Camden would grudgingly accompany her.

There was no gangplank up to the deck, only a series of large steel handles welded to the side of the ship; a platform had been brought close the hull to bring the handles within reach of someone on the dock. Though the ship was much smaller than its container-ship brethren, its sides loomed high above the dock. "I have a confession to make," May whispered guiltily. "I really cannot stand heights—especially in the dark."

"That's OK," Claire said. "We need someone on the dock anyway to watch our backpacks. Now when I get to the deck, I'll signal you to call Gidding's phone again." Turning to Camden, she whispered, "Get your phone, and then let's go."

"Who said I'm going?"

"Just wait for me at the top," Claire said. "A lookout. There's nothing hard about that."

"Other than falling off and being crippled for life," Camden retorted.

"OK," Claire said resignedly. "Just wait at the bottom."

Camden wordlessly agreed to this reduced duty, and the two girls crept forward to the chain-link security fence. Though topped with menacing barbed wire, the fence ended at the dock's edge; the lower edge of one section was visibly loose, and though she hated smudging her new yellow dress, Claire dropped to the ground and wriggled beneath the bent chain links. Dusting herself off, she awaited Camden, who gamely dropped to the wooden planks and began squeezing under the fence. Claire heard the sound of fabric tearing, and a quiet oath; one of the wires had snagged Camden's blouse. Claire bent down to help her locate the snare—one of the sleeves was torn—and as Claire released it Camden whispered harshly, "You owe me a new blouse."

"I'll buy you two new ones," Claire whispered.

"By the time this is over, it'll be three," Camden hissed, and then squirmed free of the fence. Stealthily approaching the ship, Claire realized the oversized welded handles were actually far apart; clambering up the side was going to be a lot harder than climbing a jungle gym back home. Gripping the first bar of cold steel, Claire felt the rust on the underside of the handle, and hoped the rusty ladder rungs wouldn't break off beneath her weight.

"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
--An anonymous comment about CHS posted on another blog.

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