Propaganda: We Are Complicit   (April 29, 2009)

Propaganda requires the active participation of a citizenry willing to be suspend rigorous skepticism in the self-serving hope that illusion can trump reality and that "others" are to blame for self-inflicted wounds.

Does anyone seriously doubt that virtually every pronouncement issued by the Federal Government, local government, self-serving corporate groups and the MSM financial media is carefully crafted propaganda?

Just as a particularly egregious example, consider the slick combination of half-truths, misleading "statistical" context and self-serving distortions packaged for our consumption in this heavily promoted headline:

New Home Sales Rose 0.6%

Nice, but the reality, as reported by Barry Ritholtz on The Big Picture, was not so rosy: New Home Sales Fall 30.6% in March:

Another ugly New Home Sales report: There was no statistically significant monthly improvement, as the reported change of 0.6% was within the margin of error of ±19.0%. The year-over-year data, however, was god-awful: A drop of 30.6% (±10.7%) below the March 2008 data.

There is a slight silver lining in the inventory: Months supply fell to 10.7 from 11.2 — the lowest level since October 2008. The cycle high was in January 2009 at 12.5. And the absolute # of homes for sale fell to 311k from 328k to the lowest since Jan ‘02. While this is an improvement, 6 months is the 30 year average, so we still have a ways to go.

And as Rex Nutting points out, even with Builders cutting prices in March, “the time it takes to sell a home rose to record high of 10.2 months.” Blame competition from cheap foreclosures, with nearly half of all existing sales distressed property.

I've added a comment to the entry's chart:

As new home sales have plummeted, we have to ask: why should we interpret a tiny blip up as anything other than a temporary pause in a relentless downtrend? With millions of existing homes sitting for sale and another 600,000 distressed properties sitting in lenders' inventories, awaiting a mythical return of a "sellers' market" in real estate, exactly why shouldn't new home sales drop to 100,000 per year or even 10,000 per year?

Meanwhile, the hype that "the bottom in new homes sales is in" has spurred a huge rally in national home builders, even as they continue to lose money and insiders are selling like no tomorrow--maybe because they know better than anyone that, well, there is in fact "no tomorrow" when it comes to their stock and their business.

And they're not alone. Jesse at Jesse's Cafe Americain is reporting The Insiders Are Selling Into This Rally.... Heavily.

An honest headline on the statistical noise blip of .6% would have read something like this:

New Home Sales Plummet 30%; Govt and RE Industry Spin Phony "Bottom"

What few comment on is the complicity of all who remain silent in the face of the Big Lie because they have a self-serving interest in the Big Lie's success. Everyone with a stake in housing or the stock market is hoping the 24/7 propaganda tsunami succeeds in creating a renewed surge in stocks, housing, borrowing and spending, even as they know in their hearts and in their minds it's all lies, fabrications, dissembling, distortions, manipulation and brainwashing repetition of half-truths.

We all know the data is being spun so hard it's become a blur. New home sales fall from 1.4 million units a year to 350,000? Great! the bottom is in!

GDP is tanking? Great! Inventories will need to be restocked soon on a gigantic scale.

Banks made obscene profits from trading tricks and the usual accounting frauds? Great! The banking sector is healthy again! (Had a loss in December? Just drop that month from your reporting--it works every time!)

Ford only lost $1.4 billion last quarter? Great! It doesn't need a bailout (yet) so let's triple the stock because "the bottom is in."

Like any Big Lie perpetrated by the State and a nation's Plutocracy, this requires the active complicity of the citizenry to work. Like a theft committed in broad daylight, the witnesses who turn silently away enable the crime.

The game of musical chairs always offers the promise of getting out before the crowd stampedes for the last open chair. This stock market rally is a classic example: the insiders goose a phony rally ever higher, blowing through every shorts' protective stops, and then they unload at the top and go short themselves.

The decline, when it kicks in, will be so sudden that no one else will be able to get short in time. It's a sucker's rally and a sucker's game, but we all play along because we're hoping to catch the top ourselves and recoup some of our stupendous losses.

Nice concept, but the game is rigged. One day we'll wake up and the market will be down hundreds of points, and there will be no way to get short and profit from the plummet. That's the plan, baby, and it will be repeated in housing, bonds, etc.

That's the danger of playing along with propaganda: you think its success will benefit you, but that's simply the meta-level of the propaganda: you're supposed to think the propaganda will benefit you. Only it won't; it will only benefit the State and the Plutocracy which act as two sides of the same coin.

Here is a timely excerpt from Survival+ 7: Simulacrum and the Politics of Experience (April 3, 2009) on how propaganda works:

Though "propaganda" does not fully cover all that I mean by the politics of experience (which includes assumptions which are largely subconscious and subliminal, i.e. "the obvious"), it is nonetheless extremely important to understand how education actually makes one more vulnerable to carefully crafted marketing/propaganda. A classic text on the subject is Propaganda: The Formation of Men's Attitudes by Jacques Ellul.

Book reviewer Alexei Proussakov summarized what we need to look out for in his Amazon review of Age of Propaganda: The Everyday Use and Abuse of Persuasion:

The authors did a research of propaganda techniques and set four stratagems of persuasion:

  • You create favorable climate for the message (called pre-persuasion). You subtly outline what picture has to be drawn in the end. Here you decide what way thoughts and perceptions of the audience will be shaped and channeled. Having established right basis for further discourse you secure the results you seek. At this stage you should identify some statements as axioms, i.e. `what everyone takes for granted' and `what everyone knows'. You attribute labels (positive or negative) to objects of further discussion, put black-or-white colors in non-disputable way. You use generalities to depict the situation - they are usually so ambiguous that you may change their meanings in the future. You use rumors and gossips.
  • You create a 'source credibility', i.e. establish a favorable image in the eyes of the audience. The message must come from `experts' or `unbiased' and, of course, personally attractive communicators. Try to switch on the self-persuasion mechanism of the audience.
  • You create a message that focuses the target's attention and thoughts on exactly what you want them to think about. Research has identified at least five conditions that are likely lead to heuristics. Heuristics are most likely to be used when people do not have time to think carefully about the issue, when they are so overloaded with information that it becomes impossible to process it fully, or when they believe that the issues at stake are not very important. Heuristics are also used when people have little other knowledge or information on which to base a decision and when a given heuristics comes quickly to mind as they are confronted with a problem.
  • You create an emotion of the target that will help you channel thoughts of audience in right direction. Fear appeals are most effective when they raise high levels of fear and suggest a doable and effective response (the authors also explain why sometimes fear does not work). Guilt: once we are filled with guilt, our thoughts and behavior are directed towards ridding ourselves of this feeling that's where propagandists take advantage of us. Feeling of obligation and indebtedness: large initial request and immediate concession by the requester invokes the norm of reciprocity -we concede. Feeling of commitment based on our desire to be self-consistent.
  • For example, to 'soften up' the target you make him involved in a much smaller aspect of the action. This serves to commit the individual to `the case'. Once people are thus committed, the likelihood of their complying with the larger request increases. Another way is to show uniqueness of the offer (scarcity sells). Use the `minimum group paradigm': You are on my side (never mind that I created the terms); now act like it and do what we say.

    The point here is that everyone who allows themselves to be persuaded does so out of self-interest. That's why propaganda is so effective: we all want to believe the miracle of effortless financial wealth can return. Like the South Seas Cargo Cults who tried to re-summon the fabulous offshore wealth of World War II GIs and their bases with simulacrum stone radios, we too are hoping our pleas to crudely contrived stone radios (and stone iPhones, Crackberries, etc.) will magically reinflate the bubbles just long enough so that we can exit before the crowd catches on to the con.

    It won't work. Magical entreaties to the Gods of Reinflated Bubbles on our stone cellphones will not create new Bull markets in stocks, housing, the FIRE economy, derivatives and fanciful debt.

    Readers often ask me for practical solutions, not just doomsday descriptions of our problems. And I try to comply with these excellent common-sense pleas to move beyond the morass of problems to solutions. So here we go:

    Stop accepting blatant financial propaganda as being in your self-interest. Stop being complicit in the lies, the fraudulent numbers, the manipulated contexts, the exaggerations, the half-truths, the distortions, the debauchery of truth and the endless spin.

    Every time you see a ginned-up propaganda story like New Home Sales Rose 0.6% then write the perpetrator of the propaganda calling them on it. Demand they seek to report the truth and notify them you will no longer subscribe to, read or watch their propaganda-loaded pap. Once they lose readers, they lose income--and that's as it should be.

    Email your representative in the satrapy known as Congress that you insist they demand real numbers and real transparency from our government or you will not only not vote for them, you will actively support their opponent in coming elections.

    Tell your friends and family it's all propaganda and warn them not to believe it or act on it. The banking sector is not healthy, it is not a new Bull market in stocks, housing is not coming back, borrowing $2 trillion a year is not sustainable or wise, Medicare is not safe for all time, the Tooth Fairy did not mint that quarter under your pillow, etc.

    Take responsibility for your own actions and refuse the temptation to blame others or institutions for lapses in your own critical-thinking and skepticism. Yes, our "leadership" (barf) and institutions have completely and utterly failed the nation. They are busy covering their tracks and evading responsibility via a 24/7 outpouring of the most desperate (and desperately obvious) propaganda.

    Vote down Orwellian doublespeak deceptions like California's Prop 1A, a vast expansion of taxes presented as an innocuous-sounding "Rainy Day Budget Stabilization Fund." Talk about a mockery of a travesty of a sham--the entire "revenue enhancement package" is loaded with deceptive phrases like "temporary re-alootment" oops, I mean "reallocation," "modernization act," etc., all carefully crafted to raise taxes and protect various State fiefdoms and other publicly funded elites from cuts in their rich salary, benefits and pension packages.

    You want a tax increase? Then start by honestly asking for one instead of trying to pull the wool over our eyes with doublespeak deception. Then describe what every State manager and employee has done to eliminate the inefficiencies, waste and petty corruptions which costs the state billions every year. Describe what every state employee, supplier and subcontractor has done to sacrifice. Remember that one day furlough a month is not a sacrifice to those facing 365 days a year on furlough. Get real and stay real with us and maybe we'd respond accordingly. Lie to us--then prepare to go bankrupt or suffer a taxpayer rebellion that makes Prop 13 look like a Sunday picnic.

    Start demanding honest headlines/summaries of our nation's true plight such as:

    Phony unemployment number drops, real unemployment rises; our government lies once again.

    Demand the unvarnished, un-spun truth for a change; refuse to enable the Big Lies, refuse to believe the propaganda, and refuse to repeat it. Always ask: cui bono? To whose benefit? Always Always Always.

    "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."
    --Walt Howard, commenting about CHS on another blog.

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