A Good Con, and The Higher Level Con   (July 1, 2008)

We all know how a good con works: establish some common ground, evoke sympathy or a bedrock value, then take the mark for all he's worth.

The Republican Con works by evoking a schizophrenic duality of patriotism--if you love your country, then you'll do what your government tells you, like support this distant war--and fear of that same government--they're trying to strip your rights to own guns, regulations are strangling us all, etc.

Toss in vast pork-barrel deficit spending and give-aways to the elites (non-existent regulations on investment bankers' derivatives books and deals, etc.), and you have a Great Con; the marks pony up their votes easy as you please.

The Democratic Con evokes sympathy, and the distrust of The Powers That Be. Don't you want to aid the victims of injustice, and the underprivileged? That runs deep in most major religions: charity, compassion, sharing. Yes, of course we do. And don't you know it's those filty-rich elites which are strangling us all with their "corporate wealthfare" and offshore banking tax havens?

Toss in vast pork-barrel deficit spending and give-aways to the elites (a slightly different set, with lots of overlap), and you have a Great Con; the marks pony up their votes easy as you please.

But the Higher Level Con is distracting the marks with a false choice. All truly great propaganda machines work this "manufacturing consent" vein: give the media just enough leeway to create the sense of diverse topics and coverage, so the citizenry accept this simulacrum of "free press" for the real thing.

In a coarse analogy, hammer the people with the choice between Bud and Bud Light, while keeping the good stuff to yourself.

The other trick to "manufacturing consent" is to keep a terrible, frightening, powerful, threatening enemy handy. Nobody works this better than the Chinese government, who can whip up the populace in a mere moment to riot outside Carrafour stores or the U.S. Embassy, and then disband the crowd right when they're about to become dangerous. The citizenry gets to blow off steam built up living in a corrupt, repressive, unjust system, and the Party dodges their wrath by erecting convenient "enemies" to vent at as regularly as night and day.

For more on just how skillful the Chinese are at the Higher Level Con, read these two pieces from The New Republic:

Medals And Rights What the Olympics reveal, and conceal, about China by Andrew J. Nathan

The Last Hero of Tiananmen How an aging doctor became the conscience of China by Philip P. Pan

And in an ironic twist, here's a lengthy expose of the U.S. media's collusion (and perhaps much worse) in phony stock trading, which nails the Editor-in-Chief of The New Republic for his connection to cheerleader superstar Jim Cramer's hedge fund: Deep Capture (Thanks to Tony K. for the link)

So how much of this election cycle media coverage is merely a Higher Level Con, the careful pruning of issues and coverage to a phony little plot of ersatz "debate"? How much is the modern equivalent of staged Coliseum battles between sideshow gladiators, a constantly hyped distraction?

Examples abound. The false "debate" in the mainstream financial media is whether the Fed should raise or lower the Fed Funds rate a quarter point or so.

Meanwhile, the real debate should be about abolishing the Federal Reserve entirely, and about the role of a quasi-central bank in a supposedly free-market economy. But that debate has been shoved aside; only "crackpots" call for the dissolution of the quasi-central bank called the Fed.

Here's another. The two candidates are essentially arguing about whether to run a $500 billion deficit, or a $1 trillion deficit. Obama May Produce $1 Trillion Deficit, Gross Says (Thanks to Craig M. for the link)

Bill Gross, manager of the world's biggest bond fund, said a Barack Obama administration may produce the first $1 trillion deficit and intermediate-and long- term bond yields have already reached cyclical lows.

Higher taxes for hedge-fund managers and oil companies will not cover anticipated Obama tax cuts for the poor and middle- class, universal health care and aid to the depressed residential real estate market, said Gross, a long-time Republican.

"This economy will need a jolt of $500 billion or so of government spending real quick," Gross, co-chief investment officer of Newport Beach, California-based Pimco, said in an open letter to Obama, the likely Democratic presidential nominee, published on the company's Web site today.

The likely expenditures and increased borrowing suggest that "intermediate and long-term yields on government bonds have already bottomed and will gradually rise" through the next four years and possibly beyond, Gross said, in his analysis that assumes Obama will defeat his presumptive Republican adversary, John McCain.

Meanwhile, the debate should be about cutting spending to match tax revenues, and discussing just how devastating higher interest rates will be. But no, only "crackpots" actually think the government shouldn't run trillion-dollar deficits. Come on, people, a $500 Billion deficit is practically "a balanced budget" nowadays.

The Republicans have mastered the Cultural Distraction Higher Level Con for years. The Democrats just don't have anything to match this firepower. As the U.S. system is shaking loose and the bolts are snapping off, the Repub strategists ready their attack: "Gay Marriage! It's the very most important issue in the entire galaxy! Drop everything and focus on this! Who cares if you're about to be evicted and laid off, forget that and focus on the horrible deadly enemy, Gay marriage! Oops, that's for next month--we mean Al Qaeda!"

The Nazis were also masters of manufacturing threats to culture and to national security, and the consequences of such manufactured consent are well known. Of course Nazi Germany was fascist and China is Communist and the U.S. is a liberty-loving bastion of freedom. And it is, in one way, and that must drive the Powers That Be crazy: the blogosphere, how do we control the blogosphere? We're losing our monopoly on information and "framing the issues," dammit!

Poor elites, Chinese and American; they share the same nasty problem. The Internet has changed the game and it's harder and harder to maintain the monopoly required to manufacture consent. The Chinese government has thousands of staffers toiling away on the "Great Firewall of China," blocking non-Chinese sites and blogs, and shutting down homegrown critics' websites. Thank goodness so many Americans are addicted to cable TV; it's a lot easier to control the agenda of networks like CNBC and entertainers like Jim Cramer than it is to control the web.

And so the Higher Level Con plays on. The issue today, and every day: Bud or Bud Light?

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