If we ignore the lip-service showered on "reform," we find that there is really only one strategy in America: extend and pretend. Individuals, households, communities, cities, states, enterprises and the vast sprawling Empire of the Federal government and its many proxies--all are engaged in extend and pretend.

The closest analog is a seriously ill alcoholic who tells himself he just has a hang-over when it's abundantly clear he is suffering from potentially terminal cancer. With a hang-over, extend and pretend is the only strategy that works: you can try various "magic potions" to relieve the symptoms, but the only real cure is to give the body enough time to cleanse itself of the toxins you've created and pretend to be functioning in the meantime.

In the case of aggressive cancer, then extend and pretend is the worst possible strategy: ignoring the rapid progression of the disease only makes eventual treatment more difficult and uncertain.

The only way to treat cancer is to face it straight-on, learn as much as you can about the disease and the spectrum of treatments, consider the side-effects and consequences of various treatment strategies, and then get to work radically transforming your entire life, mind, body and spirit to effect the cure.

Why do we perpetrate the delusion of a hang-over when it's painfully clear we have cancer? We're afraid, of course; we fear the unknown and find comfort in the belief that nothing has to really change. We call this denial, but it arises from fear and risk aversion.

In the moment, amidst all the swirling chaos of fear and uncertainty, we choose extend and pretend because it seems to be in our self-interest.

This is the ontology of extend and pretend: a delusional view of our self-interest. The drunk is terrified of not being able to drink himself into a stupor; in that dysfunctional state of being, then he perceives his self-interest as denying he has cancer because he knows that treatment will require him to stop drinking.

In effect, what he perceives as acting in his self-interest is actually an act of self-destruction.

Political and social revolutions occur when the productive classes realize the Status Quo no longer serves their self-interests. In other words, the revolution is first and foremost an internal process of recognition and enlightenment: all the propaganda issued by the Status Quo, i.e. that it serves the best interests of the productive classes, is finally recognized as false.

As this awakening begins, a divergence between the definitions of self-interest by the Power Elites (financial and political) and the productive classes begins to open. This is extremely dangerous to the Power Elites, who are fundamentally parasitical and predatory: their wealth and power all flow from the labor, taxes, debt service and passivity/complicity of the productive classes.

The Power Elites' time-honored strategy to protect their own wealth and grip on power has three components: one is to pursue a strategy of pervasive, ceaseless propaganda to persuade the productive classes that the system is sound, fair and working for them; the second is to fund diversionary "bread and circuses" for the potentially troublesome lower classes, and the third is to harden the fiefdoms of power and wealth into an aristocracy that is impervious to the protests of debt-serfs and laborers below.

In addition to "the system is working for you" social control myth, the wealth/power aristocracy also invokes various fear-based social control myths: external enemies are threatening us all, so ignore your debt-serfdom and powerlessness, etc.

In the ideal Power Elite scenario, a theocracy combines faith and State: not only is it illegal to resist the Aristocracy, you will suffer eternal damnation for even thinking about it.

Ask yourself this: how much influence do you as a citizen, voter and taxpayer have over the Federal Reserve? If we're honest, we must confess that the Federal Reserve is as remote to us as any branch of the North Korean government: we have zero influence over it, and the same can be said of our elected representatives.

This is the definition of an aristocracy, oligarchy (a power structure in which power is held by a small number of people), kleptocracy, etc.

The Power Elite has a key advantage over the citizenry: its own self-interest is clear. The citizenry must entertain this question: is the Status Quo really working for me or not? The Power Elite aristocracy has no such confusion: the Status Quo is working beautifully for them, and the only threat to their wealth and power is the possibility that the productive classes might opt out and stop paying the taxes and debt service which funds the parasitical Power Elite.

Thus the Power Elite has a single goal: to persuade and coerce the citizenry into accepting their powerlessness and debt-serfdom as a pathological form of self-interest.

There is another dynamic to the Power Elite aristocracy's grip on concentrated wealth and power: the self-selecting, self-perpetuating pathology of the aristocracy and the Upper Caste that so slavishly serves them. Author Chris Sullins identified this dynamic as one of self-propagating fractals (The MacRib is Back! September 23, 2008):

There are readers who might feel I’m being very hard on the public with the comparison so far. But look how people have allowed their names to be changed. They have gone from being called citizens to consumers. A citizen is a very human word which denotes awareness, involvement, and participation. It’s a word that sounds active and conscious in its very nature. A consumer by contrast sounds far more passive. A lot of other animals and even inanimate processes consume things. A consumer sounds like sheep grazing.

Once a populace accepts a self-definition that strips out their participation as anything but passive consumers, then the maintenance of power boils down to test-marketing new social control myths and fear-mongering.

This sophisticated level of marketing and predation requires a highly trained class of servants: an Upper Caste of technocrats, middle managers, marketers, lobbyists, "creatives," engineers, etc. who do the heavy lifting that keeps the Power Elite's wealth and status not just intact but expanding.

The reward for this service is a hefty salary that enables the purchase of the signifiers of upper-middle class existence and an intoxicating proximity to power and status visibility, i.e. some measure of recognition as "being somebody important."

Until very recently I reckoned this Upper Caste of loyal servants comprised about 20% of the American populace, but upon closer examination of various levels of wealth and analysis of advert targeting (adverts only target those with enough money/credit to buy the goods being offered), I now identify the Upper Caste as only the top 10% (the aristocracy is at most the top 1/10th of 1%).

Wealth and income both fall rather precipitously below the top 10% line, and as globalization and other systemic forces relentlessly press productivity into fewer hands, then the rewards aggregate into a smaller circle of laborers.

As noted yesterday in Social Fractals and the Corruption of America (February 8, 2012), you cannot aggregate healthy, thrifty, honest, caring and responsible people into a group that is dysfunctional, spendthrift, venal and dishonest unless those individuals have themselves become dysfunctional, spendthrift, venal and dishonest.

This is the ontology of the pathology of power: If you want to join the elite levels of the Upper Caste, where "doing God's work" is a daily practice of fraud, embezzlement, misrepresentation, collusion, purposeful obfuscation, all in service of a pathologically self-destructive notion of self-interest, then you must become dysfunctional, venal and dishonest (with becoming spendthrift in service of acquiring signifiers of status a close fourth).

Since non-pathological people will quit or be fired, then these fractals of corruption are self-selecting and self-perpetuating. This is true not just of financial America but of elected officialdom. Anyone who is still naive or delusional enough to think that getting elected to Congress or the state legislature will empower "doing good" will soon learn the ropes: the next election is less than two years away, and if you want to retain your grip on power you're going to need a couple million dollars.

And if you want to "get something done," you will need to take orders from your party leadership and service your donors.

I once had a friend who by extraordinary effort got himself elected to the state legislature. Being a young idealist, he actually refused to vote as his party leadership directed: thus identified as a rebel, he was predictably out two years later.

So much for "working within the system." By the time all the donors, lobbyists, leeches and parasites have been properly serviced, the "reform" bill is 2,000 pages long.

As a result of the feudal structure of wealth and power in America and the self-reinforcing, self-propagating fractals of pathological servitude, the citizenry are increasingly remote from power. The aristocracy, like feudal lords in distant, fortified castles, demands obedient service of the powerless citizenry-- work hard, pay your taxes and service your debt--and fears any awakening of true self-interest.

Just because a devoted member of the Upper Caste is allowed to enter the castle to do his work doesn't mean he is part of the aristocracy. That glow of proximity to power is his reward for dutifully slaving away as a higher-order serf.

The American Revolution was triggered not by a sudden upwelling of noble ideals, but by the realization of the landed nobility and productive classes that the commercial and political domination of Great Britain was placing their wealth and liberty at risk.

Put another way: they awoke to the fact that the Status Quo no longer served their essential self-interests. When the Upper Caste and productive classes reach this same conclusion, then perhaps they will elect a transformational third party to sweep away the corrupt political class.

This new party must embody a moral imperative that acts as a social fractal: retaining power is not the goal. If the people want to restore the pathological aristocracy to power in two years, then by all means let them have it. They will do so without our complicity, interest payments, labor and servitude, for we have opted out of pathology.

If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times (print edition) or Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One. The solution in one word: Localism.


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