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Ours Is a System of Fraud, Swindles and Corruption May 23, 2025
But all bubbles pop, and there are no tricks left to fund both the greed of the few and the needs of the many.
Every society / economy is a distribution mechanism that distributes: 1. Gains 2. Losses 3. Risk 4. The costs of securing the sources of gains. As a general rule, markets / economies don't really care who ends up with the losses, and this is why markets / economies are fundamentally pathological structures: the single-minded focus is to maximize gains and minimize costs and losses by distributing them to others by any means available. As a general rule, societies have to manage the distribution in a slightly less pathological manner to keep the status quo from being overthrown by those forced to bear the costs and losses. As Mao famously observed, "political power grows out of the barrel of a gun," and so the sociopaths sluicing the gains into their own pockets and dumping the costs and losses on the economically / politically powerless without regard for social stability find the way of the Tao is reversal as those getting the crumbs eventually have nothing left to lose. In other words, markets / economies are embedded in a social structure, not the other way round. And the social structure has to balance the distribution fairly enough to keep the majority from concluding they have nothing left to lose by throwing their lot into overthrowing the status quo. We can gussy this structure up with a lot of theorizing and references to Plato, Marx and Machiavelli and hundreds of other players in the longstanding drama, but these are the fundamental forces in play: do the sociopaths have enough political and financial power to channel most of the gains to themselves and dump the costs and losses on others, or is the system capable of enforcing some limits on the sociopaths? I submit that the United States is in the firm grip of the single-minded few focused solely on maximizing their gains and distributing costs and losses to others by any means available. The social and political restraints that placed modest limits on the aggregation of power and wealth into the hands of the few have crumbled, and this structural collapse has been hidden behind flimsy billboards hyping the latest in distractions: AI, tariffs, stablecoins, Rich Mom fashions, etc. These flimsy distractions are about to be blown over by the windstorm of recession and social disorder as the American households clinging on to the fantasy of The American Dream as all the costs and losses are dumped on them as the gains flow to the top 10% finally throw in the towel on the status quo. The entire bloated, distorted beast has been living on buy now, pay later skims and scams, and the debt pushers have turned enough of the populace into debt-junkies that there's few new customers left to addict. The entire travesty of a mockery of a sham is out of balance and cannot be restored with the usual magic tricks. The interests of the citizenry--supposedly represented by elected officials--have been trampled underfoot by a thundering herd of fraud, swindles and corruption, the means by which the sociopaths control the distribution of gains, losses, costs and risks. This systemic dominance of fraud, swindles and corruption has been not just normalized but hyper-normalized: we all know the entire system is hopelessly compromised by corruption, but since we're powerless to change this distribution, we act as if this is normal, and go about our business, debating AGI (artificial general intelligence) and other absurdities to pass our time while we await the inevitable reversal of fortunes. Here is the real distribution of gains, losses, costs and risks in America: the gains go to the most corrupt few and the losses, costs and risks are distributed to the many. Here are three of the latest manifestations of fraud, swindles and corruption among a seemingly countless stream of self-serving outrages that are no longer outrages, they're just the way things work now. Here's how Corporate America takes care of its customers: the gains are ours, the risks are yours. It's taboo to call things what they are, so we can't say that Corporate America is pathological--even when it is: A Devastating New Expose of Johnson & Johnson Indicts an Entire System. Revealed: UnitedHealth secretly paid nursing homes to reduce hospital transfers. Owner-Occupancy Fraud and Mortgage Performance. (rampant mortgage fraud... again) As always, I am honored to share a remarkable data base of Corporate Fines and Settlements from the early 1990s to the present compiled by Jon Morse. There are 2700 entries, updated through December 2024. What's finally happening is the system can no longer collect enough resources to fund the minimum required to satisfy the sociopaths and the minimum required to satisfy the bottom 90%, so something's gotta give. The solution has always been straightforward: print or borrow another couple trillion dollars to fund the greed of the sociopaths and whatever it takes to keep the herd from stampeding. The trillions are getting harder to print/borrow, and so it's finally squeeze-time. Gosh, this is actually kinda hard: do we squeeze the sociopaths, who scream bloody murder at any reduction of their gains, or do we squeeze the bottom 60% who are already on the cliff edge? Can we sorta kinda squeeze both enough to keep the status quo intact? This isn't sustainable stability: it's entropy dressed up in the finery of stability. The sociopaths have concentrated sufficient financial and political power to stave off any real reductions in their distribution of the gains, and so the costs and losses will be distributed to the bottom 90% in various forms, as usual. Only some percentage of the bottom 90% no longer has sufficient credit or income buffers to absorb more losses, costs and risks. The last trick in the status quo's hat is a credit-asset bubble that generates an illusion of unending wealth for everyone: wealth for those who own the assets, of course, and wages for everyone below due to the trickle down effect where you buy a $1 million vacation home and I live in my car in a parking lot working in town: In a Snow Paradise, They Live in This Parking Lot: People experiencing homelessness can sleep in their cars in this wealthy ski town in Colorado, but only if they have a job. But all bubbles pop, and there are no tricks left to fund both the greed of the few and the needs of the many. The top 0.01% own five times as much as the bottom 50%--170 million Americans. That's some very pretty entropy dressed up as stability. Look, I wish it were different, but the facts speak for themselves: 
Do we hear the chorus of complaints of the top 0.1%? Why oh why aren't the bottom 50% delighted to own 2.5% of total household net worth? It's more than enough, right? 
This makes the impossible--a reshuffling of the social order on a grand scale--not just possible but inevitable. Nobody saw it coming, etc. Um, yeah, sure, whatever. My recent books: Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site. The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century print $18, (Kindle $8.95, Hardcover $24 (215 pages, 2024) Read the Introduction and first chapter for free (PDF) Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF) The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF) When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF) Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF). A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF). Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF). The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF) Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century print $20, (Kindle $9.95, Hardcover $24 (215 pages, 2024) audiobook, Read the Introduction and first chapter for free (PDF) 
What if growth--and policies to accelerate growth--are no longer working because our fix for every problem--growth at any cost--is failing? We're told Progress is inevitable as a result of technology, but everyday life is getting harder, not easier--the opposite of Progress, what I call Anti-Progress.
What if the real source of the unraveling is far deeper than economics or politics? What if the problem is what we see as the inevitable destiny of humanity--Progress--is actually a modern mythology, disconnected from the real-world consequences of growth for growth's sake? We indignantly reject that Progress is a mythology, but our need for mythology hasn't gone away because we've mastered technology; we've created a modern mythology of technology that is heedless of its own consequences. To truly progress, we need a new mythology aligned to 21st century realities. That's the goal of this book. Read the Introduction and first chapter for free Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF) 
Just as no one was left unaffected by the rise of globalization, no one will be unaffected by its demise.
The only response that reduces our vulnerability is self-reliance: de-risk your life by carving a path that works for you.
When Ralph Waldo Emerson wrote his famous essay Self-Reliance in 1841, the economy was localized and households supplied many of their own essentials. Now we're dependent on distant sources for our essentials. For Emerson, self-reliance is thinking for ourselves rather than taking the conventional path. Self-reliance today means reordering our priorities and values. Self-reliance is often confused with self-sufficiency--the equivalent of Thoreau's cabin. But self-reliance isn't about piling up money or an isolated cabin; it's about cooperating with trustworthy others in productive networks. The book details the essential mindset of self-reliance and 18 nuts and bolts principles of self-reliance in the 21st century. Podcast with Richard Bonugli: Self Reliance in the 21st Century (43 min)
Recent entries: Ours Is a System of Fraud, Swindles and Corruption May 23, 2025 Boomers, Let's Face It: The Math Doesn't Work May 20, 2025 The Real American Dream: Starting Over May 19, 2025 Living on Meds, Vitamin C and Ibogaine: American Precarity May 14, 2025 The One Real Economic Indicator: "Upgrade to Premium" May 12, 2025 Tariffs Are Not Enough May 8, 2025 It Was 20 Years Ago Today I Started this Blog: What Surprises Me May 6, 2025 The Terminal Rot in Corporate America May 5, 2025
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May 2, 2025
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Extra-Special Bonus Aphorisms:
"There is no security on this earth; there is only opportunity." (Douglas MacArthur) "We are what we repeatedly do." (Aristotle) "Do the thing and you shall have the power." (Ralph Waldo Emerson) "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius and a lot of courage to move in the opposite direction." (E.F. Schumacher, via Tom R.) "He who will not risk cannot win." (John Paul Jones) "When we drink coffee, ideas march in like the army." (Honore de Balzac) "Progress is not possible without deviation." (Frank Zappa, via Richard Metzger) "Victory favors those who take pains." (amat victoria curam) "The man who has a garden and a library has everything." (Cicero, via Lee Bentley) "A healthy homecooked family meal and a home garden are revolutionary acts." (CHS) "Do you know what amazes me more than anything else? The impotence of force to organize anything." (Napoleon Bonaparte) "The way of the Tao is reversal" Or "Reversal is the movement of Tao." (Lao Tzu) "Chance favours the prepared mind." (Louis Pasteur) "Success consists of going from failure to failure without loss of enthusiasm." (Winston Churchill) "Where there is ruin, there is hope for treasures." (Rumi) "The realm of gratitude is boundless." (CHS, 11/25/15) "History doesn't have a reverse gear." (CHS, 12/22/15) Smith's Law of Conservation of Risk: Every sustained action has more than one consequence. Some consequences will appear positive for a time before revealing their destructive nature. Some consequences will be intended, some will not. Some will be foreseeable, some will not. Some will be controllable, some will not. Those that are unforeseen and uncontrollable will trigger waves of other unforeseen and uncontrollable consequences. (July 8, 2014)(thanks to Lew G. for retitling the idea.) Smith's Neofeudalism Principle #1: If the citizenry cannot replace a kleptocratic authoritarian government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only. The Smith Corollary to Metcalfe's Law (The Network Effect): the value of the network is created not just by the number of connected devices/users but by the value of the information and knowledge shared by users in sub-networks and in the entire network. (CHS, 4/6/16) My Credo of Liberation: I no longer care if the power centers of our society--the distant, fortified castles of our financial feudal system--are changed by my actions, for I am liberated by the act of resistance. I am no longer complicit in perpetuating fraudulent feudalism and the pathology of concentrated power. I no longer covet signifiers of membership in the Upper Caste that serves the plutocracy. I am liberated from self-destructive consumerist-State financialization and the delusion that debt servitude and obedience to sociopathological Elites serve my self-interests. (Thank you, Klaus-Peter L., for reminding me) "We've become a culture of excuses rather than solutions: solutions always require sustained effort and discipline." (CHS 4/9/16) "Fraud as a way of life caters an extravagant banquet of consequences." (CHS 4/14/16) "Creativity = problem solving = value creation." (CHS 6/4/16) "Truth is powerful because it is the core dynamic of solving problems." (CHS 7/21/17) "We live in a system of human emotions that masquerades as a science (economics)." (CHS 1/1/18) "Always remember, your focus determines your reality." (George Lucas) "Diversity is for poor people. Sameness is for the successful." (GFB) "When power dissipates suddenly, it dissipates completely." (CHS 7/14/19) "Disobedience is the true foundation of liberty. The obedient must be slaves." (Henry David Thoreau) "Markets cannot price in the value of non-monetized natural assets such as diverse ecosystems." (CHS 7/14/19) "Magical thinking isn't optimism, it is folly." CHS 1/3/22) "Tune in (to self-reliance), drop out (of hyper-consumerism and debt-serfdom) and turn on (to relocalizing capital and agency)." (CHS 1/5/22) "The path to everything you desire starts here: like yourself as you are right now." (CHS 11/20/22) "There are only two signals: how many essentials you produce and share and if you're consuming less with better results. Everything else is noise." (CHS 12/17/22) "Liberation is no longer needing any confirmation or feedback from others or the world for one's sense of self. Wealth, fame, recognition, admiration, praise, prestige, approval, sainthood, martyrdom, success: none are needed, none are desired." (CHS 12/26/22) "When fame, wealth, prestige, status and glory are out of reach, you're free to pursue other more valuable things." (CHS 2/6/22) "It is the sacred duty of every activist who seeks to better their community to grow and share as much life-giving food as is humanly possible." (CHS 6/15/23) "Being anonymous, gray and unknown is the ideal state of freedom." (CHS 3/15/24) "We seem to have entered a world of anti-leisure and anti-productivity in which the unpaid shadow work demanded to keep all the complicated digital bits in motion obliterate our leisure and productivity." CHS (5/22/24) "It is axiomatic that failing systems work the best just before they fail catastrophically." Ray W. "Looking younger is mere technique; thinking younger demands creativity." CHS (10/16/24) "Tell me what's taboo and I'll tell you the truths that threaten the status quo." CHS (12/15/24) "This is the core of the Attention Economy: the ultimate addiction is the addiction to ourselves." CHS (1/28/25) |
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