Leader of the Red House

Two texts, the first by George Friedman, the second by Dmitry Orlov.

America’s Institutional Crisis

By George Friedman on September 6, 2022 
Published at Geopolitical Futures • Here

In my latest book, “The Storm Before the Calm,” I predicted that the U.S. would go through a massive social crisis in the 2020s. That prediction has obviously come to pass. I also forecast that America would go through its fourth institutional crisis. The previous three all followed existential wars and transformed the governing institutions.

The first came after the Revolutionary War, which eliminated British imperial rule and installed a union of states and a republican form of government. The second, some 80 years later, came after the Civil War, which established the primacy of the federal government over the states. Eighty years after that, World War II extended the power of the federal government over American society and put in place a technocratic government – that is, a government of experts.

We are now 80 or so years removed from World War II, and the nature of this new institutional crisis is becoming clear. It started when the COVID-19 pandemic revealed how ineffective a federal technocracy is in imposing solutions over a vast and diverse continent. As I argued in “The Storm Before the Calm,” experts are essential but insufficient when it comes to governance. Their fundamental weakness is that expertise in one area can be insensitive to or ignorant of the problems their solutions create. Medical institutions did the best they could do under the circumstances, but their solutions disrupted the production and distribution of goods and alienated people from one another. Governance is the art of seeing the whole. Physicians tend to see only their own domain. The federal government responded to expertise in one area without creating systems of competing expertise, and it often failed to recognize the variability of circumstances that the founders envisioned.

Now another important dimension of the institutional shift is taking place: the crisis of universities. Universities have been central to the moral functioning of the United States since Thomas Jefferson required that all new states admitted to the republic fund universities. He saw them as essential in the cultivation of expertise and in creating an educated elite armed with varied knowledge essential to the regime. Over time, universities, and especially elite universities, tended to exclude prospective students and teachers who were not already part of the elite, and thus tended to suppress ideas offensive to elite values.

The GI Bill disrupted the system by welcoming soldiers into universities regardless of background. Many of them already had elements of technical expertise, thanks to their time in the armed services, and they knew too much about life not to doubt the self-certainties of their professors. This development helped create a massive professional class with highly specific areas of knowledge. That notion of expertise fed the emerging principle of government. It accepted diversity as a principle, except that its proponents weren’t always aware of, let alone concerned about, those their definition of diversity excluded. The university was therefore the pivot to the elite. It always develops cultural idiosyncrasies that overlay its function, but it also remains a foundation of the institutional structure. The university has again developed strange dynamics, but it has also developed in a direction that is deeply linked to the federal system. The problem is that students must take out outlandish loans to pay for the outlandishly high price of higher education. Given the existence of a federal lending program that linked available credit to the cost of education, universities had little incentive to control costs. The lending program was linked to cost, and the cost could rise because the available loans, in general, increased in tandem.

At the time that I wrote “The Storm Before the Calm,” student debt stood at about $1.34 trillion. This was roughly equal to the amount borrowed by subprime homeowners prior to 2008. A massive default on student loans would create problems at least on the order of the subprime mortgage crisis. The government control system was used warily, not wanting to upset an unqualified class of borrowers for political reasons or lenders who were reaping substantial profits before the collapse. The government wanted to be as inclusive as possible; it couldn’t risk excluding an “unqualified” class of people from borrowing, and it wanted to take advantage of the large constituencies endemic to large universities. The debt burden assumed by students was staggering, and universities kept increasing costs, and thus increasing the debt, hoping to ride the train as long as they could. The recent decision to bail out students, then, is the least of the issues. How the government allowed the situation to get to this point is the issue.

Ohio State University charges $23,000 a year for in-state residents, including room and board. Harvard University charges nearly $100,000 per year. These prices (which do not include financial aid outside of loans) reached this level in 2019 on an intensifying curve, a curve made possible by the government acting like a subprime lender. The likelihood of repayment was questionable at best, but it went on anyway.

Why is college so expensive to begin with? First, there is the lavish campus replete with things like tennis courts and other features disconnected from education. I went to the City College of New York many years ago, when it was bare bones but sported superb professors. I then went to graduate school at Cornell. I loved it and still love going back. The campus is beautiful, and seeing the Finger Lakes and hearing the chimes is a great pleasure. But the fact is that the land on which Cornell is situated and the buildings are worth a fortune, and the pleasure I got from this did not address the fact that professors are essential to a university and the rest is marketing to get students to spend their borrowed money there rather than elsewhere. Columbia University is in Manhattan, some of the most expensive real estate in the world. If it sold its facilities there and moved to let’s say Queens, with the money placed in a trust, it could lower the cost of tuition dramatically.

The university has become a central part of the social crisis demanding fealty to values rather than inviting debate over those values. But that’s a discussion for a later date. The student loan crisis is the result of a major institution running out of control with the tacit permission of the government. This was partly political in that borrowers had parents, and parents voted. But there was a deeper problem: The experts running the student loan system focused on the benefits of education without measuring the costs. Those charged with charting the development of the economy had as their constituency banks, which, of course, love loans.

The basic argument in my book is that technocracy is built on experts, and that experts, while necessary, tend to have a narrow focus. To lack generalists is to lack common sense, and a lack of common sense gave us another train wreck, one that will end with a transformation of how government works.

It should be noted that the systemic shifts of the past required major wars to compel change. All were existential in the sense that the republic was at stake. The war in Ukraine does not have that much weight for the United States. With only three prior institutional shifts, we don’t have enough examples to be certain war is required. Or there is a nasty one coming.

The Case for

a New American Civil War

By Dmitry Orlov on September 06, 2022 
Published at Club Orlov • Here and Here 
Republished at The Vineyard of the Saker • Here

Will the USA hold together through 2024? Earlier this year Covid-related complications took the life of Vladimir Zhirinovsky, the bombastic perennial leader of Russia’s Liberal Democratic Party. He was known not just for his inimitable oratory but also for the uncanny accuracy of his predictions. For example, he predicted the start of Russia’s Special Military Operation in the Ukraine almost to the day—months before the fact and at a time when nobody else had much of a clue as to what would happen. Another prediction of his reads as follows: “There won’t be a US presidential election in 2024 because there will no longer be a United States.” Will he turn out to be prescient on this count too? Let’s watch!

Zhirinovsky is by no means alone with making such a prediction. Recent opinion polls show over 40% of Americans expressing apprehensions that a new civil war is likely to break out over the next decade or so. Perish the thought that the good people surveyed had performed an independent analysis, based on which they were able to compute the probability of a civil war! By now, the vast majority of the people in the US have been conditioned to perceive reality as a mosaic composed of short news clips, sound bites, scenes no longer than can fit between two television commercials and miniature narratives that present this or that imaginary object in a positive or a negative light. They think that a civil war is likely because that’s what they have been told through mass media or the invisibly yet relentlessly chaperoned social media.

The oligarchy, which controls all of the above, is toying with two alternative business plans. Plan A, which is more profitable and less risky, doesn’t feature a civil war while Plan B, risky though still profitable, does. In either case, the profits accrue from confiscating wealth from the population; with Plan A, less of that wealth gets blown up, hence more profit. But Plan A requires securing complete obedience and docility from an increasingly distressed and restive population. Paraphrasing Klaus Schwab, they have to put up with having nothing and pretend to be happy (as a condition for being allowed to stay indoors and fed).

To keep the US population at bay, the oligarchy must keep it supplied with vast quantities of junk food, liquor, drugs and pornography. And in spite of all the propaganda urging people to sort themselves into a rainbow of genders, most of them sterile, some women may still manage to get pregnant, refuse to have an abortion and actually give birth to children, preventing the population from shrinking as fast as the dwindling resource base. “Listen, women are getting pregnant every day in America, and this is a real issue,” quoth VP Kamala Harris. In spite of the politically incorrect term “women”—wombed men, that is—her message is crystal clear: her fellow-Americans should be spayed and neutered like the proper domestic animals she thinks they are. Your pets aren’t sterilized, don’t you now; they are transgender! Doesn’t that sound much more fashionable?

But what if the junk food, liquor, drug and pornography pipelines run dry up faster than the population can be whittled away using LGBT propaganda and free and plentiful abortions? Then it would be time for Plan B, where Americans get to shoot at each other using all of the small arms in their possession. A combination of Plans A and B is also theoretically possible, where the blue, democrat states are kept placated and pacified, and in fear of the red, republican states, where civil war rages and corpses litter the roadsides while, in turn, the red state denizens are kept deathly afraid of wandering into blue territory for fear of having their children castrated and their sacred guns confiscated. But such a precarious balance may be hard to strike and a far more likely scenario is one of stable disorder, where the oligarchy pools its most valuable human resources into a few well-defended enclaves while allowing the rest of the populace to succumb to internecine strife.

But neither Plan A, nor Plan B can address a major looming problem: how to discharge (cancel, that is, rather than fulfill) the responsibilities of the US federal government. The major ones are Social Security, SSI, Medicare and defense. Roughly half of US households receives significant financial help from the federal government while defense is the largest welfare program the world has ever witnessed. The US federal debt is already astronomic and amounts to roughly half of the world’s GDP. If it were a physical object, it would be plainly visible from outer space with the naked eye. It is still growing by leaps and bounds, with the 2022 budget deficit forecast to exceed $1 trillion, down from around $2 trillion the previous two years, but still a staggering amount.

How long this financial farce can continue is anyone’s guess, but with all the major creditor nations now in a race to sell off their US debt holdings, the writing is plainly on the wall. How to shed the twin burdens of foreign creditors and domestic dependents? Here, having a civil war that sacks Washington, DC and disbands the federal government would be most efficacious. Whatever local political structures remain would repudiate the federal debt as onerous and utterly preposterous and refuse to take over federal defense spending and social support programs; problem solved!

Joe Biden seems to be thinking along these lines already. In a recent speech in Philadelphia, he said: “For those brave right-wing Americans… if you want to fight against the country, you need an F-15. You need something little more than a gun.” Does he, with his son Hunter, have some F-15s they would like to sell to those brave right-wing Americans? Note that he mentioned F-15s, not F-35s: he’d like to furnish ancient yet effective, combat-ready aircraft for performing bombing runs against the US capital, not gold-plated, bug-riddled, never-quite-ready-for-combat boondoggles like the F-35. But before Washington, DC is ready to be struck from the political map, some major looting has to take place, via a major bout of political corruption.

The Ukraine, which has been Joe and Hunter Biden’s personal playground for years now, has been used as the main money-laundering hub. Of the over $10 billion the Biden administration has spent on the Ukraine so far, very little has actually made it to the Ukraine; the rest was used to line some pocket or some political campaign coffer or other right in the US. Of the weapons that did make it to the Ukraine, at least a third was sold on the international black market by the Kiev junta.

Even the weapons that did make it to the frontlines are being briskly traded away by foreign mercenaries and shipped off to parts unknown. The bits of it that do filter through to the troops get blown up or taken as trophies by the relentlessly (though very slowly and carefully) advancing Russians. Over the course of the Special Operation, the Russians have amassed quite a treasure trove of hugely expensive yet rather ineffectual, overcomplicated and quite fragile weapons systems that cannot be maintained in the field and were abandoned by retreating Ukrainians.

Another major bit of extra income has come from the sale of a major portion of the Strategic Petroleum Reserve to China and other foreign nations: 300 million of the 700 million barrels have now been sold and the SPR now stands at its lowest level in 40 years. This is an interesting result, given that the shale oil bonanza peaked in 2019 and, with the drilling now concentrated in a single patch of the Permian Basin, and that, given very high depletion rates, it is set to be reduced to a trickle in as little as 2 or 3 years. Although fact checkers from fake news media outlets have cried foul, entities associated with Hunter Biden are said to have been involved.

Of course, we’ll never find out the full details because Hunter Biden is magic, having been placed far above the law: if he gets away with pedophilia, drug dealing, transporting hookers against state lines and other such crimes, then what’s a little (or a lot of) white-collar crime between fellow-crooks? Not to be outdone by his son, Biden-père and the rest of the democrat establishment appear poised to steal the midterm congressional elections in the most obvious and blatant way possible, making it impossible to continue to claim that the US is still any sort of democracy at all. Once the message that democracy is dead and that Washington is a den of thieves has been drummed into everyone’s heads, the path will be cleared for the opening salvos of Plan B.

But what if those “brave, right-wing Americans” on whom Biden seems to pin his hopes don’t come through and Plan B peters out with a whimper rather than go off with a bang? What if they just sit around in bars blubbering into their beers, then go home and polish their guns? Well, don’t expect the Russians or the Chinese to help! They could put the US out of its misery—but they won’t. The Russians are all stocked up on sunflower seeds (their choice over popcorn); likewise, the Chinese have stacked away plenty of rice chips. They will sit back and watch this pan-Eurasian celebration of Schadenfreude, not lifting a finger to help.

END