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https://www.truthdig.com/articles/the-permanent-lie-our-deadliest-threat/

The Permanent Lie, Our Deadliest Threat

The most ominous danger we face does not come from the eradication of free speech through the obliteration of net neutrality or through Google algorithms that steer people away from dissident, left-wing, progressive or anti-war sites. It does not come from a tax bill that abandons all pretense of fiscal responsibility to enrich corporations and oligarchs and prepares the way to dismantle programs such as Social Security. It does not come from the opening of public land to the mining and fossil fuel industry, the acceleration of ecocide by demolishing environmental regulations, or the destruction of public education. It does not come from the squandering of federal dollars on a bloated military as the country collapses or the use of the systems of domestic security to criminalize dissent. The most ominous danger we face comes from the marginalization and destruction of institutions, including the courts, academia, legislative bodies, cultural organizations and the press, that once ensured that civil discourse was rooted in reality and fact, helped us distinguish lies from truth and facilitated justice.

Donald Trump and today’s Republican Party represent the last stage in the emergence of corporate totalitarianism. Pillage and oppression are justified by the permanent lie. The permanent lie is different from the falsehoods and half-truths uttered by politicians such as Bill Clinton, George W. Bush and Barack Obama. The common political lie these politicians employed was not designed to cancel out reality. It was a form of manipulation. Clinton, when he signed into law the North American Free Trade Agreement, promised “NAFTA means jobs, American jobs and good-paying American jobs.” George W. Bush justified the invasion of Iraq because Saddam Hussein supposedly possessed weapons of mass destruction. But Clinton did not continue to pretend that NAFTA was beneficial to the working class when reality proved otherwise. Bush did not pretend that Iraq had weapons of mass destruction once none were found.

The permanent lie is not circumscribed by reality. It is perpetuated even in the face of overwhelming evidence that discredits it. It is irrational. Those who speak in the language of truth and fact are attacked as liars, traitors and purveyors of “fake news.” They are banished from the public sphere once totalitarian elites accrue sufficient power, a power now granted to them with the revoking of net neutrality. The iron refusal by those who engage in the permanent lie to acknowledge reality, no matter how transparent reality becomes, creates a collective psychosis.

“The result of a consistent and total substitution of lies for factual truth is not that the lie will now be accepted as truth and truth be defamed as a lie, but that the sense by which we take our bearings in the real world—and the category of truth versus falsehood is among the mental means to this end—is being destroyed,” Hannah Arendt wrote in “The Origins of Totalitarianism.”

The permanent lie turns political discourse into absurdist theater. Donald Trump, who lies about the size of his inauguration crowd despite photographic evidence, insists that in regard to his personal finances he is “going to get killed” by a tax bill that actually will save him and his heirs over $1 billion. Treasury Secretary Steven Mnuchin claims he has a report that proves that the tax cuts will pay for themselves and will not increase the deficit—only there never was a report. Sen. John Cornyn assures us, countering all factual evidence, that “this is not a bill that is designed primarily to benefit the wealthy and the large businesses.”

Two million acres of public land, meanwhile, are handed over to the mining and fossil fuel industry as Trump insists the transfer means that “public lands will once again be for public use.” When environmentalists denounce the transfer as a theft, Rep. Rob Bishop calls their criticism “a false narrative.”

FCC Chairman Ajit Pai, after ending net neutrality, effectively killing free speech on the internet, says, “[T]hose who’ve said the internet as we know it is about to end have been proven wrong. … We have a free internet going forward.” And at the Centers for Disease Control and Prevention, phrases such as “evidence-based” and “science-based” are banned.

The permanent lie is the apotheosis of totalitarianism. It no longer matters what is true. It matters only what is “correct.” Federal courts are being stacked with imbecilic and incompetent judges who serve the “correct” ideology of corporatism and the rigid social mores of the Christian right. They hold reality, including science and the rule of law, in contempt. They seek to banish those who live in a reality-based world defined by intellectual and moral autonomy. Totalitarian rule always elevates the brutal and the stupid. These reigning idiots have no genuine political philosophy or goals. They use clichés and slogans, most of which are absurd and contradictory, to justify their greed and lust for power. This is as true on the Christian right, which is filling the ideological vacuum of the Trump administration, as it is for the corporatists that preach neoliberalism and globalization. The merger of the corporatists with the Christian right is the marrying of Godzilla to Frankenstein.

“The venal political figures need not even comprehend the social and political consequences of their behavior,” psychiatrist Joost A.M. Meerloo wrote in “The Rape of the Mind: The Psychology of Thought Control, Menticide, and Brainwashing.” “They are compelled not by ideological belief, no matter how much they may rationalize to convince themselves they are, but by the distortions of their own personalities. They are not motivated by their advertised urge to serve their country or mankind, but rather by an overwhelming need and compulsion to satisfy the cravings of their own pathological character structures. The ideologies they spout are not real goals; they are the cynical devices by which these sick men hope to achieve some personal sense of worth and power. Subtle inner lies seduce them into going from bad to worse. Defensive self-deception, arrested insight, evasion of emotional identification with others, degradation of empathy—the mind has many defense mechanisms with which to blind the conscience.”

When reality is replaced by the whims of opinion and expediency, what is true one day often becomes false the next. Consistency is discarded. Complexity, nuance, depth and profundity are replaced with the simpleton’s belief in threats and force. This is why the Trump administration disdains diplomacy and is dynamiting the State Department. Totalitarianism, wrote novelist and social critic Thomas Mann, is at its core the desire for a simple folktale. Once this folktale replaces reality, morality and ethics are abolished.

“Those who can make you believe absurdities can make you commit atrocities,” Voltaire warned.

The corporate elites, who even in the best of times stacked the deck against people of color, the poor and the working class, no longer play by any rules. Their lobbyists, bought-and-paid-for politicians, pliant academics, corrupt judges and television news celebrities run a kleptocratic state defined by legalized bribery and unchecked exploitation. The corporate elites write laws, regulations and bills to expand corporate looting and plunder while imposing a crippling debt peonage on the public, including college graduates burdened by huge loans. They ram through austerity measures that dismantle state and municipal services, often forcing them to be sold off to corporations, and slash social programs, including public education and health care. They insist, however, that when we have grievances we rely on the institutions they have debased and corrupted. They ask us to invest our energy and time in fixed political campaigns, petition elected representatives or appeal to the courts. They seek to lure us into their schizophrenic world, where rational discourse is pitted against gibberish. They demand we seek justice in a system designed to perpetuate injustice. It is a game we can never win.

“Thus all our dignity consist in thought,” wrote Pascal. “It is on thought that we must depend for our recovery, not on space and time, which we could never fill. Let us then strive to think well; that is the basic principle of morality.”

We must pit power against power. We must build parallel institutions and organizations that protect us from corporate assault and resist corporate domination. We must sever ourselves as much as possible from the vampire state. The more we can create self-contained communities, with our own currencies and infrastructures, the more we can starve and cripple the corporate beast. This means establishing worker-run cooperatives, local systems of food supply based on a vegan diet and independent artistic, cultural and political organizations. It means obstructing in every way possible the corporate assault, including the blocking of pipelines and fracking sites, and taking to the streets in sustained acts of civil disobedience against censorship and the attack on civil liberties. And it means creating sanctuary cities. All of this will have to be done the way it has always been done, by building personal, face-to-face relationships. We may not ultimately save ourselves, especially with the refusal by the elites to address the ravages of climate change, but we can create pods of resistance where truth, beauty, empathy and justice endure.

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https://www.oftwominds.com/blog.html

Here's What We've Lost in the Past Decade

The past decade of "recovery" and "growth" has actually been a decade of catastrophic losses for our society and nation. Here's a short list of what we've lost:

1. Functioning markets. Free markets discover price and assess risk. What passes for markets now are little more than signaling devices to convince us the economy is doing spectacularly well. It is doing spectacularly well, but only for the top .1% of 1% and the class of managerial/technocrat flunkies and apologists who serve the interests of the top .1%.

2. Genuine Virtue. Parading around a slogan or online accusation, "liking" others in whatever echo-chamber tribe the virtue-signaler is seeking validation in, and other cost-free gestures--now signals virtue. Genuine virtue--sacrificing the support of one's tribe for principles that require skin in the game--has disappeared from the public sphere and the culture.

3. Civility. As Scientific American reported in its February issue (The Tribalism of Truth), the incentive structure of largely digital "tribes" rewards the most virulent, the most outrageous, the least reasonable and the most vindictive of the tribe with "likes" while offering little to no encouragement of restraint, caution, learning rather than shouting, etc.

The cost of gaining tribal encouragement is essentially zero, while the risk of ostracism from the tribe is high. In a society with so few positive social structures, the self-referentially toxic digital tribe may be the primary social structure for atomized "consumers" in a dysfunctional system dominated by a rigged "market" and a central state that no longer needs the consent of the governed.

Common ground, civility, the willingness to listen and learn--all lost.

4. Trust. Few find reason to trust corporations, the corporate media, the tech monopolies or the government. This distrust is reasonable, given these institutions have squandered the public trust to protect the swag being skimmed by insiders and elites.

Rather than earn our trust with true transparency and accurate reporting of data, these institutions spew a false form of transparency that's doubly opaque, as it's rigged to mask the skims of the insiders. Transparency: lost. Accountability: lost.

Do you really trust Facebook, Google, and the agencies that are supposed to provide oversight of these monopolies? If you said, "yes," you're joking, right?

5. Social mobility for the masses. You've undoubtedly read reports about the stagnation of wages for the bottom 90% and the soaring wealth and income of the top 5%, which is concentrated in the top .1%. The old adage--go to college, you'll be guaranteed a secure, well-paying job-- no longer works, as we've over-produced elites (college graduates) for decades.

Starting your own business was once a ladder of social mobility, but the layers of bureaucratic costs and compliance are now so heavy that few have the resources or appetite for risk to start a business.

The only business model that's worth trying now is to start a digital company that can be sold for a couple of million dollars to a tech monopoly (Microsoft, Google, Facebook, etc.) within a matter of months, two years max. By that time, some corporate behemoth will have purchased a competitor and eaten your lunch.

6. Federal law enforcement and national security agencies that were above partisan politics. Now these agencies and their leadership are nothing but political agendas hiding behind a long-extinct reputation for apolitical professionalism. The political impact now guides what's made public, and how that "information" is gamed, spun or fabricated to drive a political agenda.

7. A democratizing Internet. A handful of corporate cartels and quasi-monopolies now control what we see in web searches, news feeds, our "friends" postings, and what's available on user-generated content networks such as YouTube. Under the banner of "fake news" and "hate speech," mass surveillance and censorship are now the status quo.

8. National purpose. Arguably lost long ago, but the loss has become painfully apparent in the past decade. Does anyone still think the Empire is spreading freedom and liberty? Everyone can see that what we're spreading is destruction and disorder.

The society and culture have degraded to an abject worship of greed and private gain. The "national purpose" is to maximize one's personal gain by whatever means are available, including fraud, racketeering, embezzlement, lying, cover-ups, punishing whistleblowers, gaming the system to maximize overtime, etc.

The rationalization is always the same: everyone else is doing it.

Here's a shorthand way to summarize America's "purpose" now: a medication that costs $8 per vial in Europe costs $38,892 in the U.S.

9. Perspectives on entitlement. Everyone's entitled to everything now--to sex, a secure income, the "right" to abuse/accuse online without restraint or blowback, the "right" to demand everyone treat you in whatever way you reckon is your "right," and so on in an infinite expansion of entitlements that require no sacrifice, virtue or even civility of the entitled.

10. Humility. How often do you find someone who publicly expresses caution about their own righteousness, or presents a healthy hesitation about the rightness of their positions, i.e. that they might be wrong? How many are publicly skeptical of their own views and not just of everyone else's views? How many admit to having a poor understanding of complex issues?

The confidence and hubris of those directing the rest of us to race off the cliff while they watch from a safe distance is off the charts.

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https://caitlinjohnstone.com/2018/07/28/in-refusing-to-defend-assange-mainstream-media-exposes-its-true-nature/

In Refusing To Defend Assange, Mainstream Media Exposes Its True Nature

Last Tuesday a top lawyer for the New York Times named David McCraw warned a room full of judges that the prosecution of Julian Assange for WikiLeaks publications would set a very dangerous precedent which would end up hurting mainstream news media outlets like NYT, the Washington Post, and other outlets which publish secret government documents.

“I think the prosecution of him would be a very, very bad precedent for publishers,” McCraw said. “From that incident, from everything I know, he’s sort of in a classic publisher’s position and I think the law would have a very hard time drawing a distinction between The New York Times and WikiLeaks.”

Do you know where I read about this? Not in the New York Times.

“Curiously, as of this writing, McCraw’s words have found no mention in the Times itself,” activist Ray McGovern wrote for the alternative media outlet Consortium News. “In recent years, the newspaper has shown a marked proclivity to avoid printing anything that might risk its front row seat at the government trough.”

So let’s unpack that a bit. It is now public knowledge that the Ecuadorian government is actively seeking to turn Assange over to be arrested by the British government. This was initially reported by RT, then independently confirmed by The Intercept, and is today full mainstream public knowledge being reported by mainstream outlets like CNN. It is also public knowledge that Assange’s asylum was granted by the Ecuadorian government due to a feared attempt to extradite him to the United States and prosecute him for WikiLeaks publications. Everyone from President Donald Trump to Attorney General Jeff Sessions to now-Secretary of State Mike Pompeo to ranking House Intelligence Committee member Adam Schiff to Democratic members of the US Senate have made public statements clearly indicating that there is a US government interest in getting Assange out of the shelter of political asylum and into prison.

The New York Times is aware of this, and as evidenced by McCraw’s comments it is also aware of the dangerous precedent that such a prosecution would set for all news media publications. The New York Times editorial staff are aware that the US government prosecuting a publisher for publishing important documents that had been hidden from the public would make it impossible for the Times to publish the same kind of material without fear of the same legal repercussions. It is aware that the maneuvers being taken against Assange present a very real existential threat to the possibility of real journalism and holding power to account.

You might think, therefore, that we’d be seeing a flood of analyses and op-eds from the New York Times aggressively condemning any movement toward the prosecution of Julian Assange. You might expect all media outlets in America to be constantly sounding the alarm about this, especially since the threat is coming from the Trump administration, which outlets like the New York Times are always eager to circulate dire warnings about. You might expect every talking head on CNN and NBC to be ominously citing Assange as the clearest and most egregious case yet of Trump’s infamous “war on the free press”. Leaving aside the issues of morality, compassion and human rights that come with Assange’s case, you might think that if for no other reason than sheer unenlightened self interest they’d be loudly and aggressively defending him.

And yet, they don’t. And the fact that they don’t shows us what they really are.

Theoretically, journalism is meant to help create an informed populace and hold power to account. That’s why it’s the only profession explicitly named in the United States Constitution, and why freedom of the press has enjoyed such constitutional protections throughout US history. The press today is failing to protect Julian Assange because it has no intention of creating an informed populace or holding power to account.

This is not to suggest the existence of some grand, secret conspiracy among US journalists. It’s just a simple fact that plutocrats own most of the US news media and hire the people who run it, which has naturally created an environment where the best way to advance one’s career is to remain perpetually inoffensive to the establishment upon which plutocrats have built their respective empires. This is why you see ambitious reporters on Twitter falling all over themselves to be the first with a pithy line that advances establishment agendas whenever breaking news presents an opportunity to do so; they are aware that their social media presence is being assessed by potential employers and allies for establishment loyalism. This also why so many of those aspiring journalists attack Assange and WikiLeaks whenever possible.

“Everyone hoping to gain admission to the cultural elite must now strenuously cultivate their social media so as to avoid controversy,” journalist Michael Tracey observed recently. “Eventually they will internalize controversy-avoidance as a virtue, not a societal imposition. Result: a more boring, conformist elite culture.”

A great way for an aspiring journalist to avoid controversy is to never, ever defend Assange or WikiLeaks on social media or in any media outlet, and certainly under no circumstances allow yourself to look like the sort of journo who might someday publish the sorts of materials that WikiLeaks publishes. An excellent way to prove yourself is to become yet another author of yet another one of the many, many smear pieces that have been written about Assange and WikiLeaks.

Mainstream media outlets and those who thrive within them have no intention of rocking the boat and losing their hard-earned privilege and access. Conservative mass media will continue to defend the US president, and liberal media will continue to defend the CIA and the FBI. Both will help advance war, ecocide, military expansionism, surveillance and police militarization, and none will leak anything that is damaging to the power structures that they have learned to serve. They will remain innocuous, uncontroversial defenders of the rich and powerful at all times.

Meanwhile, alternative media outlets are defending Assange ferociously. Just today I’ve seen articles from Consortium News, World Socialist Website, Disobedient Media, Antiwar and Common Dreams decrying the persecution of the most important government transparency advocate living today. Alternative media outlets and independent writers aren’t bound by establishment servitude, so the value of WikiLeaks is clear as day. One’s eyes are only blinded to the pernicious behaviors of power when power is signing one’s paycheck.

Mass media outlets in America and around the world have fully discredited themselves with their failure to defend a publisher who actually holds power to account and brings facts into the light of truth to create an informed populace. Every day that goes by where they don’t unequivocally condemn any attempt to prosecute Assange is another day in the pile of evidence that corporate media outlets serve power and not truth. Their silence is a tacit admission that they are nothing other than stenographers and propagandists for the most powerful forces on earth.

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http://www.informationclearinghouse.info/49914.htm

The All-Pervasive Military/Security Complex

The article below by Professor Joan Roelofs is long but it's very important and is worth a careful read. It shows that the military/security complex has woven itself so tightly into the American social, economic, and political fabric as to be untouchable. President Trump is an extremely brave or foolhearty person to take on this most powerful and pervasive of all US institutions by trying to normalize US relations with Russia, chosen by the military/security complex as the “enemy” that justifies its enormous budget and power.

In 1961 President Eisenhower in his last public address to the American people warned us about the danger to democracy and accountable government presented by the military/industrial complex. You can imagine how much stronger the complex is 57 years later after decades of Cold War with the Soviet Union.

The Russian government, Russian media, and Russian people desperately need to comprehend how powerful the US military/security complex is and how it is woven into the fabric of America. No amount of diplomacy by Lavrov and masterful chess playing by Putin can possibly shake the control over the United States exercised by the military/security complex.

Professor Roelofs has done a good deed for the American people and for the world in assembling such extensive information documenting the penetration into every aspect of American life of the military/security complex. It is a delusion that a mere President of the United States can bring such a powerfull, all-pervasive institution to heel and deprive it of its necessary enemy.

The Political Economy of the Weapons Industry

Guess Who’s Sleeping With Our Insecurity Blanket?

By Joan Roelofs

For many people the “military-industrial-complex (MIC)” brings to mind the top twenty weapons manufacturers. President Dwight Eisenhower, who warned about it in 1961, wanted to call it the military- industrial-congressional-complex, but decided it was not prudent to do so. Today it might well be called the military-industrial-congressional-almost-everything-complex. Most departments and levels of government, businesses, and also many charities, social service, environmental, and cultural organizations, are deeply embedded with the military.

The weapons industry may be spearheading the military budget and military operations; it is aided immensely by the cheering or silence of citizens and their representatives. Here we will provide some likely reasons for that assent. We will use the common typology of three national sectors: government, business, and nonprofit, with varying amounts of interaction among them. This does not preclude, though it masks somewhat, the proposition that government is the executive of the ruling class.

Every kind of business figures in the Department of Defense (DoD) budget. Lockheed is currently the largest contractor in the weapons business. It connects with the worldwide MIC by sourcing parts, for example, for the F-35 fighter plane, from many countries. This helps a lot to market the weapon, despite its low opinion among military experts as well as anti-military critics. Lockheed also does civilian work, which enhances its aura while it spreads its values.

Other types of businesses have enormous multi-year contracts—in the billions. This despite the constitutional proviso that Congress not appropriate military funds for more than a two year term. Notable are the construction companies, such as Fluor, KBR, Bechtel, and Hensel Phelps. These build huge bases, often with high tech surveillance or operational capacity, in the US and abroad, where they hire locals or commonly, third country nationals to carry out the work. There are also billion-funded contractors in communications technology, intelligence analysis, transportation, logistics, food, and clothing. “Contracting out” is our modern military way; this also spreads its influence far and wide.

Medium, small, and tiny businesses dangle from the “Christmas tree” of the Pentagon, promoting popular cheering or silence on the military budget. These include special set-asides for minority-owned and small businesses. A Black-owned small business, KEPA-TCI (construction), received contracts for $356 million. [Data comes from several sources, available free on the internet: websites, tax forms, and annual reports of organizations; usaspending.gov (USA) and governmentcontractswon.com (GCW).] Major corporations of all types serving our services have been excellently described in Nick Turse’s The Complex. Really small and tiny businesses are drawn into the system: landscapers, dry cleaners, child care centers, and Come- Bye Goose Control of Maryland.

Among the businesses with large DoD contracts are book publishers: McGraw-Hill, Greenwood, Scholastic, Pearson, Houghton Mifflin, Harcourt, Elsevier, and others. Rarely have the biases in this industry, in fiction, nonfiction, and textbook offerings, been examined. Yet the influences on this small but significant population, the reading public, and the larger schooled contingent, may help explain the silence of the literate crowd and college graduates.

Much of what is left of organized industrial labor is in weapons manufacture. Its PACs fund the few “progressive” candidates in our political system, who tend to be silent about war and the threat of nuclear annihilation. Unlike other factories, the armaments makers do not suddenly move overseas, although they do use subcontractors worldwide.

Military spending may be only about 6% of the GDP, yet it has great impact because: 1. it is a growing sector; 2. it is recession-proof; 3. it does not rely on consumer whims; 4. it is the only thing prospering in many areas; and 5. the “multiplier” effect: subcontracting, corporate purchasing, and employee spending perk up the regional economy. It is ideally suited to Keynesian remedies, because of its ready destruction and obsolescence: what isn’t consumed in warfare, rusted out, or donated to our friends still needs to be replaced by the slightly more lethal thing. Many of our science graduates work for the military directly or its contractee labs concocting these.

The military’s unbeatable weapon is jobs, and all members of Congress, and state and local officials, are aware of this. It is where well-paying jobs are found for mechanics, scientists, and engineers; even janitorial workers do well in these taxpayer-rich firms. Weaponry is also important in our manufactured goods exports as our allies are required to have equipment that meets our specifications. Governments, rebels, terrorists, pirates, and gangsters all fancy our high tech and low tech lethal devices.

Our military economy also yields a high return on investments. These benefit not only corporate executives and other rich, but many middle and working class folk, as well as churches, benevolent, and cultural organizations. The lucrative mutual funds offered by Vanguard, Fidelity, and others are heavily invested in the weapons manufacturers.

Individual investors may not know what is in their fund’s portfolios; the institutions usually know. A current project of World Beyond War (https://worldbeyondwar.org/divest) advocates divestment of military stocks in the pension funds of state and local government workers: police, firepersons, teachers, and other civil servants. Researchers are making a state-by-state analysis of these funds. Among the findings are the extensive military stock holdings of CALpers, the California Public Employees Retirement System (the sixth largest pension fund on earth), the California State Teachers Retirement System, the New York State Teachers Retirement System, the New York City Employees Retirement System, and the New York State Common Retirement Fund (state and local employees). Amazing! the New York City teachers were once the proud parents of red diaper babies.

The governmental side of the MIC complex goes far beyond the DoD. In the executive branch, Departments of State, Homeland Security, Energy, Veterans Affairs, Interior; and CIA, AID, FBI, NASA, and other agencies; are permeated with military projects and goals. Even the Department of Agriculture has a joint program with the DoD to “restore” Afghanistan by creating a dairy cattle industry. No matter that the cattle and their feed must be imported, cattle cannot graze in the terrain as the native sheep and goats can, there is no adequate transportation or refrigeration, and the Afghans don’t normally drink milk. The native animals provide yogurt, butter, and wool, and graze on the rugged slopes, but that is all so un-American.

Congress is a firm ally of the military. Campaign contributions from contractor PACs are generous, and lobbying is extensive. So also are the outlays of financial institutions, which are heavily invested in the MIC. Congresspeople have significant shares of weapons industry stocks. To clinch the deal, members of Congress (and also state and local lawmakers) are well aware of the economic importance of military con- tracts in their states and districts.

Military bases, inside the US as well as worldwide, are an economic hub for communities. The DoD Base Structure Report for Fy2015 lists more than 4,000 domestic properties. Some are bombing ranges or re- cruiting stations; perhaps 400 are bases with a major impact on their localities. The largest of these, Fort Bragg, NC, is a city unto itself, and a cultural influence as well as economic asset to its region, as so well described by Catherine Lutz in Homefront. California has about 40 bases (https://militarybases.com/by- state/), and is home to major weapons makers as well. Officers generally live off-base, so the real estate, restaurant, retail, auto repair, hotel and other businesses are prospering. Local civilians find employment on bases. Closed, unconvertible installations are sometimes tourist attractions, such as the unlikeliest of all vacation spots, the Hanford Nuclear Reservation.

DoD has direct contracts and grants with state and local governments. These are for various projects and services, including large amounts to fund the National Guard. The Army Engineers maintain swimming holes and parks, and police forces get a deal on Bearcats. JROTC programs nationwide provide funding for public schools, and even more for those that are public school military academies; six are in Chicago.

National, state and local governments are well covered by the “insecurity blanket;” the nonprofit sector is not neglected. Nevertheless, it does harbor the very small group of anti-war organizations, such as Iraq Veterans Against War, Veterans for Peace, World Beyond War, Peace Action, Union of Concerned Scientists, Center for International Policy, Catholic Worker, Answer Coalition, and others. Yet unlike the Vietnam War period there is no vocal group of religious leaders protesting war, and the few students who are politically active are more concerned with other issues.

Nonprofit organizations and institutions are involved several ways. Some are obviously partners of the MIC: Boy and Girl Scouts, Red Cross, veterans’ charities, military think-tanks such as RAND and Institute for Defense Analysis, establishment think-tanks like the American Enterprise Institute, Atlantic Council, and the flagship of US world projection, the Council on Foreign Relations. There are also many international nongovernmental organizations that assist the US government in delivering “humanitarian” assistance, sing the praises of the market economy, or attempt to repair the “collateral” damage inflicted on lands and people, for example, Mercy Corps, Open Society Institutes, and CARE.
Educational institutions in all sectors are embedded with the military. The military schools include the service academies, National Defense University, Army War College, Naval War College, Air Force Institute of Technology, Air University, Defense Acquisition University, Defense Language Institute, Naval Postgraduate School, Defense Information School, the medical school, Uniformed Services University of the Health Sciences, and the notorious School of the Americas in Fort Benning, GA, now renamed the Western Hemisphere Institute for Security Cooperation. “In addition, Senior Military Colleges offer a combination of higher education with military instruction. SMCs include Texas A&M University, Norwich University, The Virginia Military Institute, The Citadel, Virginia Polytechnic Institute and State University (Virginia Tech), University of North Georgia and the Mary Baldwin Women’s Institute for Leadership” (https://www.usa.gov/military-colleges).

A university doesn’t have to be special to be part of the MIC. Most are awash with contracts, ROTC programs, and/or military officers and contractors on their boards of trustees. A study of the 100 most militarized universities includes prestigious institutions, as well as diploma mills that produce employees for military intelligence agencies and contractors (https://news.vice.com/article/these-are-the-100- most-militarized-universities-in-america).

Major liberal foundations have long engaged in covert and overt operations to support imperial projection, described by David Horowitz as the “Sinews of Empire” in his important 1969 Ramparts article. They have been close associates of the Central Intelligence Agency, and were active in its instigation. The foundation created and supported Council on Foreign Relations has long been a link among Wall Street, large corporations, academia, the media, and our foreign and military policymakers.

Less obvious are the military connections of philanthropic, cultural, social service, environmental, and professional organizations. They are linked through donations; joint programs; sponsorship of events, exhibits, and concerts; awards (both ways); investments; boards of directors; top executives; and contracts. The data here covers approximately the last twenty years, and rounds out the reasons for the astounding support (according to the polls) that US citizens have conferred on our military, its budget, and its operations.

Military contractor philanthropy was the subject of my previous CP reports, in 2006 and 2016. Every type of nonprofit (as well as public schools and universities) received support from the major weapons manufacturers; some findings were outstanding. Minority organizations were extremely well endowed. For many years there was crucial support for the National Association for the Advancement of Colored People (NAACP) from Lockheed; Boeing also funded the Congressional Black Caucus. The former president and CEO of the NAACP, Bruce Gordon, is now on the Board of Trustees of Northrop Grumman.

General Electric is the most generous military contractor philanthropist, with direct grants to organizations and educational institutions, partnerships with both, and matching contributions made by its thousands of employees. The latter reaches many of the nongovernmental and educational entities throughout the country.

Major donors to the Carnegie Endowment for International Peace (listed in its 2016 Annual Report) include the Defense Intelligence Agency, Cisco Systems, Open Society Foundations, US Department of Defense, General Electric, North Atlantic Treaty Organization, and Lockheed Martin. This is an echo of the CEIP’s military connections reported in Horace Coon’s book of the 1930s, Money to Burn.

The DoD itself donates surplus property to organizations; among those eligible are Big Brothers/Big Sisters, Boys and Girls Clubs, Boy Scouts, Girl Scouts, Little League Baseball, and United Service Organizations. The Denton Program allows non-governmental organizations to use extra space on U.S. military cargo aircraft to transport humanitarian assistance materials.

There is a multitude of joint programs and sponsorships. Here is a small sample.
The American Association of University Women’s National Tech Savvy Program encourages girls to enter STEM (Science, Technology, Engineering and Math) careers, with sponsorship from Lockheed, BAE Systems, and Boeing. Junior Achievement, sponsored by Bechtel, United Technologies, and others, aims to train children in market-based economics and entrepreneurship. Wolf Trap Foundation for the Performing Arts is partnered with Northrop Grumman for an “early childhood STEM ‘Learning through the Arts’ initiative for pre-K and kindergarten students.” The Bechtel Foundation has two programs for a “sustainable California”— an education program to help “young people develop the knowledge, skills, and character to explore and understand the world,” and an environmental program to promote the “management, stewardship and conservation for the state’s natural resources.”

The NAACP ACT-SO is a “yearlong enrichment program designed to recruit, stimulate, and encourage high academic and cultural achievement among African-American high school students,” with sponsorship from Lockheed Martin and Northrop Grumman et al. The national winners receive financial awards from major corporations, college scholarships, internships, and apprenticeships—in the military industries.
In recent years the weapons makers have become enthusiastic environmentalists. Lockheed was a sponsor of the US Chamber of Commerce Foundation Sustainability Forum in 2013. Northrop Grumman supports Keep America Beautiful, National Public Lands Day, and a partnership with Conservation International and the Arbor Day Foundation (for forest restoration). United Technologies is the founding sponsor of the U.S. Green Building Council Center for Green Schools, and co-creator of the Sustainable Cities Design Academy. Tree Musketeers is a national youth environmental organization partnered by Northrop Grumman and Boeing.

Awards go both ways: industries give awards to nonprofits, and nonprofits awards to military industries and people. United Technologies, for its efforts in response to climate change, was on Climate A list of the Climate Disclosure Project. The Corporate Responsibility Association gave Lockheed position 8 in 2016 in its 100 Best Corporate Citizens List. Points of Light included General Electric and Raytheon in its 2014 list of the 50 Most Community-Minded Companies in America. Harold Koh, the lawyer who as Obama’s advisor defended drone strikes and intervention in Libya, was recently given distinguished visiting professor status by Phi Beta Kappa. In 2017, the Hispanic Association on Corporate Responsibility recognized 34 Young Hispanic Corporate Achievers; 3 were executives in the weapons industry. Elizabeth Amato, an executive at United Technologies, received the YWCA Women Achievers Award.

Despite laborious searching through tax form 990s, it is difficult to discover the specifics of organizations’ investments. Many have substantial ones; in 2006, the American Friends Service Committee had $3.5 million in revenue from investments. Human Rights Watch reported $3.5 million investment income on its 2015 tax form 990, and more than $107 million in endowment funds.

One of the few surveys of nonprofit policies (by Commonfund in 2012) found that only 17% of foundations used environmental, social, and governance (ESG) criteria in their investments. ESG seems to have replaced “socially responsible investing (SRI)” in investment terminology, and it has a somewhat different slant. The most common restriction is the avoidance of companies doing business in regions with conflict risk; the next relates to climate change and carbon emissions; employee diversity is also an important consideration. Commonfund’s study of charities, social service and cultural organizations reported that 70% of their sample did not consider ESG in their investment policies. Although 61% of religious organizations did employ ESG criteria, only 16% of social service organizations and 3% of cultural organizations did.

Weapon industries are hardly ever mentioned in these reports. Religious organizations sometimes still used the SRI investment screens, but the most common were alcohol, gambling, pornography, and tobacco. The Interfaith Center on Corporate Responsibility, a resource for churches, lists almost 30 issues for investment consideration, including executive compensation, climate change, and opioid crisis, but none concerning weapons or war. The United Church (UCC) advisory, a pioneer in SRI investment policies, does include a screen: only companies should be chosen which have less than 10% revenue from alcohol or gambling, 1% from tobacco, 10% from conventional weapons and 5% from nuclear weapons.

The Art Institute of Chicago states on their website that “[W]ith the fiduciary responsibility to maximize returns on investment consistent with appropriate levels of risk, the Art Institute maintains a strong presumption against divesting for social, moral, or political reasons.” Listed as an associate is Honeywell International, and a major benefactor is the Crown Family (General Dynamics), which recently donated a $2 million endowment for a Professorship in Painting and Drawing.

Nonprofit institutions (as well as individuals and pension funds of all sectors) have heavy investments in the funds of financial companies such as State Street, Vanguard, BlackRock, Fidelity, CREF, and others, which have portfolios rich in military industries (https://worldbeyondwar.org/wp- content/uploads/2016/11/indirect.pdf). These include information technology firms, which, although often regarded as “socially responsible,” are among the major DoD contractors.

In recent years foundations and other large nonprofits, such as universities, have favored investments in hedge funds, real estate, derivatives, and private equity. The Carnegie Endowment, more “transparent” than most, lists such funds on its 2015 tax form 990 (Schedule D Part VII). It is unlikely that Lockheed, Boeing, et al, are among the distressed debt bonanzas, so these institutions may be low on weapons stock. Nevertheless, most of them have firm connections to the MIC through donations, leadership, and/or contracts.

Close association with the military among nonprofit board members and executives works to keep the lid on anti-war activities and expression. The Aspen Institute is a think-tank that has resident experts, and also a policy of convening with activists, such as anti-poverty community leaders. Its Board of Trustees is chaired by James Crown, who is also a director of General Dynamics. Among other board members are Madeleine Albright, Condoleezza Rice, Javier Solana (former Secretary-General of NATO), and former Congresswoman Jane Harman. Harman “received the Defense Department Medal for Distinguished Service in 1998, the CIA Seal Medal in 2007, and the CIA Director’s Award and the National Intelligence Distinguished Public Service Medal in 2011. She is currently a member of the Director of National Intelligence’s Senior Advisory Group, the Trilateral Commission and the Council on Foreign Relations.” Lifetime Aspen Trustees include Lester Crown and Henry Kissinger.

In recent years, the Carnegie Corporation board of trustees included Condoleezza Rice and General Lloyd Austin III (Ret.), Commander of CENTCOM, a leader in the 2003 invasion of Iraq, and also a board member of United Technologies. A former president of Physicians for Peace (not the similarly named well-known group) is Rear Admiral Harold Bernsen, formerly Commander of the US Middle East Force and not a physician.

TIAA, the college teachers’ retirement fund, had a CEO from 1993-2002, John H. Biggs, who was at the same time a director of Boeing. TIAA’s current board of directors includes an associate of a major military research firm, MITRE Corporations, and several members of the Council on Foreign Relations. Its senior executive Vice President, Rahul Merchant, is currently also a director at two information technology firms that have large military contracts: Juniper Networks and AASKI.

The American Association of Retired Persons’ chief lobbyist from 2002-2007, Chris Hansen, had previously served in that capacity at Boeing. The current VP of communications at Northrop Grumman, Lisa Davis, held that position at AARP from 1996-2005.

Board members and CEOs of the major weapons corporations serve on the boards of many nonprofits. Just to indicate the scope, these include the National Fish and Wildlife Foundation, Newman’s Own Foundation, New York Public Library, Carnegie Hall Society, Conservation International, Wolf Trap Foundation, WGBH, Boy Scouts, Newport Festival Foundation, Toys for Tots, STEM organizations, Catalyst, the National Science Center, the US Institute of Peace, and many foundations and universities.

The DoD promotes the employment of retired military officers as board members or CEOs of nonprofits, and several organizations and degree programs further this transition. U.S. Air Force Brigadier General Eden Murrie (Ret.) is now Director of Government Transformation and Agency Partnerships at the nonprofit Partnership for Public Service. She maintains that “[F]ormer military leaders have direct leadership experience and bring talent and integrity that could be applied in a nonprofit organization. . .” (seniormilitaryintransition.com/tag/eden-murrie/). Given the early retirement age, former military personnel (and reservists) are a natural fit for positions of influence in federal, state, and local governments, school boards, nonprofits, and volunteer work; many are in those places.
Perhaps the coziest relationships under the insecurity blanket are the multitudes of contracts and grants the Department of Defense tenders to the nonprofit world. DoD fiscal reporting is notoriously inaccurate, and there were conflicting accounts between and within the online databases. Nevertheless, even a fuzzy picture gives a good idea of the depth and scope of the coverage.

From the TNC 2016 Annual Report: “The Nature Conservancy is an organization that takes care of people and land, and they look for opportunities to partner. They’re nonpolitical. We need nongovernment organizations like TNC to help mobilize our citizens. They are on the ground. They understand the people, the politics, the partnerships. We need groups like TNC to subsidize what government organizations can’t do” (Mamie Parker, Former Assistant Director, U.S. Fish and Wildlife Service and Arkansas Trustee, The Nature Conservancy).

Among the subsidies going the other way are 44 DoD contracts with TNC totaling several million for the years 2008-2018 (USA). These are for such services as Prairie Habitat Reforestation, $100,000, and Runway and Biosecurity upkeep at Palmyra Atoll, HI, $82,000 (USA). For the years 2000-2016, GCW lists a total of $5,500,000 in TNC’s DoD contracts.

Grants to TNC for specific projects, not clearly different from contracts, were much larger. Each is listed separately (USA); a rough count of the total was more than $150 million. One $55 million grant was for “Army compatible use buffer (acubs) in vicinity of Fort Benning military installation.” Similar grants, the largest, $14 million, were for this service at other bases. Another was for the implementation of Fort Benning army installation’s ecological monitoring plan. Included in the description of these grants was the notice: “Assist State and local governments to mitigate or prevent incompatible civilian land use/activity that is likely to impair the continued operational utility of a Department of Defense (DoD) military installation. Grantees and participating governments are expected to adopt and implement the study recommendations.”

TNC’s Form 990 for 2017 states its investment income as $21 million. It reported government grants of $108.5 million, and government contracts of $9 million. These may include funds from state and local as well as all departments of the federal government. The Department of the Interior, which manages the vast lands used for bombing ranges and live ammunition war games, is another TNC grantor.

Other environmental organizations sustained by DoD contracts are the National Audubon Society ($945,000 for 6 years, GCW), and Point Reyes Bird Observatory ($145,000, 6 years, GCW). USA reports contracts with Stichting Deltares, a Dutch coastal research institute, for $550,000 in 2016, grants to the San Diego Zoo of $367,000, and to the Institute for Wildlife Studies, $1.3 million for shrike monitoring.

Goodwill Industries (training and employing the disabled, ex-offenders, veterans, and homeless people) is an enormous military contractor. Each entity is a separate corporation, based on state or region, and the total receipt is in the billions. For example, for 2000-2016 (GCW), Goodwill of South Florida had $434 million and Southeastern Wisconsin $906 million in contracts. Goods and services provided include food and logistics support, records processing, army combat pants, custodial, security, mowing, and recycling. Similar organizations working for the DoD include the Jewish Vocational Service and Community Workshop, janitorial services, $12 million over 5 years; Lighthouse for the Blind, $4.5 million, water purification equipment; Ability One; National Institute for the Blind; Pride Industries; and Melwood Horticultural Training Center.

The DoD does not shun the work of Federal Prison Industries, which sells furniture and other products. A government corporation (and thus not a nonprofit), it had half a billion in sales to all federal departments in 2016. Prison labor, Goodwill Industries, and other sheltered-workshop enterprises, along with for- profits employing immigrant workers, teenagers, retirees, and migrant workers (who grow food for the military and the rest of us), reveal the evolving nature of the US working class, and some explanation for its lack of revolutionary fervor, or even mild dissent from the capitalist system.

The well-paid, and truly diverse employees (including executives) of major weapons makers are also not about to construct wooden barricades. Boards of directors in these industries are welcoming to minorities and women. The CEOs of Lockheed and General Dynamics are women, as is the Chief Operating Officer of Northrop Grumman. These success stories reinforce personal aspirations among the have-nots, rather than questioning the system.

Contracts with universities, hospitals, and medical facilities are too numerous to detail here; one that illustrates how far the blanket stretches is with Oxford University, $800,000 for medical research. Professional associations with significant contracts include the Institute of International Education, American Council on Education, American Association of State Colleges and Universities, National Academy of Sciences, Society of Women Engineers, American Indian Science and Engineering Society, American Association of Nurse Anesthetists, Society of Mexican-American Engineers, and U.S. Green Building Council. The Council of State Governments (a nonprofit policy association of officials) received a $193,000 contract for “preparedness” work. Let us hope we are well prepared.

The leaders, staff, members, donors, and volunteers of nonprofit organizations are the kind of people who might have been peace activists, yet so many are smothered into silence under the vast insecurity blanket. In addition to all the direct and indirect beneficiaries of the military establishment, many people with no connection still cheer it on. They have been subject to relentless propaganda forthe military and its wars from the government, the print and digital press, TV, movies, sports shows, parades, and computer games—the latter teach children that killing is fun.

The indoctrination goes down easily. It has had a head start in the educational system that glorifies the violent history of the nation. Our schools are full of in-house tutoring, STEM programs, and fun robotics teams personally conducted by employees of the weapons makers. Young children may not understand all the connections, but they tend to remember the logos. The JROTC programs, imparting militaristic values, enroll far more children than the ones who will become future officers. The extremely well-funded recruitment efforts in schools include “fun” simulations of warfare.

There is a worldwide supporting cast for the complex that includes NATO, other alliances, defense ministries, foreign military industries, and bases, but that is a story for another day.

The millions sheltered under our thick and broad blanket, including the enlistees under the prickly part of it, are not to blame. Some people may be thrilled by the idea of death and destruction. However, most are just trying to earn a living, keep their organization or rust belt afloat, or be accepted into polite company. They would prefer constructive work or income from healthy sources. Yet many have been indoctrinated to believe that militarism is normal and necessary. For those who consider change to be essential if life on this planet has a chance at survival, it is important to see all the ways that the military- industrial-congressional-almost everything-complex is being sustained.

“Free market economy” is a myth. In addition to the huge nonprofit (non-market) sector, government intervention is substantial, not only in the gigantic military, but in agriculture, education, health care, infrastructure, economic development (!), et al. For the same trillions we could have a national economy that repairs the environment, provides a fine standard of living and cultural opportunities for all, and works for peace on earth.

SC169-5

https://www.peakprosperity.com/blog/114231/faang-nary-coal-mine

The FAANG-nary In The Coal Mine
The long-awaited breakdown in sentiment is finally here

Two weeks ago, I issued a report to Peak Prosperity's premium subscribers, warning of an immiment downwards re-pricing of the FAANG stocks. I even made a rare recommendation for taking an active short position against them (one now up 18%).

That report proved quite timely. Over the past 10 days:

Netflix (NFLX) is down 10% after issuing disappointing subscriber growth and Q3 guidance
Facebook (FB) is down 20% after delivering lower user and revenue numbers than the Street was expecting
Amazon (AMZN) is flat despite posting blowout Q2 EPS yesterday, offset by a revenue miss
Google/Alphabet (GOOGL) only managed a meager 3% rise after reporting earnings & revenue beats that were tempered by rising costs and a record $5 billion EU anti-trust fine

This sudden weakness among key FAANG members is extremely significant. Much more so than most investors realize.
Confidence In The FAANGs Ran Supreme (Until Now)

Over the past few years, investor capital has been increasingly concentrating into the FAANGs while the rest of the market has been deteriorating:
ETF With FAANG Equities Within Top 15 Holdings

2018: 605
2017: 501
2016: 430
2015: 332
2014: 277
2013; 230
2012: 175
2011: 101
2010: 62
2009: 14
2008: 9

Source: Lawrence McDonald

As portfolios have become more and more FAANG-dominated, more and more investors have come to see those five stocks as "unstoppable". They have unnaturally performed as both "risk-on" and "risk-off" havens for years -- delivering consistent share price growth when markets move higher, while holding steady when they don't.

As a result of this piling-in by investors, the five FAANG stocks collectively now have a whopping market capitalization of $4 trillion.

They comprise nearly half of the NASDAQ index's market cap.

The FAANGs are the largest five companies in the S&P 500. And they were responsible for ALL of that index's growth over the first six months of this year (without them, the S&P 500 would have had a negative return in H1 2018):

In short, the FAANGs now ARE the market.
The Canary In The Coal Mine

The FAANGs are the last remaining stocks pulling this 9-year bull market higher.

Remember that they're collectively worth $4 trillion? Well, they were all worth only $1.2 trillion in 2013. They've nearly quadrupaled in just 5 short years.

The ramp-up in the FAANGs is largely responsible for today's record highs in the equity indices, none more so than the NASDAQ:

Which is why it's essential to appreciate how bull markets end. They end by one thing and one thing alone: a reversal in sentiment.

And a reversal of sentiment is exactly what we're beginning to see with the FAANGs. Investors have suddenly discovered that these companies are not impervious. They can lose 10% or 20% overnight, just like any other overvalued stocks.

As my fellow co-founder Chris Martenson recently quipped: "If NFLX was the canary in the coal mine, then Facebook was the first miner dropping to his knees."

To that, I would add that Amazon's cross-current results is a second miner suddenly feeling dizzy with hypoxia.

And even though Twitter isn't technically a FAANG, it's often lumped in with them. Having dropped 20% after releasing earnings last night, TWTR is now lying face-down, comatose on the mine floor.

Which is why after years as do-no-wrong darlings, the FAANGs suddenly find themselves beset on all sides by skeptics.

As an example: here's the latest outlook from Doug Kass, who recently revealed that he's sold all his long positions and adopted a portfolio positioning very similar to the one Peak Prosperity has been advising: heavy cash + precious metals + some shorts:

"There is nothing like price to change sentiment."

- Helene Meisler

Some are surprised that the overall market has not immediately fallen and that the VIX did not rise in response to the large miss at Facebook.

I am not shocked (there was some "positive" trade news late in the day) - but more importantly, tops are processes.

For years there has been a narrative to stay bullish - to not see or respect any turns (as significant). It was like that in 1987, 2000 and 2007-08 as the market ramped until the day it began to rollover.

It is no different today.

This week may represent a seismic change in investor perceptions - as it relates to FANG and possibly the broader markets.

The markets are likely headed for a FANG-Over.

FANG market dominance (shades of 1999) - with too many on the same side of the investing boat - will likely morph into shades of early 2000 (which represented the end of the dot.com boom and the start of a market correction)

And from Oaktree Capital's Howard Marks:

Yes. They (FAANG- Facebook, Apple, Amazon, Netflix and Alphabet's Google) are great companies, but ETFs may have accentuated the flow of capital into those stocks...

Things that are most hyped produce the most pain... A conspicuous number of ETFs are concentrated in the same stocks. When things go cold ... who is going to buy it?...

If and when it ends, it will end worse for the stocks that have had momentum and for the ETFs that hold them than for the rest."

Even Morgan Stanley, a bastion of Wall Street "business as usual", has uncharacteristically issued a twin pair of reports warning investors to get out the markets generally and the FAANG stocks in particular.

Calling the escalating trade disputes between the US and rest of the world a 'vicious cycle' that will put downward pressure on risk markets (i.e. stocks and bonds), MS predicts the Tech equity sector will be the one most affected:

"...we do think that 2Q earnings season will bring an inevitable acknowledgement from companies that trade tensions increase the risk to forward earnings estimates, even if managements don’t formally lower the bar. Throw in the fact that these stocks have rarely, if ever, been so over-loved and over-owned, and the risk of a proper rain storm in this zip code increases significantly."

When a white-shoe sell-side firm like Morgan Stanley (i.e., "Must...always...keep...clients...fully...invested...") is admitting that these stocks are "over-loved and over-owned", you know the party is truly over.

Also, a quick glance at insider selling by FAANG management shows that execs are pulling money out as fast as they can. The transaction volume of insider selling is the highest it's been in at least 6 years, with over $5 billion offloaded so far in 2018:

FANG Insiders Are on Track to Sell More Than $5 Billion of Stock (Bloomberg)

Insiders at tech heavyweights led by Facebook Inc.’s Mark Zuckerberg are selling stock at the fastest pace in six years, cashing in on buoyant equity markets.

Senior executives and directors of Facebook, Amazon.com Inc., Netflix Inc. and Google parent Alphabet Inc. have disposed of $4.58 billion of stock this year, according to data compiled by Bloomberg. They’re on track to exceed $5 billion for the first six months of 2018, the highest since Facebook went public in 2012 and pushed first-half insider sales to $14.3 billion.

FANG insiders are on pace to sell $5.2 billion of shares in the first half of 2018

This data adds support to Charles Hugh Smith's hypothesis about distribution; that insiders have been using the string of rallies in 2018 to frantically sell their overvalued shares to the "dumb money" in advance of a material price correction.
Existential Risks

The obvious question for these stocks, some of which sport forward P/E ratios of over 100 and/or have more than doubled in price within the past 9 months is: What possible rationale is there for them to go materially higher from here?

Leaving that aside for a moment (and to be sure, there are still renown investors who remain bullish on these stocks), each of the FAANGs is facing one or more existential risks. Here are just some of them:

Facebook: facing greater regulatory scrutiny in the wake of user privacy scandals like Cambridge Analytica, which resulted in a mass "quit Facebook" movement. Younger generations do not use the platform (only 9% of Gen Z, the age cohort following Millenials, uses Facebook)
Amazon: facing greater anti trust concern from the Trump administration, which just appointed a longtime Amazon critic to the FTC and is pursuing an Internet sales tax.
Apple: seeing slowing iPhone sales as device prices hit $1,000. It's foreign sales and supply chainsare highly predicted to be big causualties of the current trade wars.
Netflix: massive negative $3-4 billion cash flows this year as content production costs increase. Competing platforms from other big content players will define the future landscape. Disney is pulling its wildly popular content from Netflix in 2019.
Google: how is having 90% of the search market not a monopoly? Expect more anti trust restrictions and massive fines on Google (and YouTube for that matter) in the future.

These are big risks. Will they be the downfall of these giants? Who knows? But they for sure argue for healthy skepticism of 100+ P/E ratios...
How Bad Will Things Get?

The FAANGs are so important because as they go, so will go the rest of the markets.

They've served as the favorite and last bastian of hope for bullish investors for so long now that there's nothing left to advance a bull market narrative should they roll over from here.

And it's indeed looking like a rolling-over may be in progress:

As we've detailed repeatedly (most recently in our report A Hard Rain's a-Gonna Fall), a price correction of 40% or more for stocks could be in order when the current environment of sky-high asset bubbles bursts.

And that's only looking at the current (over)valuation of the equity markets.

Many of the hottest real estate markets are now showing signs that they peaked last year or are currently nosing over. And despite the blip up in GDP for Q2, risks of the US returning to recession are multiplying -- and today's trade wars (which alone could shave 20% off of the S&P) and rising interest rates are exacerbating the odds.

Should those three things -- a market crash, a housing bust, and a deep recession -- all converge at the same time (as is likely, as they are reinforcing factors for one another), we could easily see another crisis on par with the Great Recession (or worse).

And as bad as that will be, the response from our governments and central banks will make things even worse.

Why? Because they'll be 'fighting the last war', using the same playbook they used to staunch the 2008 liquidity crisis. Except this time, the crisis will be one of valuation.

In Part 2: The Coming Valuation Crisis, we explain the underlying dynamics of how the next crisis will unfold, and why the central planners' efforts are likely only going to serve as pouring gasoline on the fire.

The sad reality is we likely won't have to wait long to see this story play out. With the sudden weakening of the FAANGs, the last rampart holding back the long-overdue market correction is falling.

SC169-4

http://kunstler.com/clusterfuck-nation/russia-attacked-us/

Russia Attacked Us

This idiotic fantasy congealed in the political matrix last week as everyone across the spectrum of parties and factions scrambled for patriotism brownie points in what is shaping up as an epic game of Capture-the-Flag for the mid-term elections. Listen to me for a moment, as our arch-nemesis Vlad the Putin said to Fox News knucklehead Chris Wallace in an interview aired Sunday Night — when Wallace interrupted Mr. Putin for perhaps the fourth time, saying, “I don’t want to interrupt you, sir, but….”

“Listen to me. Be patient,” Mr. Putin repeated dolefully, like a second-grade teacher struggling with an ADD kid.

The interview was trying my Christian patience, too. And my own personal fantasy was that Mr. Putin would whip out 30 inches of rebar and whap Chris Wallace upside the head with it. But he only repeated, “Be patient….”

So, listen to me: Russia did not “attack” us. Trolling on Facebook is not an attack on the nation. The allegation that Russia “hacked” Hillary’s email and the DNC server is so far without evidence, and computer forensics strongly suggests that the information was transferred onto a flash-drive on its journey to Wikileaks. And, of course, the information itself, concerning embarrassing unethical hijinks among Democratic Party officials, was genuine and truthful — they “meddled” in their own primary elections.

This lingering Russia hysteria got a big re-boot last week following Mr. Trump’s impressively awkward performance onstage with the nimble Mr. Putin, whose self-possession only reinforced Mr. Trump’s lumbering oafishness and amazing verbal incoherence. It’s hard enough for Americans to understand what the Golden Golem of Greatness is trying to say; imagine the torment of the translators untangling his tortured utterances!

I daresay that some of the American observers secretly wished that we could swap over Mr. Trump for Mr. Putin so as to have a national leader with some decorum and poise, but alas…. And one can’t help but wonder how Mr. Putin sizes up POTUS among his intimates inside the Kremlin. I’d love to be a fly on that wall.

The Helsinki summit meeting has the look of a turning point in Mr. Trump’s political fortunes. One irony is that he may escape his enemies’ efforts to nail him on any Russia “collusion” rap only to be sandbagged by financial turmoil as the dog days of summer turn nervously toward autumn. Events will cancel the myth that his actions as president have produced a booming economy. If anything, the activities that make up our economy have only become more vicious rackets, especially the war industries, with all their inducements to counter the imagined Russia threat.

The financial markets are the pillars of the fantasy that the US economy is roaring triumphantly. The markets are so fundamentally disabled by ten years of central bank interventions that they don’t express the actual value of any asset, whether stocks, or bonds, or gold, oil, labor, currencies, or the folly known as crypto-currency. We await the fabled “moment of truth” when the avenging angel of price discovery returns and shatters the illusion that accounting fraud equals prosperity.

The revelation that Mr. Trump is not an economic genius will spur a deeper dive by chimerical Democrats into nanny state quicksand. They will make the new fad of a Guaranteed Basic Income the centerpiece of the midterm election — even though many Democrats will not really believe in it. They are pretending not to notice how broke the USA actually is, and how spavined by unpayable debt. The lurking suspicion of all this is surely behind fantasies such as Russia attacked us, the displacement of abstruse and impalpable fear onto something simple and cartoonish, like the President of the United States.

SC169-3

https://www.peakprosperity.com/blog/114209/america-insolvent

America The Insolvent
A reckoning is due. One the elites are already readying for.

Watching the world these days, I’m experiencing the same fury that rises up from my gut when the driver in the car ahead me is weaving drunkenly, endangering everyone on the road.

Fury is a normal and rational human response when threatened with unnecessary harm. Women who are groped (or worse) by a disgusting predator like Harvey Weinstein, pensioners whose funds are stolen by Wall Street shysters, everyone who is being fleeced by corporations in search of a few extra dollars this quarter -- all have the right to be infuriated.

It’s been especially hard of late for those of us who are "reality"-based; who value data, fundamentals and historical context.

I earn my living by reading, analyzing and making sense of the world, and then working to help orient people’s actions to align with both the current reality and future probabilities. But that's become pretty damn difficult in a world where the financial markets are rigged and the main news outlets are unwilling (unable?) to cover the real issues, preferring instead to focus on distractions that mainly serve to keep us isolated and divided.

The trajectory our global society is on will not end well, and that infuraties me. And the fact that most of the coming suffering is unnecessary if only we'd make better choices -- that really pisses me off.

Here's just a small smattering of the threats we've created for ourselves:

$247 trillion of global debt, growing exponentially
Off-budget liabilities well over a quadrillion dollars globally ($220+ trillion in the US alone)
Massively underfunded pensions mathematically unable to meet their future obligations
A coming peak in world oil supply somewhere between 2020-2030 (and around 2022 for the US)
A global economy that requires perpetual growth, but can't grow for much longer due to planetary resource constraints
Huge demographic imbalances in Japan, the US, the EU and Russia that will leave too few workers supporting too many elderly
Collapsing ecosystems and increasing heatwaves on both land and sea, threatening crop failures and food chain disruptions.

Collectively these all point to a future of less. Perhaps even a future of nothing.

Our only option for safely navigating towards a better future is to start dedicating a huge amount of focus, time, energy and resources to addressing these threats.

But, unfortunately, that’s simply not happening right now.
Unsustainable Finances

We don’t have much time left to get prepared. Yes, it’s rare for things to suddenly fall apart overnight -- so if you're playing the odds, we probably have a few years left before the status quo as we know it begins to break down. Maybe until 2020; possibly to 2023. But not much longer after that.

The trends are just too severe. And they're building up steam.

Setting aside for a moment the frightening ecological and energy trends, a cursory glance at the fiscal and economic data still screams: This is unsustainable!

Look at the projected deficit for the US government:

The US government is currently in fiscal tax year 2018. That means next year's projected deficit will breach the trillion mark, and things only get worse from there. By 2028 the deficit will be at least $1.7 trillion and possibly as much as $2.4 trillion.

It bears noting that current US tax receipts are just a smidge over $2 trillion. And as the chart below shows, they tend to drop precipitously during recessions:

Delusionionaly, the government's projection of federal deficits doesn't include any provisions for recessions over the next decade. This is nuts; recessions are a normal and recurring part of our economic system.

And due to the Federal Reserve's tinkering to control the business cycle by replacing it with a credit cycle, the next recession is likely to be a doozy -- because when credit cycles burst, they are immediately and powerfully contractionary.

So it’s not at all unthinkable that at some point between here and 2028 the US government will find itself borrowing more than 100%(!) of tax receipts in a given year.

That, my friends, is an express ticket to Venezuela-style insolvency.

But wait, there's more. Two other very much out-of-control elements exacerbating these fiscal deficits will be rising interest costs and Social Security.
Debt Will Become More Costly To Service

Interest costs have a bad habit of being self-reinforcing. The more you borrow the higher your interest costs. But if you're the government, there's an added complexity: the more you borrow, the more you tend to also drive up the interest rate, which is an additional compounding factor.

Interest payments are already 25% of tax receipts and are certain to climb as the US federal government tacks on another $13 to $17 trillion in additional debt over the next ten years. Or possibly nearly twice that if a severe recession comes along, as is highly likely.

Under the best scenario (“only” $13 trillion) and assuming a very generous average rate of interest of 3%, that will result in some $400 billion of new, incremental yearly interest payments by 2028.

Under the worst scenario, (let’s assume an incremental $25 trillion of new debt at 5%) that would balloon to an incremental $1.25 trillion in new interest costs. Per year.
Social Security Reserves Are On Their Way To $0

Social Security is now in a cash deficit.

It's drawing down its “trust fund”, even though this "fund" doesn't have any actual money in it (just IOU’s from the US Treasury). Put simply, every time the SS administration draws upon the trust fund, it hands some of those IOUs to the US Treasury in return for cash.

And how does the US Treasury get that cash? That’s right: by issuing more debt.

As we can see in this next chart from the SS administration, nearly $3 trillion will be required over the 2018 to 2032 period. After which point, the SS trust fund reserves are gone:

NOTE: we will be going much deeper into these kinds of data at our Summit in New York City with David Stockman on Sep 16, 2018. As former head of the Office of Management and Budget under President Reagan, David has a near-unparalleled command of the vulnerabilities of the US economy and financial markets, as well as what likely repercussions their failure will bring. To learn more about that event, click here.

By Definition, This Will End

All of the above is simply an exercise to show that just when looking at the US economy alone -- forget about the issues facing other countries and accelerating depletion of key resources (soil/aquifers/fossil fuels/pollinators/etc) around the world -- the current trajectory is entirely unsustainable.

Meaning it must someday end. Whether that will manifest in a sudden castrophe, or in a drawn-out crescendo of accumulating crises, who knows?

But what won’t be happening is “more of the same”. Or a straight-line continuation of business as usual.

I can make the same trend extrapolation arguments for water aquifers and glacial flows serving billions of people. And with soil loss, and oceanic dead zones, and oil production.

None of this is sustainable.

This existential threat to our safety is the root reality, whether we're conscious of it or not, underlying why so many of us are feeling infurated these days.

And while that fury often takes a partisan bent, our predicaments have nothing whatsoever to do with any particular political party. All are the same when it comes to fostering business as usual. All are identical in their support for endless growth. They merely argue over which misguided steps to take in pursuit of those doomed goals.

As the video below explains, everyone buying into the false 'left vs right' framing is being manipulated. Just as two rats in a cage, shocked by an unseen scientist, will direct their anger at each other, oblivious to the true assailant:

The Elites Are Already Making Preparations

The sheer obviousness of our collective predicaments combined with the near complete absence of any collective conversation about them is infuriating.

Worse, the powers that be are very busy propping markets in order to send the signal that “all is well” when everything is very much not well. Far too many people fall for this deception for my comfort.

As we can plainly see in the data presented above, the US is now utterly insolvent and headed towards bankruptcy. Most other nations are just as bad off, or worse. All are pursuing the same insane, impossible policy: Grow exponentially. Forever.

Which makes the current crop of politicians and monetary authorities no better than heavily-intoxicated truck drivers, drunkenly weaving their gigantic rigs in front of your family's car. Their recklessness to everyone else's well-being is infuriating.

The few paying attention, like you, can see that all of this falls apart sooner or later. The critical question to ask ourselves is: What should we prioritize doing now, in advance of the reckoning?

That's the question an increasing number of elites are asking themselves. Yes, these are the people controlling the system today and benefitting the most from it, usually at our expense. But they can see that the racket they're running has an expiration date. And they're extremely worried about the hell that may break loose when it arrives.

You may have read some of the recent news stories about billionaires drawing up emergency plans for the social disorder they fear will erupt when the status quo breaks down. I can tell you from first-hand experience these stories are true. We've had a number ultra-wealthy individuals and families approach Peak Prosperity for consultations on the same topic.

In Part 2: The Rich Are Planning For Catastrophe, we explain what the wealthy are doing and what frightens them the most. Like them or not, these people have access to the best information and the most resources with which to take action. We'd be foolish not to pay attention to what they're planning for and how they're planning for it.

Time is short. The elites are making their own preparations. Be sure to get your own in place soon.

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https://srsroccoreport.com/the-energy-cliff-approaches-world-oil-gas-discoveries-continue-to-decline/

THE ENERGY CLIFF APPROACHES: World Oil & Gas Discoveries Continue To Decline

As the world continues to burn energy like there is no tomorrow, global oil and gas discoveries fell to another low in 2017. And to make matters worse, world oil investment has dropped 45% from its peak in 2014. If the world oil industry doesn’t increase its capital expenditures significantly, we are going to hit the Energy Cliff much sooner than later.

According to Rystad Energy, total global conventional oil and gas discoveries fell to a low of 6.7 billion barrels of oil equivalent (Boe). To arrive at a Boe, Rystad Energy converts natural gas to a barrel of oil equivalent. In 2012, the world discovered 30 billion Boe of oil and gas versus the 6.7 billion Boe last year:

In the article, All-time low for discovered resources in 2017, Rystad reports, it stated the following:

“We haven’t seen anything like this since the 1940s,” says Sonia Mladá Passos, senior analyst at Rystad Energy. “The discovered volumes averaged at ~550 MMboe per month. The most worrisome is the fact that the reserve replacement ratio in the current year reached only 11% (for oil and gas combined) – compared to over 50% in 2012.” According to Rystad’s analysis, 2006 was the last year when reserve replacement ratio reached 100%.

The critical information in the quote above is that the world only replaced 11% of its oil and gas consumption last year compared to 50% in 2012. However, the article goes on to say that the last time global oil and gas discoveries were 100% of consumption was back in 2006. So, even at high $100+ oil prices in 2013 and 2014, oil and gas discoveries were only 25% of global consumption.

As I mentioned at the beginning of the article, global oil capital investment has fallen right at the very time we need it the most. In the EIA’s International Energy Outlook 2017, world oil capital investment fell 45% to $316 billion in 2016 versus $578 billion in 2014:

In just ten years (2007-2016), the world oil industry spent $4.1 trillion to maintain and grow production. However, as shown in the first chart, global conventional oil and gas discoveries fell to a new low of 6.7 billion Boe in 2017. So, even though more money is being spent, the world isn’t finding much more new oil.

I believe we are going to start running into serious trouble, first in the U.S. Shale Energy Industry, and then globally, within the next 1-3 years. The major global oil companies have been forced to cut capital expenditures to remain profitable and to provide free cash flow. Unfortunately, this will impact oil production in the coming years.

Thus, the world will be facing the Energy Cliff much sooner than later.

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http://kunstler.com/clusterfuck-nation/anatomy-of-a-displacement-projection-syndrome/

Anatomy of a Displacement-Projection Syndrome

“For more than a decade, Russia has meddled in elections around the world, supported brutal dictators and invaded sovereign nations — all to the detriment of United States interests.”
— The New York Times

The Resistance sure got a case of the vapors this week over Mr. Trump’s failure to throttle America’s arch-enemy, the murderous thug V. Putin of Russia, onstage in Helsinki, as any genuine Marvel Comix hero is expected to do when facing consummate evil. Instead, the Golden Golem of Greatness voiced some doubts about the veracity of our “intelligence community” — as the shape-shifting Moloch of black ops likes to call itself, as if it were a kindly service organization in Mr. Rogers neighborhood, collecting dimes for victims of childhood cancer.

If I may be frank, the US Intel community looks like a much bigger threat to American life and values than anything Mr. Putin is doing, for instance his alleged “meddling” in US elections. This word, meddling, absolutely pervades the captive Resistance news outlets these days. It has a thrilling vagueness about it, intimating all kinds of dark deeds without specifying anything, as consorting with Satan once did in our history. The reason: the only specific acts associated with this meddling include the disclosure of incriminating emails among the Democratic National Committee leadership, and a tiny gang of Facebook trolls making sport of profoundly idiotic and dysfunctional American electoral politics.

The brief against Russia also contains vague accusations of “aggression.” It is hard to discern what is meant by that — though it apparently warms the heart of American war hawks and their paymasters in the warfare industries. They allege that Russia “stole” Crimea from Ukraine. Consider: Crimea had been a province of Russia since the 1700s. Ukraine itself was a province of the USSR when Nikita Khrushchev put Crimea under Ukraine’s administrative control in 1956, a relationship which became obviously problematic after the breakup of the soviet mega-state in 1990 — and became even more of a problem when the US State Department and our CIA stage-managed a coup against the Russia-leaning Ukrainian president Viktor Yanukovych in 2014. Crimea is the site of Russia’s only warm water naval bases. Do you suppose that even an experience American CIA analyst might understand that Russia would under no circumstances give up those assets? Please, grow up.

Does anyone remember the explicit promise that US Government gave the transitional leader, Mikhail Gorbachev, that NATO would not expand into the countries of eastern Europe formerly under soviet control? NATO now includes the Czech Republic, Hungary and Poland, Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia, Albania, Croatia, and Montenegro. Is anyone aware that NATO has been staging war games on Russia’s border the past several years? Do you suppose this might be disturbing to the Russians, who lost at least 20 million dead when Germany crossed that border in 1941?

As to the thug-and-murderer charge against V. Putin, has any news org actually published a list of his alleged victims? It’s very likely, of course, that Mr. Putin has had some of his political enemies killed. I wouldn’t take the “con” side of that argument. But I’d be interested in seeing an authoritative list, if the intel community has one (and why wouldn’t they?). I imagine it doesn’t exceed two dozen individuals. How many innocent bystanders did President Obama kill during the drone attack spree of his second term, when our rockets blew up wedding parties and sandwich shops in faraway lands. In 2016, The Atlantic published this:

One campaign, Operation Haymaker, took place in northeastern Afghanistan. Between January 2012 and February 2013, The Intercept reported, “U.S. special operations airstrikes killed more than 200 people. Of those, only 35 were the intended targets. During one five-month period of the operation, according to the documents, nearly 90 percent of the people killed in airstrikes were not the intended targets.”

I suppose the excuse is that none of this was personal — as V. Putin’s alleged murders were. No, it wasn’t personal. It was worse than that. It was a bunch of military video-game jocks sitting around an air-conditioned bunker eating hot pockets and slurping slurpees while snuffing out lives by remote control twelve-thousand miles away. I wouldn’t be surprised if they were high-fiving each other with every hit, too.

As for “hacking” of elections, do you suppose for minute that we do not have hundreds, or perhaps thousands, of computer techies at our many sprawling NSA facilities around the country working around the clock to penetrate foreign computer defenses absolutely everywhere, among friend and foe alike? And that we are not trying to influence the outcomes of their political struggles in our favor? Go a step further: do you suppose those US “intel community” hackers are not also collecting information about American citizens, including yourself?

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https://www.truthdig.com/articles/the-war-on-assange-is-a-war-on-press-freedom/

The War on Assange Is a War on Press Freedom

The failure on the part of establishment media to defend Julian Assange, who has been trapped in the Ecuadorean Embassy in London since 2012, has been denied communication with the outside world since March and appears to be facing imminent expulsion and arrest, is astonishing. The extradition of the publisher—the maniacal goal of the U.S. government—would set a legal precedent that would criminalize any journalistic oversight or investigation of the corporate state. It would turn leaks and whistleblowing into treason. It would shroud in total secrecy the actions of the ruling global elites. If Assange is extradited to the United States and sentenced, The New York Times, The Washington Post and every other media organization, no matter how tepid their coverage of the corporate state, would be subject to the same draconian censorship. Under the precedent set, Donald Trump’s Supreme Court would enthusiastically uphold the arrest and imprisonment of any publisher, editor or reporter in the name of national security.

There are growing signs that the Ecuadorean government of Lenín Moreno is preparing to evict Assange and turn him over to British police. Moreno and his foreign minister, José Valencia, have confirmed they are in negotiations with the British government to “resolve” the fate of Assange. Moreno, who will visit Britain in a few weeks, calls Assange an “inherited problem” and “a stone in the shoe” and has referred to him as a “hacker.” It appears that under a Moreno government Assange is no longer welcome in Ecuador. His only hope now is safe passage to his native Australia or another country willing to give him asylum.

“Ecuador has been looking for a solution to this problem,” Valencia commented on television. “The refuge is not forever, you cannot expect it to last for years without us reviewing this situation, including because this violates the rights of the refugee.”

Moreno’s predecessor as president, Rafael Correa, who granted Assange asylum in the embassy and made him an Ecuadorean citizen last year, warned that Assange’s “days were numbered.” He charged that Moreno—who cut off Assange’s communications the day after Moreno welcomed a delegation from the U.S. Southern Command—would “throw him out of the embassy at the first pressure from the United States.”

Assange, who reportedly is in ill health, took asylum in the embassy to avoid extradition to Sweden to answer questions about sexual offense charges. He feared that once in Swedish custody for these charges, which he said were false, he would be extradited to the United States. The Swedish prosecutors’ office ended its “investigation” and extradition request to Britain in May 2017 and did not file sexual offense charges against Assange. But the British government said Assange would nevertheless be arrested and jailed for breaching his bail conditions.

The persecution of Assange is part of a broad assault against anti-capitalist and anti-imperialist news organizations. The ruling elites, who refuse to accept responsibility for profound social inequality or the crimes of empire, have no ideological veneer left to justify their greed, ineptitude and pillage. Global capitalism and its ideological justification, neoliberalism, are discredited as forces for democracy and the equitable distribution of wealth. The corporate-controlled economic and political system is as hated by right-wing populists as it is by the rest of the population. This makes the critics of corporatism and imperialism—journalists, writers, dissidents and intellectuals already pushed to the margins of the media landscape—dangerous and it makes them prime targets. Assange is at the top of the list.

I took part with dozens of others, including Daniel Ellsberg, William Binney, Craig Murray, Peter Van Buren, Slavoj Zizek, George Galloway and Cian Westmoreland, a week ago in a 36-hour international online vigil demanding freedom for the WikiLeaks publisher. The vigil was organized by the New Zealand Internet Party leader Suzie Dawson. It was the third Unity4J vigil since all of Assange’s communication with the outside world was severed by the Ecuadorean authorities and visits with him were suspended in March, part of the increased pressure the United States has brought on the Ecuadorean government. Assange has since March been allowed to meet only with his attorneys and consular officials from the Australian Embassy.

The Inter-American Court of Human Rights ruled Friday that those seeking political asylum have the right to take refuge in embassies and diplomatic compounds. The court stated that governments are obliged to provide safe passage out of the country to those granted asylum. The ruling did not name Assange, but it was a powerful rebuke to the British government, which has refused to allow the WikiLeaks co-founder safe passage to the airport.

The ruling elites no longer have a counterargument to their critics. They have resorted to cruder forms of control. These include censorship, slander and character assassination (which in the case of Assange has sadly been successful), blacklisting, financial strangulation, intimidation, imprisonment under the Espionage Act and branding critics and dissidents as agents of a foreign power and purveyors of fake news. The corporate media amplifies these charges, which have no credibility but which become part of the common vernacular through constant repetition. The blacklisting, imprisonment and deportation of tens of thousands of people of conscience during the Red Scares of the 1920s and 1950s are back with a vengeance. It is a New McCarthyism.

Did Russia attempt to influence the election? Undoubtedly. This is what governments do. The United States interfered in 81 elections from 1945 to 2000, according to professor Dov Levin of Carnegie Mellon University. His statistics do not include the numerous coups we orchestrated in countries such as Greece, Iran, Guatemala and Chile or the disastrous Bay of Pigs invasion in Cuba. We indirectly bankrolled the re-election campaign of Russia’s buffoonish Boris Yeltsin to the tune of $2.5 billion.

But did Russia, as the Democratic Party establishment claims, swing the election to Trump? No. Trump is not Vladimir Putin’s puppet. He is part of the wave of right-wing populists, from Nigel Farage and Boris Johnson in Britain to Viktor Orbán in Hungary, who have harnessed the rage and frustration born of an economic and political system dominated by global capitalism and under which the rights and aspirations of working men and women do not matter.

The Democratic Party establishment, like the liberal elites in most of the rest of the industrialized world, would be swept from power in an open political process devoid of corporate money. The party elite, including Chuck Schumer and Nancy Pelosi, is a creation of the corporate state. Campaign finance and electoral reform are the last things the party hierarchy intends to champion. It will not call for social and political programs that will alienate its corporate masters. This myopia and naked self-interest may ensure a second term for Donald Trump; it may further empower the lunatic fringe that is loyal to Trump; it may continue to erode the credibility of the political system. But the choice before the Democratic Party elites is clear: political oblivion or enduring the rule of a demagogue. They have chosen the latter. They are not interested in reform. They are determined to silence anyone, like Assange, who exposes the rot within the ruling class.

The Democratic Party establishment benefits from our system of legalized bribery. It benefits from deregulating Wall Street and the fossil fuel industry. It benefits from the endless wars. It benefits from the curtailment of civil liberties, including the right to privacy and due process. It benefits from militarized police. It benefits from austerity programs. It benefits from mass incarceration. It is an enabler of tyranny, not an impediment.

Demagogues like Trump, Farage and Johnson, of course, have no intention of altering the system of corporate pillage. Rather, they accelerate the pillage, which is what happened with the passage of the massive U.S. tax cut for corporations. They divert the public’s anger toward demonized groups such as Muslims, undocumented workers, people of color, liberals, intellectuals, artists, feminists, the LGBT community and the press. The demonized are blamed for the social and economic dysfunction, much as Jews were falsely blamed for Germany’s defeat in World War I and the economic collapse that followed. Corporations such as Goldman Sachs, in the midst of the decay, continue to make a financial killing.

The corporate titans, who often come out of elite universities and are groomed in institutions like Harvard Business School, find these demagogues crude and vulgar. They are embarrassed by their imbecility, megalomania and incompetence. But they endure their presence rather than permit socialists or leftist politicians to impede their profits and divert government spending to social programs and away from weapons manufacturers, the military, private prisons, big banks and hedge funds, the fossil fuel industry, charter schools, private paramilitary forces, private intelligence companies and pet programs designed to allow corporations to cannibalize the state.

The irony is that there was serious meddling in the presidential election, but it did not come from Russia. The Democratic Party, outdoing any of the dirty tricks employed by Richard Nixon, purged hundreds of thousands of primary voters from the rolls, denied those registered as independents the right to vote in primaries, used superdelegates to swing the vote to Hillary Clinton, hijacked the Democratic National Committee to serve the Clinton campaign, controlled the message of media outlets such as MSNBC and The New York Times, stole the Nevada caucus, spent hundreds of millions of dollars of “dark” corporate money on the Clinton campaign and fixed the primary debates. This meddling, which stole the nomination from Bernie Sanders, who probably could have defeated Trump, is unmentioned. The party hierarchy will do nothing to reform its corrupt nominating process.

WikiLeaks exposed much of this corruption when it published tens of thousands of messages hacked from Clinton campaign chairman John Podesta’s email account. The messages brought to light the efforts by the Democratic Party leadership to thwart the nomination of Sanders, and they disclosed Clinton’s close ties with Wall Street, including her lucrative Wall Street speeches. They also raised serious questions about conflicts of interest with the Clinton Foundation and whether Clinton received advance information on primary-debate questions.

The Democratic National Committee, for this reason, is leading the Russia hysteria and the persecution of Assange. It filed a lawsuit that names WikiLeaks and Assange as co-conspirators with Russia and the Trump campaign in an alleged effort to steal the presidential election.

But it is not only Assange and WikiLeaks that are being attacked as Russian pawns. For example, The Washington Post, which has sided with the Democratic Party in the war against Trump, without critical analysis published a report on a blacklist posted by the anonymous website PropOrNot. The blacklist was composed of 199 sites that PropOrNot alleged, with no evidence, “reliably echo Russian propaganda.” More than half of those sites were far-right, conspiracy-driven ones. But about 20 of the sites were major progressive outlets including AlterNet, Black Agenda Report, Democracy Now!, Naked Capitalism, Truthdig, Truthout, CounterPunch and the World Socialist Web Site. PropOrNot, short for Propaganda or Not, accused these sites of disseminating “fake news” on behalf of Russia. The Post’s headline was unequivocal: “Russian propaganda effort helped spread ‘fake news’ during the election, experts say.”

In addition to offering no evidence, PropOrNot never even disclosed who ran the website. Even so, its charge was used to justify the imposition of algorithms by Google, Facebook, Twitter and Amazon to direct traffic away from the targeted sites. These algorithms, or filters, overseen by thousands of “evaluators,” many hired from the military and security and surveillance apparatus, hunt for keywords such as “U.S. military,” “inequality” and “socialism,” along with personal names such as Julian Assange and Laura Poitras. The keywords are known as “impressions.” Before the imposition of the algorithms, a reader could type in the name Julian Assange and be directed to an article on one of the targeted sites. After the algorithms were put in place, these impressions directed readers only to mainstream sites such as The Washington Post. Referral traffic from the impressions at most of the targeted sites has plummeted, often by more than half. This isolation will be compounded by the abolition of net neutrality.

Any news or media outlet that addresses the reality of our failed democracy and exposes the crimes of empire will be targeted. The January 2017 Director of National Intelligence Report spent seven pages on RT America, where I have a show, “On Contact.” The report does not accuse RT America of disseminating Russian propaganda, but it does allege the network exploits divisions within American society by giving airtime to dissidents and critics including whistleblowers, anti-imperialists, anti-capitalists, Black Lives Matter activists, anti-fracking campaigners and the third-party candidates the establishment is seeking to mute.

If the United States had a public broadcasting system free from corporate money or a commercial press that was not under corporate control, these dissident voices would be included in the mainstream discourse. But we don’t. Howard Zinn, Noam Chomsky, Malcolm X, Sheldon Wolin, Ralph Nader, James Baldwin, Susan Sontag, Angela Davis and Edward Said once appeared regularly on public broadcasting. Now critics like these are banned, replaced with vapid courtiers such as columnist David Brooks. RT America was forced to register under the Foreign Agent Registration Act (FARA). This act requires Americans who work for a foreign party to register as foreign agents. The FARA registration is part of the broader assault on all independent media, including the effort to silence Assange.

WikiLeak’s publication in 2017 of 8,761 CIA files, known as Vault 7, appeared to be the final indignity. Vault 7 included a description of the cyber tools used by the CIA to hack into computer systems and devices such as smartphones. Former CIA software engineer Joshua Adam Schulte was indicted on charges of violating the Espionage Act by allegedly leaking the documents.

The publication of Vault 7 saw the United States significantly increase its pressure on the Ecuadorean government to isolate and eject Assange from the embassy. Mike Pompeo, then the CIA director, said in response to the leaks that the U.S. government “can no longer allow Assange and his colleagues the latitude to use free speech values against us.” Attorney General Jeff Sessions said Assange’s arrest was a “priority.”

It is up to us to mobilize to protect Assange. His life is in jeopardy. The Ecuadorean government, violating his fundamental rights, has transformed his asylum into a form of incarceration. By cutting off his access to the internet, it has deprived him of the ability to communicate and follow world events. The aim of this isolation is to pressure Assange out of the embassy so he can be seized by London police, thrown into a British jail and then delivered into the hands of Pompeo, John Bolton and the CIA’s torturer in chief, Gina Haspel.

Assange is a courageous and fearless publisher who is being persecuted for exposing the crimes of the corporate state and imperialism. His defense is the cutting edge of the fight against government suppression of our most important and fundamental democratic rights. The government of Prime Minister Malcolm Turnbull of Australia, where Assange was born, must be pressured to provide him with the protection to which he is entitled as a citizen. It must intercede to stop the illegal persecution of the journalist by the British, American and Ecuadorean governments. It must secure his safe return to Australia. If we fail to protect Assange, we fail to protect ourselves.