The US Nears End-Stage Kremlinism

Economic conditions continue to deteriorate while the political class and its cronies struggle to maintain the fable of an economic recovery. There is no recovery underway, nor can there be one before a complete and total economic collapse. Our political environment is akin to a drug addict who is unwilling to accept the pain associated with a cure for his illness. Each sign of withdrawal is fortified with a bigger dosage of the poison. Such a strategy may defer the pain of a cure, but it does so only at the risk of death and a much more severe recuperation than necessary.

Most of the so-called remedial policy measures have been taken and have had little to no effect. Matters are better than they were at the trough, at least according to government reports which are becoming increasingly incredible. Here, for example, is a devastating comment from Gallup via Doug Ross:

Regardless of what the government reports, Gallup’s unemployment and underemployment measures show a sharp deterioration in job market conditions since mid-January.

This manipulation of government data is not new nor is Gallup the only one to point it out. John Williams of has argued for years that government statistics have been carefully managed. Mr. Williams shows on his site the difference between the government measures as originally defined and as defined today. Each revision has reduced the results reported in bad metrics (unemployment, CPI, etc.) and increased the results of good metrics (GDP, etc.).

What is new is that an entity with the stature of Gallup has spoken up and effectively accused the government of lying. Given the power of government and its almost unlimited means of retribution, such a stance is brave and likely unwise. At some point, the gap between reality and fiction becomes so large that it cannot be ignored.

Pater Tenebrarum goes further than Gallup in calling out the government. He suggests the US government (and other governments), are practicing the same kind of deception that the Kremlin did in its futile attempt to survive and remain relevant. He focused on Central Banks in particular:

Today the Federal Reserve and other major central banks are to the financial markets what the Kremlin used to be for the world at large: their actions and statements are considered of the utmost importance to the trends in financial asset prices. Any slight change in the wording of an FOMC statement tends to lead to huge volatility in financial markets. The manipulation of these markets by central banks has become the by far most important factor in ‘macro’ analysis today.

This has given rise to a new version of ‘Kremlinology’ – today, all the utterances of the monetary bureaucrats are parsed like those of the aging Kremlin autocrats of yore.

Of course, underlying it all is a fallacy quite similar to the one that was evident during the cold war, namely the ‘potent directors’ fallacy. It is widely held that the Fed and other central banks effectively ‘control’ the markets. This is a grave and potentially very costly misconception.

In a sense, the US government is in the same position as the Kremlin. The engine of growth and well-being — the private economy — stalled years ago and now is in a full-fledged, nose-first free-fall. To admit this would be to admit that the basis of government expansion over the last eight decades has been based on fraudulent claims and promises. It is in that sense that we are very much like the Kremlin. We are headed toward disaster and the ruling elites have had to step up their propaganda campaigns and lies to remain in power.

As Mr. Tenebrarum correctly stated, ultimately none of this matters:

The really funny thing is, none of it actually matters in the end. Who cares what the ‘economic outlook’ of the bureaucrats is? They have been so consistently and utterly wrong about every single major economic turning point over the institution’s entire history (check e.g. the minutes from Fed meetings in the 1930′s and 1970′s – these guys have always been clueless, it is not a recent phenomenon), that we can at best use their assessment of the economy’s prospects as a contrary indicator.

It is of course important to be aware what their next policy steps will be, if only to be prepared for the likely short term effects on the markets and the economy. Alas, one should always keep in mind: nothing they do can alter the market’s primary trend. They will always err on the side of too easy money, the main effect of which is to make the amplitude of the business cycle far greater than it otherwise would be. It means we are experiencing more lengthy, but also far more volatile business cycles. Rallies in ‘risk’ assets may be magnified, but so are the subsequent crashes.

We are late in the stages of empire. We passed stall-phase more than a decade ago. Now the forces of gravity are accelerating our decline and inevitable crash. No amount of Orwellian-speak will alter that reality. Lies and promises are political tools, but gravity is a natural force immune to the mere wants and wishes of men.

The panic and desperation should be apparent to anyone of average intelligence willing to look objectively at our situation. No one exhibits the avoidance of facts and reality more than President Obama. He consistently lies to the American people, apparently secure in the knowledge that his fawning press will defend even the indefensible and confident that his voters will accept his promises of more goodies regardless of the impossibility of delivering them. His biggest asset at this point is the fairy tales he weaves and the dumbed-down electorate cultivated for such a moment.

Sadly, whoever replaces him is unlikely to be much better. When your political or real life is at stake when the truth is known, there is no risk to lying. The system is collapsing and will collapse. Under such circumstances, our political elite are desperate and will do anything to prolong their own personal ends.



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  1. GREAT article. I keep telling people that no matter WHAT the media tells us to believe, people are feeling reality, not the fictional story. The truth ALWAYS comes out, and the laws of economic reality aren’t suspended because Bill Maher tells us things are great. People see their friends and family losing jobs, benefits, hours, etc. They see gas prices, food prices rising with no change in the foreseable future. That doesn’t go away because Joyless behar does a pom pom dance for Obamugabe. Obamugabe’s background will eventually surface, and the left will be left trying to defend the single greatest scandal and Constitutional crisis in this nation’s history. Of course, all of this assumes we haven’t moved to a full blown tyranny by then.

  2. Good comparison.

    You just did not go far enough.

    The Soviet planted the seeds of our destruction. See my book: Willing Accomplices: How KGB covert influence agents created Political Correctness, Obama’s hate-America-first political platform, and destroyed America.

    It’s on Amazon.

    We can reverse this. We only need to realize the roots of the PC-Progressives, and counter-act them. Take back our schools and colleges, the media and Hollywood.

    Kent Clizbe
    [email protected]

    1. Kent,

      Your solution is correct, although I question the amount of time required to implement it. At this stage, the life expectancy of this country, its economy, its government and its way of life is to short to accomplish what needs to be done.

      What alternatives might you offer?

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