Crisis and Legitimacy: The Fork in the Road by Gary North - from Specific Answers

Crisis and Legitimacy: The Fork in the Road

Gary North - January 04, 2017

Remnant Review

Those of us who are known as conspiracy historians argue that the Council on Foreign Relations, the Trilateral Commission, and various other high-level elite societies provide most of the leadership at the national level of the United States. In other words, we think that the system is rigged.
At the same time, we are well aware of the fact that the general public is persuaded that there are significant issues at stake politically, and once every four years the voters wake up from their slumber, and they get interested in who wins the Presidency. Then they go back to sleep. Those of us who are conspiracy historians don't think the elections make much difference in terms of the overall direction in which the nation is moving.
Nevertheless, there are times in history, which generally are times of crisis, in which fundamentally new political procedures and new political ideas that begin to shape the direction in which a nation is moving. The election of 1912 was such an election, but even more important was the Spanish-American War (1898), which launched a new era of empire for the United States. The key figure in all of this was Teddy Roosevelt.

The next major change was the Great Depression. Politically, it looked as though Hoover and Roosevelt had radically different programs. In fact, they were both Progressives. If anything, in 1932 Hoover was the more radical. The public thought it was making a fundamental decision in 1932 when it voted for Roosevelt, but the New Deal was simply an extension of what Hoover had already begun to construct. On this, read Murray Rothbard's book, America's Great Depression (1963).
Obviously, the atomic bomb changed the nature of warfare and therefore changed the nature of conflict between empires. Next, the collapse of the Soviet Union in 1991 made the United States the sole superpower. This has now degenerated into a series of no-win wars, and these wars are against non-state combatants. We do not know how this is going to turn out, except to say that at some point, the United States government is not going to be able to afford to maintain its present empire. At that point, there will be a fundamental reconsideration of the United States as the world's only superpower. In all likelihood there is not going to be a single superpower. But we don't know that for certain.
EUROPE
In Europe, the threat of invasion by displaced Islamic citizens and displaced citizens of sub-Saharan Africa has combined to force a major reconsideration of the New World Order in Europe. The bureaucrats who run the European Union and the European Commission were blindsided by this invasion, and were even more blindsided by the vote of the British to leave the European Union. They did not see this coming. They should have seen it coming. When Europe and the United States overthrew the Qaddafi government, that opened the Libyan borders to an extent that had never taken place before. He had warned about this, but the West paid no attention. It is now paying the price for paying no attention.
The Brexit vote really did matter. It was very close, but it mattered. It revealed to the bureaucrats that a major opposition movement now had the votes to undermine the New World Order in Europe. The bureaucrats are now terrified of what is going to happen politically in France, Austria, and much of Western Europe.
This really does represent a change politically. It represents a change, above all, in legitimacy. There has been a shift of public opinion away from the legitimacy of the New World Order back in the direction of national sovereignty. The bureaucrats had thought that they would be able to eliminate national sovereignty through a series of rigged elections, reelections, and treaties. They now find out that the public doesn't care about the earlier rigged elections. The public cares about the dual invasion, and the public is going to stop it. If this means violating the treaties by which the New World Order set up shop in Western Europe, the public really doesn't care. As legitimacy shifts away from the New World Order, the bureaucrats are going to find out that their paper agreements and back-room agreements that they think have the force of law in fact have no force at all. These agreements only have the force of law if the vast majority of European citizens are willing to abide by them. This is now changing rapidly.
So, it is ultimately a matter of legitimacy. When any political institution loses legitimacy, it is not long for this world.
CENTRAL BANKS AND GOVERNMENT DEBT
Two fundamental pillars of Western Europe have now become the two fundamental elements of the whole world: central banking and massive national debt. The two have always been closely interlinked. The original justification for the Bank of England in 1694 was that this private central bank, if granted a monopoly by Parliament, would then provide loans of last resort to the British government. That was the quid pro quo, and it has always been honored by the Bank of England.
Today, however, we are coming to what appears to be either a fork in the road or the end of the road. The magnitude of government debts around the world is so great, and the length of the debt is so long, that hyperinflation by central banks cannot eliminate the bulk of the national debts. This is especially true of the promises of the modern welfare state. There is no way for the governments to avoid paying government-guaranteed retirement programs and government-guaranteed health care for the aged. These obligations stretch out two generations. There is no way for the various governments to pay off these debts. Central banks cannot bail out the governments, because hyperinflation never lasts more than a few years. So, after the hyperinflation is over, the governments will still owe the money, meaning money with purchasing power.
The governments will default. This will create the greatest removal of legitimacy in Western civilization since approximately 1694. Everything that the governments have done in the West since 1694 has been dependent on massive government debt and central banking. Both of these are going to be called into question within a generation. It may not take this long.
When the two fundamental institutions of the modern world are called into question by massive default and failure, there will be political transformation on a scale that is unimaginable by today's politicians and bureaucrats. The system has gone on too long without a fundamental break. Basically, it lasted for one year in the United States: 1836. In that year, the United States government had zero debt, and in that year the Second Bank of the United States went out of existence when its charter lapsed. From 1837 on, federal debt began to increase, and then in 1913, the government created the Federal Reserve Bank.
The existing political institutions are completely dependent upon central banking and massive national debt. This debt includes the whole of the welfare state. The entire structure is going to go belly-up. It won't happen overnight, but it will happen. You can't get blood out of a turnip. The tax collectors will not be able to collect sufficient revenue to pay for the welfare state. In the United States, the tax collector at the federal level has never been able to collect more than about 20% of GDP in taxation. The public simply won't tolerate anything above this.
Combine this scenario in Western Europe with dramatically falling birth rates for white Europeans. It is clear that white Europe is not going to survive. I think the Europeans know this, and I think they are simply biding their time until they depart from this mortal coil. There is nothing that offers any hope whatsoever to white European culture. It is going to get swallowed up, either by Islam or by sub-Saharan Africa. It's just a matter of time. The handwriting is on the wall.
The same thing is happening to Russia. At some point, the Chinese are going to cross the border into Siberia, family by family, and there will not be sufficient resistance to stop this. Meanwhile, alcoholism and declining life expectancy have combined to call the survival of Russia into question. Again, it's just a matter of time.
The question, as always, is this: what is to be done? What system, what worldview, what demographic groups are going to replace the doomed system, worldview, and demographic groups of Western Europe? This is less of a problem for the United States, because the country is still growing in terms of population. But the Great Default is going to hit, and it is not clear who will be hit hardest.
THE BLAME GAME
American voters are going to look for those to hold responsible. Both political parties are going to be held responsible. The government's bureaucracy is going to be held responsible. Keynesianism is going to be held responsible. In other words, the New World Order, which sits atop a creaking, obviously bankrupt system, is going to be replaced. That's what major crises do.
The various American establishments have insisted that they have the right to rule because they have the answers. Free market capitalism does not have the answers, we are assured. There has to be Keynesian central planning. There has to be central planning by the Federal Reserve. The public has only a choice between Democrats and Republicans. The public schools have the moral authority to command the public to send their children into those schools to be indoctrinated. The public has gone along with this. As long as things bump along, the public will go along. The public will go along to get along. But when it is clear that Washington cannot deliver the goods, there will be a complete re-thinking of the present political, educational, moral, and economic order. That's what major crises do.
The answers will have to be simple. The answers will not be in the form of sophisticated economic equations. The answers will be in terms of slogans suitable for bumper stickers. The political party that does not have a supply of persuasive bumper stickers is going to be defeated. This has been the lesson of American politics since the election of 1840. "Tippecanoe and Tyler, too" got Harrison elected, and 30 days later when he died, it got Tyler elected. That brought Texas into the union in 1845.
Both political parties have betrayed their original constituents. The Democrats have betrayed the labor union movement. The Democrats under Lyndon Johnson betrayed southern segregationists in 1964-65. The Republicans have betrayed small business. No political party is committed to a balanced budget. No political party is willing to raise taxes and reduce benefits to Social Security, Medicare, and Medicaid. It really is Tweedledum and Tweedledee.
Politics is a matter of imposing losses on the enemy. It is a matter of revenge. It is a matter of looting the public till. But when the public till is empty, then politics is mostly going to be about revenge. It is not going to be pretty.
The leaders of the future are going to come from out of nowhere. The existing batch of Washington leaders will be drowned in red ink. Everything will be about blaming the other side. But that will require answers, and neither side has any plausible answers. The public has no answers. The public wants something for nothing, and the public has been promised something for nothing.
Everyone kicks the can.
There is going to be a great re-thinking of what constitutes legitimate civil government. The problem today is simple to describe: there is virtually no organized political movement that is doing the necessary groundwork to rethink the issues of political legitimacy.