Bob Phillipson: Scary signs of the times |

Bob Phillipson: Scary signs of the times

The author is absolutely correct that “It’s all about perception.” Mr. Sirota uses Professor Mettler’s euphemism “submerged state” to describe all benefits citizens receive, especially the benefits for which there is a perception that those benefits are free. The column brings to my mind the perception that an increasing number of citizens are not swayed by the freebies and government managing perceptions. I believe most would rather have a government that thinks through intelligent policies to direct our country rather than uses management of perceptions governance. As a perfect example of the latter, Homeland Security boss Janet Napolitano announced recently that her department would change their metric to measure success on controlling the border to the number of arrests made rather than the previous metric that better defined control of the borders. Sounds like a Vietnam War body count metric to me. The average citizen becomes jaded when the government cannot be successful and changes its metric to something else just to show “success.”

On the economic front, investor Jim Sinclair coined the expression MOPE or “management of perception economics” to describe our economic policies. Pronouncements by Fed chairman Bernanke that we do not have inflation and that he can control inflation immediately should it appear are perfect examples of MOPE. Bernanke’s QE2 is nothing short of economic warfare, in the form of a wave of inflation, directed at the rest of the world and even his own population (at least anybody without a large stock market, commodities or precious metals portfolio). This inflation is not temporary, as per the false reassurances, it’s baked in.

According to the Thunder Road Report – 24 February 2011 – while the government tells us there is no inflation, the recovery is underway, and our foreign policy is on track, “there are one or two signs that all is not well and you can reel off a few of them in a nanosecond:

>Western governments are insolvent along with that of Japan;

>Martin Armstrong says: “A friend of mine on Capitol Hill, among others there, tells me there is no solution (to the deficit) whatsoever until there is a major crisis”;

>China is selling US Treasuries;

>The Wikileaks revelation that Saudi Arabian oil reserves might be over-estimated by more than 30 percent;

>Food stocks are at historic lows and the climate is going increasingly wacky;

>The Fed needs a house price recovery to save the banks and broaden the wealth effect to those who don’t have large stock portfolios. The problem is that real estate is a leveraged asset and leveraged assets aren’t going to be stellar performers in a debt crisis – especially when so many (in the US anyway) are under water on their mortgages and there is a large overhang of inventory;

>Inflation is a regressive tax, hitting people on lower incomes far harder than the rich – and the world is largely populated with the former;

>There are riots across the Middle East and North Africa and even some signs of unrest in China.

There is huge economic and social change in progress, but it makes the FAICS (fast asleep intelligent citizens) too uncomfortable to consider it. The mainstream financial media doesn’t help.

Margaret Mead in “Mirror of Man” noted that people will generally make good decisions at the lowest level when it personally affects them. As the perfect storm of crises affects more of us, the population at large sees the fallacies of management of perceptions governance under which we have long suffered. Understanding this, citizens lose confidence in government and an increasing number of citizens are aware of the dangers of management of perceptions governance and are watching the performance of the current government. They will exercise their only real option at the next elections – to throw out those who continue to govern by management of perceptions.

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