Editor's note: A hidden but powerful force known as the "deep state" is ruining our country.
And as Agora founder Bill Bonner explains in today's Masters Series essay – originally published on the Bonner and Partners website on March 26 – the fix is in, and it's setting us up for a massive credit crisis…
The "Deep State" Is Now in Charge
By Bill Bonner, editor, The Bill Bonner Letter
America's money, economy and government have changed since the collapse of the Bretton Woods agreement and the end of gold-backed money.
Today, we'll focus on the government… and what it has become.
The period is hardly coincidental: On August 15, 1971, President Nixon hammered the last nail in the coffin of honest money.
It was not the only reason for the profound changes that followed. There was also the opening up of Communist China to capitalism, the fall of the Soviet Union and the rise of the Internet, to name just a few.
Caution: "Deep State" at Work
The credit-based dollar brought about a new economy. It changed the way people thought and the way their government operated.
Now, deep pools of money determine which candidates are presented to voters.
And there is a new branch of government: the "deep state." It is not mentioned in the Constitution. And it operates above and beyond the visible process of democratic government.
Americans voted for Barack Obama in 2008 because they wanted a change from the Bush-era policies. But nothing changed.
Because the fix was in…
Candidate Obama was a critic of the war in Iraq; he promised to bring the Pentagon under control. But under President Obama, "security" spending in the U.S. rose to its highest level since World War II.
President Eisenhower warned us about this. He called it the "military-industrial" complex. This was the "deep state" at work.
There are always some people in a society who are more ready than others to bully, steal, and make jackasses of themselves.
As 18th-century political philosopher William Godwin observed, if a government has any legitimate purpose at all, it is to keep those people from doing harm to their neighbors. But over time, these bullies will infest government and its related industries.
Then instead of keeping these pests under control, government gives them authority… funding even a kind of ersatz respectability. Their predations, illusions and vanities become public policy.
Like a Manure Pile to a Herd of Pigs
A reader describes what happens next:
All major industries – education, health care, finance – attract these bullies and jackasses. But the deep state calls to them like a manure pile to a herd of pigs. Soon, they are rooting and wallowing in the biggest heap of misspent resources in all of history.
Today, its agents bark at you to take off your belt in airports. Try to dig a pond in your backyard… or let your teenage boy work on the family farm… and they want to make a federal case of it.
They snoop and spy, looking for secrets they can hold over you. They tax. They regulate. And they control.
But it is they who are out of control… and unstoppable.
America's Gulag Industry
According to U.S. civil rights attorney Harvey Silverglate, the typical American commits three felonies a day in his own home without realizing it.
Former Virginia senator Jim Webb describes the police state that results:
What Webb doesn't mention is that putting other people in jail pays – for some. America's gulag industry makes money on every prisoner and lobbies for harsher minimum sentences.
It pays so well that the profiteers don't merely "go abroad in search of monsters to slay," as one of America's founding fathers, John Adams, warned against. They create monsters.
Did you know that the FBI entices, ensnares and enables young men to plan acts of "terrorism"?
Recently, FBI agents arrested three sad-sack men in Brooklyn and charged them with conspiring to travel to Syria to fight for ISIS.
None of the men could have done so without FBI help. They were broke. And one was unable to follow through because his mom had taken away his passport.
These were the perfect terrorists – created, nurtured, and funded by the FBI.
A Super Bowl with Mortal Stakes
Overseas, the situation is much the same. In the absence of real enemies, the deep state has created phony ones. A subscriber explains:
After the dissolution of the Soviet Union in 1991, the deep state faced its biggest threat: It no longer had a plausible enemy.
Since then, it has brought the U.S. jackboot down on a series of pseudo-enemies – all laughably inferior to the Pentagon.
But with all its firepower… all its superior military technology… and all its trillions of dollars in spending… did a single one of America's wars since the end of the Cold War result in a clear or honorable victory?
Instead, one fumbled mess led to another. Enemies became angels; allies became devils.
You'd think this would bring the American public to its senses. Maybe all this spending, blustering, and bombing is not really paying off? Maybe it is creating more enemies than it defeats?
But that is just the point: For the plain people, a war is little more than a Super Bowl with mortal stakes. They holler and hoot for the Homeland team. They salute their heroes and hate the enemy, even when they're not sure who the enemy is.
Those who do the thinking, on the other hand, have another agenda. They are just as happy with a defeat as a victory.
Victory, and the peace that followed World War II, almost put them out of business. It is war, not peace, that pays. And war pays well.
The U.S. "security" industry has about $1 trillion a year in spending power. You can buy a lot of votes with that kind of money. And you can build a lot of mansions in the Virginia suburbs.
The deep state is now in charge. The fix is in.