Millions of people are about to enter a financial purgatory, becoming little more than modern-day slaves.
While they’ll be reported by the media as those “evicted” or “foreclosed on”, if we define a slave as someone forced to work for another by existing legal circumstances or approved cultural norms, then that’s exactly what these people should actually be called: slaves.
Too harsh?
Allow me to make my case.
Being 'One Step Removed' Is All Evil Needs
Slavery can exist when there’s a system that allows it. It’s a combination of morals (or, rather, lack thereof) and laws that allow one human to control the daily actions of another. Neither a slave’s time nor personal freedom belong to them.I learned a long time ago that most humans, at best, have what we might call ‘shallow’ morals. There are chemical engineers who would never dump a toxin directly into a child’s cereal bowl, because that would be immoral; but they’ll casually and routinely inject toxins into groundwater tables (which may eventually end up in the local milk supply) because they have an EPA permit to do so.
If questioned, these same engineers know that there’s a chance, maybe even a very good chance, that the injected chemicals could end up somewhere unintended. But because their actions today are one step removed from the consequences of tomorrow, that’s enough to get them off of a moral hook.
In other words, their morals don’t extend past that first action – they stop right there. They are therefore ‘shallow’ morals.
‘Deeper’ morals would include a sense of responsibility for the entire lifespan of the chemicals in question.
Similarly, mortgage companies are staffed to the gills with people who could never themselves forcibly eject an elderly person and all of their possessions onto the curb outside the home they’d lived in for 50 years. It would be morally upsetting.
But they routinely submit the paperwork that causes these things to happen nonetheless.
Luckily for the mortgage company workers it’s the sheriffs deputies who actually handle the evictions. Luckily for the sheriffs involved, somebody else’s decision was responsible for the eviction. Both the sheriffs and the mortgage company employees are similarly insulated from any moral qualms because neither was directly responsible for Granny or Grampa’s plight. They’re just “following orders”.
One step removed. That’s all it takes.
The point here is that as long as people have just one degree of separation from their actions, that’s sufficient to dodge any moral qualms that may arise. What we cannot stomach to do ourselves can be more easily overlooked if someone else is performing the deed.
The Immoral Fed
The largest and most obvious one step removed ‘dodge’ in play right now is the US Federal Reserve’s evasion of moral responsibility for making the wealth gap explode wider, destroying the financial futures of tens of millions of American households.After printing up a bubble that ruined many in the 1990’s, eventually bursting in the year 2000, the Fed set about blowing an even larger bubble. That burst in 2008. And now they are back at it again.
Every step of the way, the Fed policies resulted in the rich getting richer, the middle classes and the poor being financially eviscerated, and future generations getting hosed.
How do the Fed’s staffers sleep at night?
By delusional thinking like this:
(Source)
The necessary one degree of separation for Jay “pants on fire” Powell to say such obviously flawed things is provided by “the markets”, which is where the trillions of dollars freshly printed by the FEd quickly end up.That goosed markets then benefit the already-rich is simple to deduce. Those who own lots of stocks and bonds as well as those who operate the most intimate details of the financial machinery are rewarded instantly by higher prices. They become instantly richer. Which means they can afford to buy more ‘real’ things like land, buildings, businesses, factories, gold, fine art – you name it.
Well-connected entities like BlackRock are actually in bed with the Fed, getting richly rewarded merely for helping it spend its vast gobs of newly-created currency :
BlackRock Is Bailing Out Its ETFs with Fed Money and Taxpayers Eating Losses; It’s Also the Sole Manager for $335 Billion of Federal Employees’ Retirement FundsJune 4, 2020
Today [June 4, 2020], BlackRock has been selected in more no-bid contracts to be the sole buyer of corporate bonds and corporate bond ETFs for the Fed’s unprecedented $750 billion corporate bond buying program which will include both investment grade and junk-rated bonds. (The Fed has said it may add more investment managers to the program eventually.)
BlackRock is being allowed by the Fed to buy its own corporate bond ETFs as part of the Fed program to prop up the corporate bond market. According to a report in Institutional Investor on Monday, BlackRock, on behalf of the Fed, “bought $1.58 billion in investment-grade and high-yield ETFs from May 12 to May 19, with BlackRock’s iShares funds representing 48 percent of the $1.307 billion market value at the end of that period, ETFGI said in a May 30 report.”
No bid contracts and buying up your own products, what could possibly be wrong with that? To make matters even more egregious, the stimulus bill known as the CARES Act set aside $454 billion of taxpayers’ money to eat the losses in the bail out programs set up by the Fed. A total of $75 billion has been allocated to eat losses in the corporate bond-buying programs being managed by BlackRock. Since BlackRock is allowed to buy up its own ETFs, this means that taxpayers will be eating losses that might otherwise accrue to billionaire Larry Fink’s company and investors.
(Source)
On the one hand, BlackRock is busy buying all sorts of things to stuff on the Fed’s balance sheet.
On the other hand, BlackRock has access to unlimited capital at the most favorable terms/prices in the world.
On a third hand, BlackRock is busy buying up distressed properties from recently foreclosed Americans who couldn’t manage to stretch a $1,200 stimulus check across 8 months of being out of work.
Add it all up and these recently dispossessed Americans will find themselves no longer owning a home. Instead, they’ll rent one from the no-bid contract winners like BlackRock, who were literally hand-picked by the Fed.
When there’s no money to be found to help working-class families, you can be certain there are still unlimited billions available to keep outfits like BlackRock supremely well incentivized to… uh, keep doing what they already were doing anyways: Getting obscenely rich.
Now, instead of working for themselves to pay off their own homes, these newly dispossessed Americans will still have to live somewhere. Many of them will end up renting from Wall Street entities like BlackRock.
How do I know this? Because that playbook page already exists. It’s an observed reality. It’s been done before and it will happen again.
We saw this in the aftermath of the housing crash/Great Financial Crisis:
When Wall Street Is Your LandlordFeb 2019
[T[he government incentivized Wall Street to step in. In early 2012, it launched a pilot program that allowed private investors to easily purchase foreclosed homes by the hundreds from the government agency Fannie Mae. These new owners would then rent out the homes, creating more housing in areas heavily hit by foreclosures.
Between 2011 and 2017, some of the world’s largest private-equity groups and hedge funds, as well as other large investors, spent a combined $36 billion on more than 200,000 homes in ailing markets across the country. In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012; today, institutional investors own at least one in five single-family rentals in some parts of the metro area.
I talked with tenants from 24 households who lived or still live in homes owned by single-family rental companies. I also reviewed 21 lawsuits against three such companies in Gwinnett County, a suburb of Atlanta devastated by the housing crash. The tenants claim that, far from bringing efficiency and ease to the rental market, their corporate landlords are focusing on short-term profits in order to please shareholders, at the expense of tenant happiness and even safety. Many of the families I spoke with feel stuck in homes they don’t own, while pleading with faraway companies to complete much-needed repairs—and wondering how they once again ended up on the losing end of a Wall Street real estate gamble.
(Source)
In today’s reality, the Federal Reserve is deciding, unilaterally and without any effective oversight or requiring a single vote from a single American, who should be the winners and who should be the losers.
Should we be surprised that the big institutions are the winners and ‘we the people’ the losers?
To be fair, this isn’t BlackRock’s fault, right? It’s simply how the system is currently set up. It’s just the prevailing legal and moral framework, right?
What do they say on Wall Street to point out the one step removed angle: “Don’t hate the player, hate the game”? Well, maybe that works in pro basketball. But in finance, where the players have a strong say in writing the rules, I don’t think that saying provides much air cover.
Here in August 2020 after the coronavirus (combined with a desperately poor series of managerial decisions by politicians and career health ‘authorities’) laid waste to the economy, it’s perfectly clear that much actually was learned from the 2008 crisis.
The wealthy learned that you can pretty much get away with anything you want. And so they’re at it again.
Corporations learned to hoover up the free money as fast as possible.
Speculators learned that the Fed would always cover their losses and to ‘buy the dip.’
Nowhere along the way did anybody seem to learn the importance of community, watching out for your fellow citizens, having integrity, or caring about the future. Savers and the prudent alike have been literally punished for being responsible.
Finding The Way Out
Once you see through the ‘one step removed’ lens, you’ll begin to see it everywhere.Too many people do things that aren’t even remotely justifiable (let alone moral) once the totality of the actions are taken into account.
A corollary to this is that the measure of a person can be observed in their actions when nobody is looking.
Far more impressive than the thousands YouTube clips showing a supposed samaritan help an unfortunate soul (while a camera just happens to be recording from a perfect angle followed by a quick upload to 8 different social media channels) is the person who helps another when no one else is there to watch.
“The system” is providing the necessary legal and moral cover for BlackRock and other similarly fabulously wealthy parties to sweep in and take advantage of current circumstances to make a few billion extra bucks.
When the dust settles after the pandemic subsides, we’ll find that another large fraction of the assets of our nation – it’s houses, soil and productive enterprises – will have been transferred (again!) to the tiny minority already at the top of the wealth pyramid.
The process used will continue to be simply this: the Fed prints new currency out of thin air, hands it to Wall Street, which in turn buys up the productive assets of the country. If challenged, each party has its own ‘one step removed’ cover story ready to go.
Once upon a time, our cultural and legal principles sadly allowed the productive output of people called slaves to belong to people we called slave owners.
Today ,there’s a codified system of financial rules and a supporting legal framework that assigns the productive output of the poor and middle classes to corporate owners.
The former process was direct. The latter process has the same outcome; it’s just simply one step removed.
So how do we free ourselves from the shackles the system is trying so hard to place us in?
In Part 2: The Way Out, I share the strategies I’m implementing in my personal life/homestead/community to build wealth that can’t be easily stolen by the printing press or over-reaching authorities.
The truth is we live in an exceptionally challenging time: for our wealth, our civil liberties, and our ability to pursue happiness.
There are no guarantees except this: to do nothing is to walk willingly into the trap being set for you.
Click here to read Part 2 of this report (free executive summary, enrollment required for full access).
This is a companion discussion topic for the original entry at https://peakprosperity.com/one-step-removed/
Much of Peak Prosperity is about preparing, it’s good that we can help each other to be more fully prepared.