On Credit Expansion & Constant War

The two organizing principles of our system.

A few weeks ago, on a trip to Maui to research the Lahaina fire, I had dinner with Ed Dowd at the Four Seasons. It was a balmy evening and our table had a nice view of the Alalākeiki Channel. Ed told me about his latest research on the steadily elevated trend of excess death and disability since 2021, and we marveled at the sheer, eerie strangeness of the fact that over two-thirds of mankind had been hastily injected with an experimental, bio-pharmaceutical product.

We also talked about the latest evidence that SARS-CoV-2 was created in a Wuhan lab using mostly American biotechnology, the war in Ukraine, the acrimonious political divisions in the United States, and the strange fact that we now always seem to be lurching from one crisis to the next. Each new crisis begins with new “unforeseen” disaster that produces a fresh eruption of extreme anger, resentment, and other negative emotions.

“Why so many crises?” I asked Ed. “Is our political class now simply unable to manage affairs in order to prevent crises?”

“It’s because our system of constant, out-of-control credit expansion can only be justified by a state of constant and dramatic conflict. War is the organizing principle of our financial system and political economy—war against emerging infections diseases, war against all of the world’s bad guys, war against climate change, war against each other.”

I was reminded of Ed’s remarks last night at dinner with Dr. McCullough as he marveled at the way the U.S. government now spends money.

“In recent years a trillion dollars has become nothing for the federal government,” he observed. “A trillion here, a trillion there. What’s the difference? Nowadays every crisis that comes along seems to automatically result in a 100 billion payout from the U.S. government.”

To be sure, the beneficiaries of this extraordinary largesse are always interests that have powerful lobbies ensconced in Washington D.C. such as the financial, bio-pharmaceutical, defense, and now “green” industries.

Why don’t We the People recognized our Credit Expansion-Constant War system for what it is and stop falling for its tricks? The answer is that we are perennial and incorrigible suckers.

Already at the Constitutional Convention, Madison pointed out that war has always been used by the ruling class as means of augmenting and maintaining its power and distracting and defrauding the citizenry. As he observed in a 1795 letter:

Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. In war, too, the discretionary power of the Executive is extended; its influence in dealing out offices, honors, and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force, of the people. The same malignant aspect in republicanism may be traced in the inequality of fortunes, and the opportunities of fraud, growing out of a state of war, and in the degeneracy of manners and of morals engendered by both. No nation could preserve its freedom in the midst of continual warfare.