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Loving the Deep State, Sincerely

Nothing to hide or fear. Right...?

CLOWNS to the left of us...jokers to the right – what a hoot it is to watch them jump and howl, writes Bill Bonner in his Diary of a Rogue Economist.

Trade barriers...LGBT bathroom policies...the Dow...Elizabeth Warren...Rudolph Giuliani...unemployment...quantitative tightening...Canadians sneaking across the border to buy our shoes – there's no shortage of louche entertainment in this week's events.

But what comes next? We learn from the papers that computers can beat us at chess, write better essays, and drive our cars.

So far, so good.

Alas, these same computers can also pick our face out of a crowd...cancel our credit cards...and take away our passports. Using algorithms and Big Data, they can also identify us as "undesirable"...or worse.

That's when your correspondent sees the scaffold going up in front of him...and there is the hangman approaching with a noose in his hands.

Last week, a couple of reports added to his soucis.

First, the IRS announced that it would block passports for 362,000 Americans who are late on their taxes.

From where in the Constitution does the tax collector get the right to confine citizens who have never been convicted of a crime? We don't know.

We believe our own accounts with the IRS are in good order. But the "tax code" had 74,608 pages in 2016; there is plenty of room for disagreement, ambiguity, and interpretation.

Our own tax return is more than two inches thick. It is prepared by professionals.

Could they make a mistake? Of course they could. Could the IRS make a mistake? Or worse, intentionally try to make life difficult for us?

It would never do such a thing, you say.

In 2013, the IRS apologized for targeting conservative groups for extensive auditing. It admitted that it had given especially harsh treatment to groups with "tea party" or "patriot" in their names and promised it wouldn't do it again.

Of course, it won't. And it won't make mistakes, either.

Already, in addition to the IRS's "no passport" list are the feds' "no fly" and "hit" lists. An interesting feature of these lists is that you never know if you are on them...or why. The feds don't have to prove anything.

An interesting case arose recently wherein a man found out, apparently by accident, that the feds were trying to kill him.

He went to a wedding in the Middle East...and in came a missile attack. Who were they shooting at? Then, he realized it was him! He thought it was an accident; the spooks had mistaken him for someone else.

But there was nowhere to go to appeal...no court in which he could prove his innocence. The whole matter was hidden from view, behind a sordid screen of "national security."

Meanwhile, in May, China officially began its "social credit" system. The idea is to amalgamate electronic sources of information on each of its 1.4 billion citizens and then target them for rewards or punishments, depending on their scores.

The Week magazine was on the case:

"Government documents show a plan to block poorly scored citizens from air or rail travel for up to a year, though perhaps less for minor infractions like leaving a bike parked on a footpath. More than 7 million citizens have already been blocked from travel, Human Rights Watch reports, for offenses like 'insincere' apologies."

For the first time in history, the internet, with its electronic surveillance, and the collusion of data accumulators – Google, Facebook, Amazon, and others – make it possible for the authorities to control and manipulate every aspect of life.

Algorithms can now do what used to require whole squads of spooks, snitches, and sinister agents.

Did you ever attend a meeting of the group Americans for Limited Government? Did you ever talk to a known undesirable? Do you believe Congress is run by a bunch of incompetent crooks? Do you read the Diary? Are you insincere?

Put away the waterboards. Send the torches and pliers back to the tool shop. There is no longer any need to ask, let alone to torture. The feds already know everything.

The National Security Agency (NSA) has been monitoring our telephone conversations for years. Amazon, Facebook, Google, and others know what we do, what we want, and even what we think. And now, Big Technology is working with the feds to use this data to control us.

Again, back in China...The New York Times:

"In some cities, cameras scan train stations for China's most wanted. Billboard-size displays show the faces of jaywalkers and list the names of people who don't pay their debts. Facial recognition scanners guard the entrances to housing complexes. Already, China has an estimated 200 million surveillance cameras – four times as many as the United States."

That's just one piece of the system. The data flow in from GPS, social media, credit cards, banks, job sites – just about everywhere.

Then, the feds can manipulate outcomes simply by editing the "news"...or denying access to important services...or applying individualized rewards or penalties. Even highway tolls can be adjusted for each car, depending on what behavior the authorities want to modify.

The New York Times again...

"This is potentially a totally new way for the government to manage the economy and society," said Martin Chorzempa, a fellow at the Peterson Institute for International Economics.

"The goal is algorithmic governance," he added.

Just 18 years ago, America's five largest corporations were companies that provided essential goods and services – ExxonMobil, General Electric, Ford, General Motors, and Walmart.

Now, the five largest corporations all truck in data: Apple, Amazon, Alphabet (Google), Microsoft, and Facebook.

And they are using this data – in collusion with the feds – to create a Deep State paradise.

"But what do I have to fear," asks the good citizen? "I don't do anything wrong. I have nothing to hide."

Here at the Diary, we have a sunny disposition and undying faith in public officials. What do we have to worry about? After all, the "government is all of us," Hillary Clinton assured us. It would never do anything that wasn't for our own good, would it?

We are serene...and overjoyed, of course.

With so much new control, the Deep State will help us be better people...never jaywalking...never speeding...never trying to save on our taxes...and certainly, never, ever criticizing our democratically elected leaders, no matter what numbskulls they appear to be.

In short, it will work like a lobotomy, helping us be model citizens.

We're all for it. Sincerely.

NSA, are you listening?

Bill Bonner has co-authored a number of New York Times Bestsellers including Financial Reckoning Day, Empire of Debt and Mobs, Markets and Messiahs. In his own opinion, Bill's most recent title, A Modest Theory of Civilization: Win-Win or Lose, is his best work yet. Bill also founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group have exposed and predicted some of the world's biggest shifts since that time, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and more recently the election of President Trump.

See full archive of Bill Bonner articles

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