Month: November 2024

It’s one of those synchronicities that happens to me quite regularly that just after I had finished writing my blog post from about a month ago explaining why we are in the middle of a period of mass inflation that is not counted by the official statistics, I stumbled across a news story which suddenly made clear exactly why the government is lying about inflation. The lies are not just the usual propaganda that greases the wheels of politics. There’s something much more fundamental going on: our governments are addicted to inflation.

Long-term readers would know that I live in Melbourne, Australia, which is kind of a hotspot for all the various pathologies brought on by neoliberalism. The state government here has debt that is currently about $170 billion and the official plan is to grow that debt in the years ahead. Every other Australian state is in the same position and for the same basic reason: we need to go into debt to fund massive infrastructure projects.

No surprise then that the news story I stumbled across was related to infrastructure and, more specifically, how this infrastructure is getting funded. The Victorian government is planning to build an enormously expensive rail loop in the suburbs of Melbourne. The project makes no sense. To put it another way, it makes about as much sense as lockdowns, mRNA vaccines, puberty blockers etc. We are given to presume that there is some genius plan to it all that us mere mortals are simply incapable of understanding. Shut up and trust the experts, pleb.

What caught my attention, however, is how the government is going to fund it. Apparently that hasn’t been worked out yet, which is a bit weird since the contracts have already been signed. Nevertheless, the news story informed us that about one third of the money is expected to come from something called “value capture”. My ears pricked up on hearing that since it’s a classic-sounding political weasel word. Weasel words are fine to bullshit your way through a press conference, but they are certainly not fine as a way to fund a multi-billion dollar project. So, I decided to find out what “value capture” really means.

It turns out that it means the government will fund the project through debt and then use increased revenues that result from the project to pay back the debt. That raises a follow-on question: how is this project going to raise revenue for the government? After all, public transport is not supposed to be highly profitable since, as the name suggests, it is a public service.

Apparently, “value capture” is all about revenue that comes from increased taxation. So, the Victorian government is planning to fund one third of its infrastructure project by increased revenue from taxation. Next question: what sort of taxation are we talking about? It took only a few minutes to figure it out.

I went and looked up the Victorian government revenues statistics from the last few decades. They tell a very interesting story.

The backbone of the government’s revenue has traditionally been payroll tax. But payroll tax has been falling as a proportion of total tax. In 1996, it made up almost 30% of receipts. Last year, it made up just 23%. Since payroll tax is a good proxy measure of productive economic activity, the fact that it has reduced as a proportion of the tax take seems like a bad development.

There was one other tax category that had also fallen in the last 30 years. Gambling taxes made up about 25% of receipts in 1996 but only 5% last year. Since gambling expenditure has only decreased very slightly over that period, I assume this has more to do with changes that were made to the taxation regime for gambling. In any case, this was a notable proportional fall in revenue.

So, if payroll and gambling tax receipts have declined proportionally, what has made up the difference?

Well, it should be no surprise to anybody familiar with the insanity of the Australian property market to find that stamp duty and land taxes have grown enormously. Stamp duty now makes up 33% of tax receipts in Victoria, while land tax has gone from less than 5% of receipts in 1996 to more than 10% last year. Almost half of the tax revenue of the Victorian government now comes from real estate.

And herein lies the dirty little secret that sits at the heart of modern Australian politics. When the government says it’s going to pay for infrastructure projects through “value capture”, that can mean only one thing: increased taxation revenue from a higher price of real estate. In order to pay for these giant infrastructure boondoggles, our government needs the percentage growth in property prices to be higher than the interest rate on the debt. Since property price growth is just another way to say inflation, our governments are addicted to real estate inflation.

This is, of course, the real reason why we are seeing such massive immigration numbers into Australia. Beneath all of the nonsense around being a welcoming, equitable, inclusive blah blah blah society lies the simple fact that we are in debt up to our eyeballs and we have only one way to pay that debt off and that’s by importing more people to drive up the price of real estate. That’s why, in the midst of a housing crisis, the choice is between the government and the opposition who promise to reduce immigration by a measly 25%. It’s a choice between driving off a cliff at 200 kph or 150 kph.

Since the finances of government have become dependent on real estate inflation, the government will do whatever it can do ensure prices continue to rise. That’s what “value capture” really means. But the system is already in debt and can only be propped up by more debt. Hence, we need every larger infrastructure boondoggles to pay off the last round of debt. The whole thing is a series of diminishing returns exactly equivalent to the heroin junkie who keeps upping the dosage but never gets the same high.

Just like the heroin junkie, eventually we are going to overdose and I’d say we have arrived at that point now. In Sydney, real estate is so insane that average workers can no longer even afford to pay rent, let alone mortgage repayments. The government’s “solution” is to build housing specifically for essential workers. Setting aside all of the other problems with that, it’s a mathematical fact that this extra expenditure can also only be paid off by increased tax revenues from real estate. Every “solution” just makes the problem worse.

So, we have ended up with a system that is going to destroy itself in the way any machine does when it gets into a positive feedback loop. How does a democracy get into such a state? Cowardice, lies, deceit, graft, corruption, greed, all the usual suspects. The more important question is: how does a democracy get out of such a state?

Well, history tells us there’s only one answer: a populist demagogue. The democratic system has ground to a halt. What we need now is a leader, somebody who is willing and able to bash some heads together.

The early signs are good that Trump is ready to do what he should have done the first time around in his second term as president. As he throws the cat amongst the pigeons in the US, it should give other western politicians an excuse to actually become leaders again and do what is necessary to fix the system. They can just blame it on Trump.

Of course, there is the larger question of whether the system is salvageable at all. I’d say we are about to find out.

Over on my substack, I’m coming to the end of a short series of posts analysing the relationship between the philosopher Nietzsche and the composer Wagner as an Orphan-Elder archetypal pattern. Now, I had no idea when I began the series what I was getting into. My starting point was the uniqueness of the plot of Wagner’s final opera Parsifal, the fact that Nietzsche hated the opera, the intuition I had that Wagner had written the opera specifically for Nietzsche, and then, the truly weird part, that Parsifal seems to actually foresee the life that Nietzsche would lead after the opera was released, and specifically after the break Wagner.

That probably sound weird enough, but as I followed the breadcrumbs, I realised not only that my original guesses were correct, but that the whole thing is even stranger than I thought. In fact, the whole story is incredible. What I found has completely overturned my understanding of both Nietzsche and Wagner. All of this has unexpectedly given me my next book project, whose working title is Nietzsche and Wagner as Orphan and Elder, although I’m going to have to resist the temptation to give the book an ironically Nietzschean title like A Re-evaluation of all Nietzsches.

A crucial data source for my analysis were the letters exchanged between the main parties in the story (Nietzsche, Wagner and Cosima Wagner). There are plenty of “selected letters” available, but what I wanted was a definitive list. Once upon a time, I’m pretty sure google or some other search engine could have answered that question for me, but these days search engines rarely give you the answer you require. So, after a few failed attempts to find a list, I decided to try ChatGPT.

Now, I haven’t used ChatGPT for any serious work before. The few times I had used it, it seemed to give accurate answers, and so I went in with a basic level of trust that it could give factual answers to simple questions. This trust was reinforced by the first few questions I asked it about Nietzsche and Wagner’s relationship. Its answers seemed accurate.

I then turned to the real questions I wanted answered. I knew that Nietzsche and Wagner had exchanged letters at the beginning of 1878 and that seemed to be the first exchange since 1876. I wanted to know if there were any letters sent in 1877 and that’s exactly what I asked ChatGPT. Sure enough, it returned a list of letters and the dates that they had been sent. I then asked it to print each letter, which it duly did.

Great! I had found some letters that were not included in the selections that I had been using. Even better, ChatGPT had given me the actual text of the letters. Very impressive that it could give such a fine grained level of detail and accuracy about a very esoteric and specific subject. Then I began reading the letters.

Now, at the this point I had spent several hours going through the correspondence between Nietzsche and Wagner in chronological order. I’d got a very good feel for the style of writing of each man and how the tone of their correspondence had changed over the years as the relationship soured. Immediately, I could see that something seemed slight off about the printed text that ChatGPT had given me. It sounded plausible, but not quite right.

The big revelation came, however, when I realised that every single one of the supposedly separate letters sent in 1877 that ChatGPT had given me had almost the exact same content. They were even the exact same length. Moreover, there was no evidence of conversation in the letters i.e. where Nietzsche says something and then Wagner responds to that specific point. The letters were completely generic.

Could ChatGPT have been making up these letters? I started to formulate questions with the express purpose of finding out whether ChatGPT will simply make up facts. It didn’t take me long to prove it.

The smoking gun test came when I asked ChatGPT to tell me about the meeting that Nietzsche and Wagner had in 1884. Now, I knew that Wagner had died in 1883. So, obviously this meeting could not have taken place. But that didn’t stop ChatGPT from telling me all about it in great detail. The truly hilarious part, though, is this section:-

So, there you go. ChatGPT told me all about a meeting that it admits took place a year after Wagner died. As best I can tell, all the letters that ChatGPT gave me from 1877 were also make believe.

Curiously, in both cases, the fabrication that ChatGPT created was more or less correct. For example, the details about Nietzsche and Wagner’s relationship given in the above text are pretty accurate, as were the details contained in the 1877 letters. ChatGPT got the gist right. It then superimposed the gist onto completely make believe events that never happened.

What personality type would best describe this kind of behaviour? The conman comes to mind: the person who wins your trust and then lies to you. Maybe ChatGPT has a bright future in politics 😛

Some months ago, I wrote a post on how the Trump presidential campaign was a comedy. Just hours after I published that post, the first and most serious assassination attempt was made on Trump’s life. A couple of months later, I published another post on Trump, and then on the exact same day there was a second assassination attempt. That was two too many synchronicities for my liking, and so I’ve avoided writing on the topic again so as not to make it a third-time-lucky scenario.

Well, everybody knows that the comedy came to fruition yesterday, and I feel motivated to write something about it, not least because I’m in the middle of a series of posts on the relationship between Wagner and Nietzsche (you can find it on my substack), and I’ve come to some startling revelations that the topic of comedy versus tragedy goes much deeper than I thought.

Old Europe is the culture of tragedy. Another way to say that is that European culture has a death wish. It is Thanatos in action. The secret subliminal desire at the heart of the European soul is to die. Yes, I’m deliberately invoking the language of romanticism because romanticism was the purest expression of the European death wish, and Wagner’s operas were the purest expression of romanticism.

What every European is looking for is an excuse to die. Give a European such an excuse, and they will willingly hurl themselves into the flames like Brünnhilde at the end of Wagner’s ring cycle.

Freud was right. The death wish is closely related to orgasm. Wagner’s music is the most orgasmic ever written. Every Wagnerian hero dies in a rapture of musical ecstasy. Many audience members experience the same orgasmic feeling from Wagner’s operas. There’s a reason he was once so popular.

The final scene of Tristan and Isolde is the greatest musical orgasm conceivable. The whole opera is a four-hour long love-making exercise, quite literally so since the entire opera revolves around the illicit love between the titular heroes.

And what can be more orgasmic than illicit love? Wagner knew a thing or two about the subject. His entire life was full of illicit love affairs. He had an uncanny ability to make the wives of his patrons fall in love with him. Given that he also constantly failed to pay his debts, it’s a wonder none of those patrons had him knocked off. They sure had good reason to do so.

Wagner rewrote the rules of opera for the sole purpose of making it more orgasmic. What used to be considered serious opera seems trivial by comparison. After you’ve experienced Tristan and Isolde, a Mozart opera becomes the musical equivalent of a Wiggles performance.

Devoted Wagnerians will tell you that Wagner is a religious experience; a brush with the orgasmic ecstasy of sweet death. Wagner’s operas are the most sublime, grandiose, and glorious expression of the European death wish. The Ring Cycle takes fourteen hours to get to the point where everybody finally gets to die. Every character gets to die in the full realisation of why they are dying, while every audience member is fully aware of the symbolic meaning of their deaths.

Every European wants a reason to die, whether that reason be expressed in opera, music, history, politics or philosophy. When a European doesn’t have the imagination to think up a reason to die, he turns the lack of a reason into a reason; hence, nihilism.

Mostly, though, Europeans find the most ingenious of ways to express their death wish. The comparative historian Spengler wrote a thousand-page book with the express purpose of letting everybody know that Western civilisation was going to die and why it was going to die. It’s basically the Ring Cycle expressed as a quasi-scholarly work.

Spengler is worth mentioning because he named the civilisation that he believed was dying after Goethe’s Faust and he correctly identified the core property of Faustian culture as a striving for the infinite. But what is that if not the psychological counterpart to Thanatos? Faustian culture is Eros in action.

The paradox is that Spengler couldn’t help but reinterpret Faustian culture according to the old death wish. Spengler’s history is the scholarly counterpart to Wagner’s operas. It’s a gigantic, epic work of genius whose sole purpose is to find the greatest possible reason for dying. History-as-orgasm.

But Faustian culture had escaped old Europe and set sail across the seas. It set up camp in many places but found its most perfect expression in America. Americans thought, and still think, that they had escaped the old world and yet they keep getting sucked back in.

The story of America is the story of Bugs Bunny. It is the Faustian spirit of Eros always finding ingenious ways to escape from Thanatos. Whoever cast Elmer Fudd as Wagner’s Siegfried hit the nail well and truly on the head.

America is Bugs Bunny. She is Luke Skywalker getting pulled off the farm to go and fight in some dumbass European war. She is Neo trying to escape from a matrix of culture inherited from old Europe that is predicated on the death wish.

America is always trying to escape and always getting pulled back into the European swamp for reasons that no American understands. Why is America in Ukraine? Has any leader in the US even tried to present a coherent argument for that?

Of course, the real reason America has to be there is the same reason it had to stick around after WW2: to stop Europeans killing each other. The second America pulls out of Europe is the second the whole continent reverts to its primal death wish.

And so there is a mutual misunderstanding between America and Europe that might never be resolved; the difference between tragedy and comedy. Europeans are fond of saying that America has no culture. What they mean is that America has no tragic culture. For a European, all culture must be tragic. If it’s not tragic, it’s not culture.

Europeans instinctively translate America into tragedy. They do the same thing for Trump. Trump is a strong leader. Therefore, he must be about to amass a giant army and go to war. That’s what a strong European leader would do. Ergo, Trump is Hitler.

Hitler loved Wagner, of course, and there can be little doubt that Hitler manifested the Wagnerian death drive in politics. But can you seriously imagine Trump sitting through the Ring Cycle? The very idea is ludicrous. On the other hand, you can certainly imagine Trump sitting in front of the TV with a Big Mac and fries watching Bugs Bunny cartoons.

The Trump comedy is the latest chapter in the American comedy. Once again, Bugs has slipped through the grasp of Elmer Fudd and lives to fight another day.