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I watched Paul Ryan’s speech last night in amazement as it seemed so untethered to reality and then I thought about a book I’ve been reading, the second volume of Richard Evans stunning trilogy about the rise and fall of the Nazi Party. It’s called The Third Reich in Power and it covers the period from 1933 when Hitler became the Chancellor, to 1939 when he began his war of conquest. What is most stunning about the book is the role of Joseph Goebbels and the awesome propaganda machine that he built that was able to convince a German public of racial, scientific, economic and military theories that had no basis in reality. Goebbels’ main insight was, “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” But to do this you need what Goebbels called an organ–a medium of propaganda diffusion that constantly repeats the party line. For the Nazis the two main channels of communication were the Newsreel and the radio. Here is Evans on the newsreel.

The Weekly Review had to be shown at the beginning of every commercial film program. Stylized, cliche-ridden, couched in a thoroughly Nazified language of combat and struggle, delivered in a tone of unrelenting aggressiveness, …the newsreel’s relation to reality was at best only intermediate.

As to the power of radio, Goebbels was very clear

There is nothing at all that is without political bias. The discovery of the principle of absolute objectivity is the privilege of German university professors–and I do not believe that university professors make history. We make no bones about the fact that the radio belongs to us and to no one else. And we will place the radio in the service of our ideology, and no other ideology will find expression here.

Now in drawing contemporary parallels to the Republican capture of Talk Radio “in the service of their ideology” I am not trying to make any claims that their ideology is fascist. I am simply stating that Paul Ryan could not get up on a huge national stage and make such outrageous claims that the Associated Press notes are patently false, without a propaganda machine like Right Wing Talk Radio to assure his partisans that Black is White. When Romney and Ryan trot out the racist dog whistle that Obama is cutting the “work requirement for the welfare queens”, Fox News and Rush Limbaugh repeat the lie endlessly until it becomes a “truth” to their audience.

Ryan is a good looking messenger who can say he will protect Medicare, while he plans to turn it into a voucher program that every one knows will leave seniors holding the bag. He and Romney claims they will cut the deficit while in the same breath promising to increase military spending and cut taxes on the wealthy (for guys like Romney who make all of their money in capital gains their tax rate would be zero). It is a huge lie and yet you could read the Fox News report and never have an inkling of the massive prevarication.

Someday we will look back at the epic balkanization of our information economy brought on by the digital revolution and wonder how we arrived at a place where 45% of the populace could live in an alternative reality with their own set of facts about evolution, rape, marriage, contraception, climate change, war, economics and faith. They could live in a world of atomized content, where real science and economics never entered their minds. If Mitt Romney and Paul Ryan are successful, it will be because they understood that they could create their own reality.

It has been my contention for some time that one of the flaws of the Libertarian “perfect market” model of capitalism is that the rise of globalization has tended to exaggerate the jagged rhythm of free market growth that inevitably leads to periodic crises of overproduction. These in turn generate social conflicts which even the most authoritarian governments are not able to contain. Case in point comes this morning from China.

After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.

The Dry Bulk Index is a chart of global shipping tonnage and is as good a proxy for world trade as I know. Here is what it looks like since before the crash of 2008.

Perfect Market theorists think these overcapacity gluts are quickly self correcting. But the housing overcapacity in the US, Spain, China and Ireland have been going on for five years now. The worldwide auto industry is running at about 50% capacity and yet China’s “auto manufacturing capacity is on track to increase again in the next three years by an amount equal to all the auto factories in Japan, or nearly all the auto factories in the United States.”

There is no simple solution to these problems. My greatest fear is that much of the world could devolve into a dystopian nightmare in which increasing productivity brought on by automation and a global labor arbitrage crashes up against a reality of an overstretched global middle class no longer hungry to spend their every waking hour at the mall or the car dealership. This global goods glut arrives at the very moment that a combination of climate change, population growth and senseless farm policies have led to a potential global food crisis. The brilliant financial analyst Jeremy Grantham lays out the challenge.

We are five years into a severe global food crisis that is very unlikely to go away. It will threaten poor countries with increased malnutrition and starvation and even collapse. Resource squabbles and waves of food-induced migration will threaten global stability and global growth. This threat is badly underestimated by almost everybody and all institutions with the possible exception of some military establishments.

As I have said before, the Americas are capable of avoiding this crisis. We have all the resources needed both in energy, food and goods production. Asia, Europe,the Middle East and Africa will fulfill Robert Kaplan’s prediction of The Coming Anarchy: Shattering the Dreams of the Post Cold War in which tribal, ethnic and religious conflicts combine with resource depletion to destabilize much of the world order. The key to our survival will be to pull back from our role as the world’s unpaid policeman, rebuild our own production capacity and manage our natural resources with a view towards sustainability. I do not see either political party confronting this possibility, but I do think the Neo-con vision of Romney and Ryan would make a bad situation worse.

The reason the Todd Aiken rape comments have resonated so strongly is that they bring a bit of clarity to a race that was in danger of being dominated by the ad budgets of Karl Rove and the Koch Brothers. What Aiken and his good buddy Paul Ryan(pictured above) really believe about a number of issues was being cloaked by the feel good marketing campaign gloss of Plutocracy, Inc, the Rove and Koch operation. As has been pointed out for years, the 1% could never have a chance of putting their handpicked Private Equity Master of the Universe in the White House if they just ran on their economic plan (lower taxes for billionaires, kill the EPA and other regulators, privatize Medicare and Social Security). What they need to win is to get the social conservatives to vote against their economic interests in favor of their moral agenda of banning abortion with no exceptions, along with their other anti-gay, anti-immigrant, anti-poor, anti-women plans.

Fortunately for the Democrats, Todd Aiken is on a mission from God to win the Missouri senate race and so exhortations from mere mortals like Mitt Romney have no effect on his calculation. But the Democrats should not be too confident. The Republican voter suppression operation is in full swing in key states and the Kochs, Rove and Adelson still have $100 million to spend on advertising in the last two months. More importantly, as USA Today pointed out, their is widespread voter apathy with over 90 million people saying they won’t bother to vote.

A nationwide USA TODAY/Suffolk University Poll of people who are eligible to vote but aren’t likely to do so finds that these stay-at-home Americans back Obama’s re-election over Republican Mitt Romney by more than 2-1. Two-thirds of them say they are registered to vote. Eight in 10 say the government plays an important role in their lives.

Readers of this blog will note that I have been arguing for years that Aldous Huxley’s Brave New World was the most visionary of the dystopian masterpieces. The reason 90 million people won’t vote is they are too caught up in the lives of the Kardashians to care about Obama and Romney.

 The two most important dystopian fables of the future were Orwell’s 1984 and Huxley’sBrave New World. It turned out Huxley was right. With right combination of anti-anxiety drugs (Soma to Huxley; Valium, Prozac,etc to us) and the right entertainment (Huxley’s “Feelies”; our 3D and Reality TV) you don’t need Big Brother to keep the proles in line.

Perhaps Aiken’s strenuous statement of what he and Paul Ryan really believe will stir a few butts off the couch and into the voting booth. We will continue to be over-medicated and over-entertained, but the realization that a moron like Todd Aiken, who can make up his own science while serving on the House Science and Technology Committee, is actually the voice of the modern Republican Party ought to be pretty shocking to a public that is still half asleep.

From all the press coverage over the weekend, you would think that Paul Ryan was at the top of the Republican ticket. For those of us who have been having an intellectual battle with Libertarians for the past few years, it seems like this election might really be a referendum on the Koch Brothers Anarcho-Capitalist philosophy. Certainly Ryan is their favorite politician and water carrier as the Times points out this morning.

Less well-known are Mr. Ryan’s close ties to the donors and activists who have channeled Tea Party anger into a $400 million political machine, financed by a network of conservative and libertarian donors that now rivals, and occasionally challenges, the Republican establishment behind Mr. Romney.

Mr. Ryan is one of a very few elected officials who have attended the Kochs’ biannual conferences, where wealthy donors sit in on seminars on runaway government spending and the myths of climate change.

But it would be a mistake to focus on just Ryan’s efforts to bring an Ayn Randian philosophy to government where the Vice President would lecture the welfare “looters and moochers” in the language of John Galt, “We have no demands to present you, no terms to bargain about, no compromise to reach. You have nothing to offer us. We do not need you.” Ryan’s view of America as the continuing unpaid policeman of the world is pure Neocon, as the Wall Street Journal points out with pride this morning in a piece called “Paul Ryan’s Neocon Manifesto”.

Also, that he believes in free trade, a strong defense, engagement with our allies—and expectations of them. Also, that he wants America to stay and win in Afghanistan. Furthermore, that he supports the “arduous task of building free societies,” even as he harbored early doubts the Arab Spring was the vehicle for building free societies.

It tells us also that Mr. Ryan has an astute understanding of the fundamental challenge of China. “The key question for American policy makers,” he said, “is whether we are competing with China for leadership of the international system or against them over the fundamental nature of that system.”

But as Ronald Reagan’s Budget Director David Stockman points out this morning, the Ryan-Romney continuation of Neocon vision is a one way trip to nowhere.

Mr. Ryan professes to be a defense hawk, though the true conservatives of modern times — Calvin Coolidge, Herbert C. Hoover, Robert A. Taft, Dwight D. Eisenhower, even Gerald R. Ford — would have had no use for the neoconconservative imperialism that the G.O.P. cobbled from policy salons run by Irving Kristol’s ex-Trotskyites three decades ago. These doctrines now saddle our bankrupt nation with a roughly $775 billion “defense” budget in a world where we have no advanced industrial state enemies and have been fired (appropriately) as the global policeman.

Indeed, adjusted for inflation, today’s national security budget is nearly double Eisenhower’s when he left office in 1961 (about $400 billion in today’s dollars) — a level Ike deemed sufficient to contain the very real Soviet nuclear threat in the era just after Sputnik. By contrast, the Romney-Ryan version of shrinking Big Government is to increase our already outlandish warfare-state budget and risk even more spending by saber-rattling at a benighted but irrelevant Iran.

Ryan may be put forth as the soul of midwestern Catholic probity, but even in this pose, questions are being raised.

Paul Ryan, Mitt Romney’s vice-presidential running mate, sold stock in US banks on the same day he attended a confidential meeting where top level officials disclosed the sector was heading for a deep crisis.

The congressman on Monday denied profiting from information gleaned from the meeting on 18 September 2008 when Federal Reserve chairman Ben Bernanke, then treasury secretary Hank Paulson and others outlined their fears for the banking sector. His office said he had no control over the trades.

Public records show that on the same day as the meeting, Ryan sold stock in troubled banks including Wachovia and Citigroup and bought shares in Goldman Sachs, Paulson’s old employer and a bank that had been disclosed to be stronger than many of its rivals.

If Ryan’s excuse that this was not insider trading was that the trades were executed by his representative, can he swear that he had no communication with that representative after the meeting with Bernanke and Paulson? Ryan has boasted that he is an active investor and trader. Why all of a sudden does he act like his assets are in a blind trust? He will need to answer these questions.

As I said at the top, I welcome the addition of Ryan to the ticket. Romney was a total mushburger on policy, hoping to coast to the Presidency on Obama animosity. He realized that strategy was not working and has now thrown his fate to the ideas and pocketbook of the Koch Brothers. The election will decide whether we live in a democracy or an oligarchy;in a 21st Century world or a 19th Century fantasy.

A few weeks ago I wrote about the anomie that enveloped me when I attended the Aspen Ideas Festival. The sense that what was taking place in our economy and society was the effect of forces outside our control. The term used for this notion is globalization. So yesterday the New York Times put out a long piece about how through a combination of carrots and sticks we had gotten the Japanese auto manufacturers to put plants in America and hire American workers. The article asked this question.

For years, high-tech executives have argued that the United States cannot compete in making the most popular electronic devices. Companies like Apple, Dell and Hewlett-Packard, which rely on huge Asian factories, assert that many types of manufacturing would be too costly and inefficient in America. Only overseas, they have said, can they find an abundance of educated midlevel engineers, low-wage workers and at-the-ready suppliers.

But the migration of Japanese auto manufacturing to the United States over the last 30 years offers a case study in how the unlikeliest of transformations can unfold. Despite the decline of American car companies, the United States today remains one of the top auto manufacturers and employers in the world. Japanese and other foreign companies account for more than 40 percent of cars built in the United States, employing about 95,000 people directly and hundreds of thousands more among parts suppliers.

I posted the article on my Facebook page and got this rant back from John Papola.

Why should the corrupt crony thugs in DC prevent Americans from trading with other people just because of some stupid line on a map. The “globalization gospel” is called “freedom” and “free exchange” and its the roots of western civilization. Are you seriously proposing mercantilism? The 17th century called. It wants it’s defunct doctrines back.

But my response to John is that his vision of freedom in America is a mirage. In the U.S. those with power use it to insulate themselves from competitive forces by winning favorable tax treatment and other forms of what economists call “rent seeking.” I reject the notion that all of these changes that make it so hard to find jobs for people without college educations, are just the inevitable forces of technological change. Globalization was a choice on the part of capital to weaken the bargaining power of workers by using outsourcing. As the auto “insourcing” model proves, there is no inherent reason why U.S. workers can’t be just as productive as Asian workers. Because the Reagan administration (and every one to follow) made it easy for companies to close down factories and move jobs offshore, the rent seekers triumphed.

The irony of course is that I know John Papola hates rent seeking crony capitalism as much as I do. For a liberal like myself, it is anguishing that both Clinton and Obama have been just as obsequious to the wishes of Wall Street as Reagan, Bush 1 and 2. What we need is a new reform politics that will combine elements of market choice (such as our discussion on school vouchers) with a simple set of regulations that bring the extraordinary power of capital to heel. We will still need a smart government to build the roads, run the police and fire departments and provide a social safety net. My guess is that the Democrats are less in the bag to the 1% than the Republicans and so they are better positioned to be the messengers of reform. As I have said before, cashiering Tim Geithner and hiring Joe Stiglitz would be a good start for Obama’s second term.

We have been talking here for a while about the perils of automation. Yesterday a “rogue computer algorithm” almost crashed the whole stock market.

“The machines have taken over, right?” said Patrick Healy, the chief executive of the Issuer Advisory Group, a capital markets consulting firm. “When events like this happen they just reaffirm that these aren’t investors, these are traders.”

The errant trades began hitting exchanges almost as soon as the opening bell rang and came from a single New Jersey broker that specializes in computer-driven trading, the Knight Capital Group. Shares of more than 100 companies, including big names like Alcoa, Citigroup and Ford suddenly spiked up or down.

One has to ask the question of whether these “robots gone wild” are distorting the whole purpose of the capital markets to such an extent that we have to re-imagine the stock market. The first and most obvious move is to treat short term capital gains (stocks held less than one year) as ordinary income for tax purposes. I believe this would slow down the High Frequency trading, which has turned Wall Street into a casino that is unfriendly for long term investors.

Obviously the implications of “lights out algorithms” in many other fields are equally troubling. I have mentioned how ad networks are using algorithms to place ads on Pirate Networks in a way the advertiser never intended. Of course all of this bad conduct could be stopped. We just need to wake up before the computers start really causing havoc.