John Ergat Demonstrandum

They say be careful what you wish for. And, as is often the case, "they" are right.

As a kid, I wished the world favored the smart. I was a smart kid, and it seemed like the world - at least my world - was dominated by bullies and airheads. Might made right, just like in the times of old. My high IQ and love of learning were no match for popular dolts, so a portion of my childhood was wasted just trying to disappear into the background.

Unknown to me at the time, much of the adult world operated the same way. It didn't take a lot of intellect to have a respectable, enjoyable middle class existence in the world of the 1980s. The willingness to put in a full day's work (or, if protected by a union, a portion of a day's work) was enough to trump the potential impediment of a double-digit IQ. As I've mentioned before, most Jersey people had a nice house, a second house to rent out, and plenty of leisure time, and they worked as street cleaners and bin men.

The world did change, however, exactly as I hoped. My first indication was a cover story of California magazine titled "Revenge of the Nerds" with Steve Wozniak's smiling face and Apple-logo eyeglasses. It turns out the grey matter languishing in my head started to have value.

The Simple World

This post isn't about my misspent youth, however. I simply use that as a point of reference, because the gap between the fates and fortunes of the "smart" and "not as smart" has become grotesquely large. So much so, I'm starting to yearn for the days when the cavemen among us had some say-so.

It wasn't that long ago that the world was relatively easy to comprehend. Take the world political scene, for example. It was stone-cold simple: the USSR (and its myriad satellite states and sympathizers) on one side and the United States (along with the rest of the "free world") on the other. The ideological differences were clear and comprehensible, even to young people, and nuclear-based Mutually Assured Destruction kept the globe on edge but largely at peace.

But ask someone, even a person who is very well-read such as myself, to explain, say, the conflict in Syria. You'd get a blank stare. To truly comprehend the political problems of the world these days, you practically have to make a career out of it.

Consider the same yesteryear for central banks: for all their illustrious titles and grand offices, the job of the bankers used to be to move interest rates down when the economy needed stimulation (and could risk inflation) and crank them up if inflation needed to be suppressed. Elementary school children could more or less get this, and and on the nightly news, if David Brinkley stated that the Fed has moved interest rates up 1/4% or down 1/4%, Joe Sixpack could grasp what that meant and how it would affect him. The world, as a whole, was a pretty straightforward place to grasp.

History's End

Everything changed, of course, after the financial crisis. In the examples cited above (the world of work, and the role of central banks), something big affected each of them.

In the working world, several closely-related changes have conspired together to hollow out the middle class and create unprecedented deformations in wealth distribution. The majority of middle-class-supporting manufacturing jobs have been shipped overseas. The kinds of jobs available to people with sub-breathtaking intellect are such things as retail sales clerks, fast food deep-fat-fryer button-pushers, and the poor devils at health care facilities that have to collect the bedpans. If you don't have a Mark Zuckerberg brain, you would have been better off in the 1950s than the 2010s.

The central banks, of course, have changed drastically as well. In the throes of the financial crisis, I (very naively, it turns out) figured the Fed was all out of bullets, because interest rates were at 0. After all, for my entire life, I was aware of the Fed's role in turning the dial up or down on interest rates, but I assumed (again, naively) that once rates were at 0, all the Fed could do was sit back and hope for the best.

I couldn't have been more wrong.

As we all know now, our Central Bankers pledge to not monetize the debt was utter hogwash, and the globe is now in about $1 quadrillion debt. The rich among us are ecstatic, because they are richer than ever. Everyone else is, once you strip away the nonsense and get down to reality, isn't one iota better.

I'm not here to regurgitate about wealth inequality and central banks, however. That's been beaten to death for years. What I wanted to address was how the vast majority of the world is awash in willful ignorance about what is going on around them, mainly because, as the Facebook relationship status message says......it's complicated.

Enlightenment Requires Effort

What got me thinking about this was this recent article on ZeroHedge about how Carmen Segarra's whistleblower case is being dismissed out of hand by a federal court under the most corrupt of circumstances. Perhaps you recall Ms. Segarra is the woman who covertly taped the breathtakingly close relationship Goldman Sachs has with the Federal Reserve "regulators". This briefly was national news, but most citizens have the attention span of a gnat, so the story went away.

The ZH article showed quite plainly how the judge (Ronnie Abrams) and her husband are very tight with Goldman Sachs. The conflict of interest is screamingly apparent, but Ms. Segarra and her whistleblower lawsuit are S.O.L. because, well, Federal Judges tend to have a lot of sway when it comes to the law.

But here's the thing: taking the time to even have an awareness of this kind of thing is something 99.9% of the public isn't going to do. Endeavoring to do so isn't simple. It doesn't have a laugh track. And there's no Kardashian in it. They just. Don't. Care.

Ratchet this up several notches, though: consider for a moment what it takes to understand the economic state of the world today. Consider all the elements: quantitative easing; foreign exchange cross-rates; sovereign debt; the spider's web of relationships between the economies of Japan, China, Europe, and the United States.

The fact that you've even made it this far into this obscure post easily puts you in the 99th percentile in terms of people who are interested in, and read about, the topics I'm addressing. This is not mere flattery to butter you up, dear reader. I really do believe that. Never, ever underestimate the ignorance of the general public or its laziness. Today's world is really, really complicated, and it takes a Herculean effort to have a basic understanding as to what's happening all around us.

As foolish as I think Jonathan Gruber was to wreck his reputation (and enormous consulting income) by spouting off about the ignorance of the American voter, ummm, the fact is, he's kind of right. He's very right, actually. I'm reminded of George W. Bush's retort to the notion that people in the military must not be smart; he declared them "plenty smart", which was as patronizing as it was inaccurate. I'm sure the intelligence of soldiers would follow the same kind of bell curve that any body of humans would.

As George Carlin once said on this topic: "Think about how stupid the average person is, and then realize than half of the population is stupider than that."

If you have your doubts, take note:

+ Only half of people could answer which of these three major religions was the oldest: Judaism, Christianity, or Islam;

+ More people can name at least two of the Seven Dwarves than the name of their politicial representative;

+ More people can name each of the Three Stooges than the three branches of our government

In that kind of environment, what percentage of the population do you think could successfully and articulately explain what the central banks of the world have done to the world? Five percent? Two percent? I think even that is too generous an estimate.

It's not that the subject is breathtakingly complex, like learning Arabic or quantum mechanics. It's just that the effort required to understand this stuff at even a superficial level is pretty significant, and very few people are going to bother. Hell, I was absolutely crazy about Great Deformation, and that was a multi-week slog through a 700+ page book with not a single graph or table. Awareness in our modern world is a lot of work.

And that, my friends, is why the elite have it made in the proverbial shade. If the highest reaches of society were holding up banks with machine guns, that crime would simple enough for the common man to grasp, and he might actually agitate for prosecution.

But a complex scheme to saddle future generations of the masses with debt in exchange for the immediate gratification of the rich getting richer? They've already gotten away with it. The masses have enough hamburgers to eat and enough Kardashians to watch on the tube. They're going to stay blissfully ignorant and just keep scraping along.

The 1% have won. Most of the 99% don't know and, thus, don't care. And a tiny subset of the 99% who are clever enough to see what the hell is going on might find themselves envying their less-knowledgeable brethren, since ignorance is, at times like this, a blissful alternate to awareness.