Charles Hugh Smith – If you type Deep State into the custom search window in the left sidebar, the search results fill 10 pages. I think it is fair to say I have long had a deep interest in the Deep State.

The Deep State is generally assumed to be monolithic: of one mind, so to speak, unified in worldview, strategy and goals.

In my view, this is an over-simplification of a constantly shifting battleground of paradigms and power between a number of factions and alliances within the Deep State. Disagreements are not publicized, of course, but they become apparent years or decades after the conflict was resolved, usually by one faction consolidating the Deep State’s group-think around their worldview and strategy.

History suggests that this low-intensity conflict within the ruling Elite is generally a healthy characteristic of leadership in good times. As times grow more troubled, however, the unity of the ruling Elite fractures into irreconcilable political disunity, which becomes a proximate cause of the dissolution of the Empire if it continues.

I recently proposed the idea that Wall Street now poses a strategic threat to national security and thus to the Deep State itself: Who Gets Thrown Under the Bus in the Next Financial Crisis?(March 3, 2014)

Many consider it “impossible” that Wall Street could possibly lose its political grip on the nation’s throat, but I suggest that Wall Street has over-reached, and is now teetering at the top of the S-Curve, i.e. it has reached Peak Wall Street. Have We Reached Peak Wall Street?

Consider what the extremes of Wall Street/Federal Reserve predation, parasitism, avarice and power have done to the nation, and then ask if other factions within the Deep State are blind to the destructive consequences. Is the Deep State Fracturing into Disunity? (March 14, 2014)

Frequent contributor B.C. recently submitted two working papers from the Deep State network that suggested rampant financialization was harming the real economy. This is powerful evidence that the corrosive consequences of financialization on the stability of the real economy is filtering into the group-think hive of the Deep State Network:

Why does financial sector growth crowd out real economic growth? (Bank for International Settlements) After studying how financial development affects aggregate productivity growth, we concluded that the level of financial development is good only up to a point, after which it becomes a drag on growth, and that a fast-growing financial sector is detrimental to aggregate productivity growth.  Rethinking Financial Deepening: Stability and Growth in Emerging Markets (International Monetary Fund) Continue reading →