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Politics

The Hutch Report

The Russians Did It! (or did they)?

By | Politics, Psychology

The Russians completely destabilized the US political system and skewed the vote of the American public in favour of Donald Trump. They used platforms such as Facebook and Twitter, who were also implicated in this massive fraud. How could the US be intimidated and coerced so easily? Actually the question should be how much of this story is made up and how much is truthful? A question that, unfortunately, we are unlikely to find the answer to. 

The definition of the word propaganda is — information, especially of a biased or misleading nature, used to promote a political cause or point of view. Propaganda is a means of influencing people. Its principle goal is to persuade others to accept certain beliefs and ideas. Propaganda in modern times is now a more potent force than it has ever been. The dissemination of information via social media and the internet happens at warp speed and spreads like a virus. In addition to the methods of distribution, propaganda makes use of a number of tactics, many times used in tandem in order to gain the greatest impact. Here are a few examples:

Fear – A large number of psychological studies have found that humans will do more to avoid pain than they will to gain pleasure. We are hard wire with a fight or flight response which keeps us on our toes when fear is involved. It is therefore a potent propaganda technique. Just turn on the news and you will see the deliberate use of extreme ideas and symbols for the purpose of swaying opinion by causing deep, and at times irrational, fear.

Repetition – The classic brainwashing technique is to repeat an idea, word, or image over and over and over again until it becomes imprinted on the objects mind. When politicians focus on staying “on message,” meaning they repeat the same buzzwords and reinforce the same ideas in multiple public appearances and statements, they are using this technique. The media makes use of this technique. When Howard Dean was running for president he made a speech in Iowa where he yelled out “Yee Ha” to rally the crowd. This caused the death of his candidacy, as the media jumped on it and declared it unpresidential conduct. How did they persuade the public to accept this belief?  According to the Hotline, a Washington-based newsletter, cable and broadcast news networks aired Dean’s Iowa exclamation 633 times (and that doesn’t include local news or talk shows in the four days after it was made).

The Common Folk – With the recent rise of populism in the US and Europe, appealing to the common folk has become a propaganda technique. The goal is to make viewers feel that they directly connect and can relate to the message or meaning of the propaganda. Mark Zuckerberg went on a cross-country tour to meet blue-collar folks and soccer moms. This of course began to fuel rumours that he was considering an eventual run for president. It was noted that Obama said the word “folks” at least 348 times during presidential news conferences.

The Band Wagon – We previously wrote about this (here) in reference to the Bitcoin explosion. The interest in cryptocurrencies and Bitcoin has fuelled the use of propaganda from both directions, for and against its use. The idea here is that everybody is adopting it so you should too. Often the word “we” is used heavily to imply that everyone is in a situation or group together.

Demonizing – By characterizing an enemy or opponent as evil, vile, or dangerous, propaganda can appeal to visceral feelings of fear, disgust, and repulsion. Exaggeration is required, and this technique is particularly necessary for any political “smear campaign.” Donald Trump used this technique effectively in his presidential campaign. He implanted the idea of a dangerous, deep state and evil Hillary Clinton in the minds of many voters. How could you tell? It was so effective that Clinton became recognized as “Crooked Hillary” by his voting base. 

Paternalism – An individual’s need to feel protected and watched over is a perfect target for propaganda. For this reason, many governments will employ imagery and symbolism that evokes a sense of paternalism. The emphasis on a strong, fatherly authority is appealing to many consuming propaganda, making this technique extremely powerful in times of distress or crisis, such as in the use of Uncle Sam in military propaganda.

Victorious – Everyone wants to feel like a winner.  If a piece of propaganda can paint a candidate or group’s victory as certain and inevitable, then the viewer will want to join the group. This is why you will often hear a plea to “join us now,” before it’s too late. 

The Lie – This strategy requires an entire body of propaganda, usually across multiple mediums, and focuses on stirring up strong emotion by retelling or reorienting a major story or event to change people’s perception of the event. This technique ties together with other techniques like fear mongering, demonizing, and repetition. This is what we started the article with, “The Russian Conspiracy.” This story has been presented in loop from all angles, by a number of distribution methods for well over 18 months. Have you encountered it? Have you been influenced by the propaganda? Whether you accept it or not, you have certainly been coerced into forming an opinion based on information that may or may not be fact, without even being aware of doing it. Such is the power of propaganda.

The Hutch Report

WMD – Words of Mass Destruction

By | Politics, Psychology, Technology

On April 23, 2013, I was sitting at my desk watching the stock markets on my screen. I happened to be in a chat room with a number of other traders at that moment. Some were discussing their current Apple trade, others were concentrating on some options, and others just looking for their daily setups for their next trade.

I happened to be looking over at my twitter feed, when suddenly I saw this tweet show up from the Associated Press (This screen grab was taken by somebody else at the time before the twitter account was blocked and the tweet deleted).

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My first reaction was to tell the others. “Hey, did you guys see that a bomb just went off at the White House?” Just as the words came out of my mouth, the news began to spread like wild fire as more people became aware of the tweet. At that instance the stock market took an instant nosedive. Everybody started to scour all the other news sources to see if they could verify what we saw.

Just as quickly, the market reversed course and made a recovery. The Associated Press came out and said that the message was the work of a hacked @AP account. The account was immediately suspended by Twitter. Regardless, that tweet of an explosion at the White House was enough to tank the markets as much as 1% in those few seconds. The fact that the “fake” news was coming from a reputable source made the impact all that more powerful. Responsibility for the attack was later claimed by the Syria Electronic Army, a group that is reported to have the tacit support of Bashar al-Assad, although that could not be independently confirmed.

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The combination of a connected world, speed of delivery and the sheer volume of information seems to have created a weapon that we have never seen the likes of. At least, not one of this size. This weapon has been used in the past, but it has only been used sparingly and by only a few players at a time.  In addition, it was only implemented in certain situations in history.

So what has changed? Well, now this weapon is implemented daily. It is in the hands of many, although some wield more power than others, the small players still have the ability to make use of this weapon in a very efficient manner. The weapon is misinformation.

Why is it so powerful? Each time a reader encounters one of these stories on Facebook, Google, Twitter or really anywhere, it makes a subtle impression. Each time, the story grows more familiar. And that familiarity casts the illusion of truth. The more sensationalized a story, the more it has the ability to spread. A story that casts a wide net attracts a large number of viewers. In today’s connected world, a large audience translates to money.

Although many companies and individuals attempt to “stretch the truth” or outright create “fake news” as a strategy to gain followers there are many other motives to do so. The Government has employed a strategy of misinformation for years as a means of rallying support for their causes. On February 5, 2003, Powell appeared before the UN to prove the urgency to engage a war with Iraq. Powell himself stated later: “I, of course, regret the U.N. speech that I gave,” he said, which became the prominent presentation of their case. In May 2016, Powell said,  “At the time I made the speech to the UN, President George W. Bush had already made the decision for military action.”

Donald Trump has been the US President for over one year now, yet that has not stemmed the constant barrage of conspiracy theories around his win concerning potential collusion with the Russians. What it has done though is to present the power of misinformation in forming people’s opinions. Regardless of the fact that the stories we have heard are true or not, the seeds have been sown.

These false ideas that enter our psyche create feelings of doubt and suspicion. This in turn creates anxiety within the masses. The manipulative power of today’s social media tools (see here) coupled with our need to satisfy our addiction for more information, in order to quell these doubts, creates a powerful tool in the form of WMD, words of mass destruction.

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The Omnipotent Leader

By | Politics, Psychology

What is it that prevents people from admitting mistakes, feeling superior to all those around them, feeling as if their actions are above the law, the inability to feel that their actions are responsible for someone else’s misery? We have all worked with people who have varying degrees of the unshakeable belief that they can do no wrong. In our incredibly complex world, there are leaders and professionals that are absolutely convinced that they understand how the world works and how to solve problems in spite of the fact that time after time they are proven wrong. (You can read more about this in our piece “The Illusion of Understanding.”)

In 2009, at the height of the financial crisis, many wall street CEOs were put under the spot light as the leaders of the largest financial firms were brought before congress for questioning. However, in spite of the damning evidence put before them concerning the damage inflicted on the economy and individuals by these firms, the leaders seemed to feel removed from any or all responsibility. An example of this was made during an interview with the Times of London, where Lloyd Blankfein, CEO of Goldman Sachs was quoted as saying that Goldman Sachs was merely “doing God’s work.” Obviously admitting to understanding the agenda of a higher power greater than ours and professing to be part of it immediately places you in an obviously very privileged position.

Though not officially labeled a personality disorder, the God Complex is very similar to the Narcissistic Personality Disorder. The God Complex is a psychological illusion. The first person to use the term God Complex was Ernest Jones (1913–51). His description, at least in the contents page of Essays in Applied Psycho-Analysis, described the God Complex as belief that one is a god. It suggests a personality flaw in human beings, especially those with great power, who see themselves to be omniscient and omnipotent, and treat others as mere mortals. However, one does not have to be in a position of power to exhibit these traits. There are numerous examples of people displaying these personalities in the workplace which you have most likely encountered.

The God Complex tends to show up amongst a variety of professions, although, some professions are more likely to cause a God Complex than others, as they involve one person exerting a lot of influence on a large number of people. These professions include among others: Doctors, Politicians, Bureaucrats and Celebrities.

Research suggests that in the case of several people, the God Complex affected them AFTER being exposed to a lot of power over a period of time. Hence, it is likely that people get this complex after having spent a considerable amount of time in that particular profession. Once you know what this complex is, it is easier to understand why certain people behave the way they do although that doesn’t make them any easier to be around.

With his extreme narcissistic displays, Donald Trump has become the poster child for the God Complex. However, in this particular example, he demonstrated many of the traits associated with the complex well before becoming President. Rather than developing the complex, after having been in a position of power, it was his inflated view of himself that drove him to become President.

As President, Trump now finds himself in good company because in the world of politics the God Complex plays itself out each and every day. In fact, our current political and media culture can be seen as reinforcing the God Complex.

The question is how can problems be solved and solutions found when dealing with opponents that both display the God Complex? Neither side will think about backing down because they both feel superior to the other. The result is pretty much what we have seen play out in the arena of US politics. Rather than concentrating on what is good for the country, both sides are fighting to dismantle the other. It is a dangerous trait to have, as we have seen many nations brought down by leaders with an omnipresent display of the God Complex.

Here are a few extreme examples: Omar al-Bashir—Sudan, Kim Jong-il—North Korea, Robert Mugabe—Zimbabwe (recently dethroned), King Abdullah—Saudi Arabia, Seyed Ali Khamenei—Iran, Bashar al-Assad—Syria, and Nicolás Maduro – Venezuela.

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The Fight for Independence

By | Politics

What does it mean to be an independent person or an independent state or independent country?  At its most basic root it means that you are free from outside control; not subject to another’s authority. It means that you are not depending on another for livelihood or subsistence.

There are countless examples of secessions in history. People wanting to break away from being surpressed by governments and states in order to become independent and govern themselves. Unfortunately, the desire to avoid the relinquishment of power is as strong as the initial desire to gain power. For this reason, the fight for independence is often only accomplished through battle. Here are a few examples:

  • Austria successfully seceded from Nazi Germany on April 27, 1945. This took place after seven years of Austria’s being part of Adolf Hitler’s Third Reich due to the Anschluss annexation of Austria into Nazi Germany in March 1938.
  • On August 25, 1830, during the reign of William I, the Belgian Revolt occurred, which resulted in the Belgian secession from the Netherlands.
  • In 1825, soon after the Empire of Brazil managed to defeat the Cortes-Gerais and Portugal in an Independence War, the platinean nationalists in Cisplatina declared independence.
  • In 1960 the State of Katanga declared independence from the Democratic Republic of the Congo. United Nations troops crushed it in Operation Grand Slam.
  • In 1847, seven disaffected Catholic cantons formed a separate alliance because of moves to change the cantons of Switzerland from a confederation to a more centralized government federation. This effort was crushed in the Sonderbund War and a new Swiss Federal Constitution was created.

The greatest example in history of secession is that of the United States. On July 4th, 1776, in Philadelphia, Pennsylvania, the Continental Congress adopted the Declaration of Independence, which proclaimed the independence of a new United States of America from Great Britain and its king. The declaration came 442 days after the first shots of the American Revolution were fired at Lexington and Concord in Massachusetts and marked an ideological expansion of the conflict that would eventually involve France’s intervention on behalf of the Americans.

The first major American opposition to British policy came in 1765 after Parliament passed the Stamp Act, a taxation measure designed to raise revenues for a standing British army in America. Although this was eventually repealed there would be other issues finally leading to the colony to secede from Great Britain. The fact that a war was required in order for the colonist to gain their independence meant that the act was most likely an illegal one.

Yet, ironically, in that same country which is now the United States, the question has been raised, can a state legally secede from the Union? Many, including Supreme Court justice Antonin Scalia, suggested no. In a 2006 letter Scalia argued that a the question was not in the realm of legal possibility because 1) the United States would not be party to a lawsuit on the issue 2) the “constitutional” basis of secession had been “resolved by the Civil War,” and 3) there is no right to secede, as the Pledge of Allegiance clearly illustrates through the line “one nation, indivisible.”

Today the issue comes to the centre stage by way of Catalonia. Spain (known officially as “the Kingdom of Spain”) was assembled in the 15th and 16th centuries from various component kingdoms, some having lost their secession wars. Today, we are seeing a resurgence with the secessionist movement of Catalonia. Catalonia has a long history of trying to break away from Spain. The Spain we know now was born after the defeat of Valencia in 1707, of Catalonia in 1714, and finally with the last of the islands in 1715, during the War of the Spanish Succession. Since then, Catalonia, which has its own language, laws, and customs, has regularly struggled over autonomy with the central government in Madrid.

For hundreds of years, various Spanish leaders tried to outlaw the Catalan language and play down other aspects of the region’s culture. Official autonomy within Spain was granted to the Catalan government, known as the Generalitat, in the early 20th century, interrupted by a brutal crackdown under dictator Francisco Franco, and then restored a few years after his death in 1975. The financial crisis of 2008 has since reinvigorated the Catalonia desire for independence.

Not surprisingly, as we have seen countless times in history, the way in which the Spanish government and the sitting King, have decided to deal with it has been to attempt to surpress the Catalonian right to vote. They sent in armed forces in order to strong arm the citizens and block them from achieving their goal. However, as we have seen in history, the more you try and surpress the people the stronger their desire becomes. Yes, according to the Spanish constitution, the secession vote is illegal, as they normally are because no governments enjoy relinquishing control. Catalonia is a crucial part of the Spanish economy. Its 7.5 million residents represent 16% of Spain’s population, but the region accounts for 19% of Spain’s GDP and 25% of Spain’s exports.

The question of an individual’s right to independence is not as clear cut as it would seem. Human rights are the basic rights and freedoms that belong to every person in the world, from birth until death. They apply regardless of where you are from, what you believe or how you choose to live your life. They can never be taken away, although they can sometimes be restricted – for example if a person breaks the law, or in the interests of national security. These basic rights are based on values like dignity, fairness, equality, respect and independence.

So, if one has the right to be independent yet a governement has the right to uphold their laws by restricting that right, even to the point of using unecessary force, who is left with the most freedom?

It is no wonder why we see in so many circumstances that in order to gain true independence you have to fight for it.

The Hutch Report

The Pension Fund Crisis – It is beginning to boil!

By | Economics, Money, Politics

Reading the news is tough. Most of it is bad, yet we tend to want more of it. For some reason humans are more drawn towards bad news than good news. There is a school of thought in psychology that says we do more to avoid pain than we do to gain pleasure. Could this be the reason why we need to know about all the bad stuff?  Is it merely a defense mechanism to protect ourselves?

At the same time we can ask ourselves if we have become so desensitised by bad news that it doesn’t impact us emotionally anymore. If true, it puts us in a perilous position. This psychological state prevents us from reacting to danger and you can bet that every once in a while a situation does arise that we should be paying attention to. Something that could provoke us to jump into action and protect ourselves, instead of sitting in a pot of boiling hot water like a frog, not realising what is happening, until it is too late. With that, I present you with the following pot of boiling hot water:

Public pensions: America’s Greece? (The Economist, Dec 17th 2014)

States face shaky financial futures; pensions at risk (USA Today, July 6, 2015)

The U.S. is facing a $1 trillion pension shortfall (CNN Money, July 14, 2015)

Connecticut, America’s Richest State, Has a Huge Pension Problem (WSJ, Oct. 5, 2015)

The US government has a $20.4 trillion retirement problem (Business Insider, Apr. 6, 2016)

One of the nation’s largest pension funds could soon cut benefits for retirees (The Washington Post, April 20, 2016)

The US public pensions crisis ‘is really hard to fix’ (FT, May 1, 2016)

Kentucky, home to the worst-funded pension plan in the US (FT, June 10, 2016)

Are State And Local Government Pensions Underfunded By $5 Trillion? (Forbes, JUL 1, 2016)

California’s Pension Funding Crisis Just Got Worse (Forbes, Jul 19, 2016)

Covering Up the Pension Crisis (Wall Street Journal, Aug. 25, 2016)

States Face a $1 Trillion Pension Problem: Here Are the Worst 10 (The Fiscal Times, Aug. 29, 2016)

The pension gap (LA Times, SEPT. 18, 2016)

Pension Funds Face Day of Reckoning as Investment Returns Lag (News Max, 21 Sep 2016)

Will Looming State And Local Government Pension Crisis Bankrupt The U.S.? (Investor’s Business Daily, 10/14/2016)

US state public pension unfunded liabilities to hit $1.75 trillion: Moody’s (CNBC, 7 Oct 2016)

Pension crisis: 50% of States can’t cover their annual pension costs (Value Walk, October 10, 2016)

Pension crisis: Fully funded ones a rarity (Fox News, October 25, 2016)

New Jersey Tops Illinois as State With Worst-Off Pension System (Bloomberg, November 2, 2016)

The State Level Pension Crisis: Pennsylvania (The American Spectator, November 10, 2016)

Era of Low Interest Rates Hammers Millions of Pensions Around World (Wall Street Journal, Nov. 13, 2016)

US Pension Crisis: This is How Families Get Squeezed to Bail Out Pension Funds in Chicago (Wolf Street Nov 17, 2016)

South Carolina’s looming pension crisis (The Post and Courrier, Dec 3, 2016)

A Dallas public pension fund suffers a run (The Economist, Dec 8th 2016)

The Looming Debt Crisis: A State & Local Perspective (Joint Economic Committee, Dec 08 2016)

American Pension Crisis: How We Got Here (Forbes, DEC 9, 2016 @ 08:41 AM)

It is starting to get damned hot in here so now is your chance to jump out or risk becoming a side dish with butter, garlic and parsley poured all over you, AND no retirement savings to show for it.