Asked about yesterday’s action against Dwolla Gallippi said much of the coverage was wrong and once you looked at the actual warrant it was clear it was a very specific problem of non-compliance – “the shell company was not licensed to do what it was doing.”

Further, MT Gox is probably the major problem for BTC right now. It’s crap and bloated beyond its capabilities. Anything – including USG creating a market opportunity – that can lead to more competent exchanges should surely be welcomed? They’re going to try to regulate, but that’s just part of constructing the system, isn’t it?

Interesting that “Joining Founders Fund is ‘Mad Max’ Keiser’s Heisenberg Capital – a London-based fund focussed on Bitcoin investments.” Keiser’s stated on RT awhile back that BTC needs an exchange with a ‘market-maker’ and that he was looking to get involved. There was a discussion on another post about the extent the left were embracing bitcoin – Keiser will generate a lot of interest from that direction. Interesting.

On the other hand, which enemies has it “destroyed with utmost efficiency and ruthlessness” since WWII? Not the North Koreans, not the Vietnamese communists, not the Sandinistas, not al-Qaeda, not the Taliban, not the Iranians, not the Latin American ‘Bolivarians’ … The Soviet Union dismantled itself. The Iraqi military was destroyed, but that was just a displacement target for the real enemy (energized Islamic radicalism), so I’m not sure whether it counts as much. USG’s ability to impose its will concretely, i.e. in a way that furthers practical national interests, seems to have declined in perfect concert with its ideological mesmerization of the world. US-hegemonic globalization operates like a machine ensuring the controlled collapse of Occidental power, transferring it automatically — and relatively smoothly — to more efficiently organized societies.

If we go Moldbug on the question, and treat the only ‘real’ enemies of USG as right-wing governments (Marcos, Pinochet, Rhodesia, the RSA …) then for sure, they’ve gone. This only deepens the puzzle, though, because it suggests that USG can only demolish tractable regimes — those disposed to be friendly — and thus weaken its effective influence with every ‘accomplishment’. The Moldbug analysis begins to look quite plausible: this isn’t foreign policy as it has ever been understood before, but rather domestic religious neurosis projected outwards onto the global stage. Systematically eliminating right-wing pro-American regimes isn’t “efficiency and ruthlessness” but extraverted self-flagellation.

That’s what the Cathedral means: there’s no resolution to anything. Winning is too cruel to be allowed […] settling problems isn’t in any agency’s bureaucratic interests — it’s bad for career prospects. […]
I really don’t see USG ‘dealing’ with anything — do you? What was the last thing it dealt with? Its competence decays every year.

Is this impression a result of USG’s truly diminished ability to fight and exercise control — or merely of the fact that it has no serious enemies left? It seems to me that USG’s most recent enemies have been destroyed with utmost efficiency and ruthlessness; it’s just that unlike those from some decades ago, they were so puny and feeble that it didn’t require any impressive exertion on USG’s part.

Now, your remarks about bureaucratic sclerosis are certainly true. However, a good comparison (as in so much else) would be the Brezhnevian Soviet Bloc. There was a horrible bureaucratic sclerosis and dysfunction in this system, and nothing ever got done in an efficient and pleasant way — but if you tried any serious opposition against the system, you would be crushed instantly and ruthlessly, as it happened collectively to the Czechs in 1968 and individually to countless dissidents throughout this period. A political system can keep an efficient immune system against internal destabilizing forces for a very long time, even after it becomes otherwise hopelessly dysfunctional and sclerotic.

The key difference is that the Brezhnevian system eventually capitulated to a superior external power, but USG has no such competition. And while it’s certainly getting more Brezhnevian as time goes by, I see no reason why any organized serious opposition against it in the foreseeable future can expect anything but a Prague Spring of its own.

Does USG really want to turn a bunch of law-abiding citizens into scoff-laws? To treat financial regulations like we treat speed limits?

I’m not sure that the BTC topic is separable from wider questions of government competence and Cathedral prospects. We’re agreed the BTC can’t, strictly speaking, die — i.e “go to zero and stay there”. That’s technically and economically impossible, or at least requires an exotic form of state intervention beyond any yet seriously discussed. The NSA could buy up all Bitcoin? But then, they’re still being mined. The algorithm is extraordinarily robust.

So whatever happens to USG going forward, Bitcoin will be out there, waiting, along with the drug mafias, terrorists, rogue states, and other scary things. Nothing gets resolved anymore. That’s what the Cathedral means: there’s no resolution to anything. Winning is too cruel to be allowed, and as Moldbug has explained, settling problems isn’t in any agency’s bureaucratic interests — it’s bad for career prospects. The incentives point to endless festering, which can easily be spun as humanitarian delicacy (or nuance), bringing more liberal applause, more jobs, more resources … So it all just builds up. That’s the context.

I really don’t see USG ‘dealing’ with anything — do you? What was the last thing it dealt with? Its competence decays every year. Scandals used to be something like ruthless conspiracies. Now people just ask: What the hell were they trying to do? It’s slapstick government, and it’s in no one’s real interests for it not to be. If “it hits hard” where are the defeated enemies? (I’m not seeing any.) The only people it really gets to push around are the domestic middle-class dupes who pay for its ineffective flailing. … OK, I’m rambling. Here’s the test: let’s try to agree on a list o five serious policy challenges (other than Bitcoin) that USG might conceivably resolve over some time span to be mutually agreed. I don’t think it will solve any, ever, although some might get solved for it by accident, and despite its ineptitude (e.g. energy independence). I think USG is done. Its problem solving days ended decades ago. If Bitcoin becomes a ‘problem’ it will fester too. Then, when the time for opportunistic infection comes around, it breaks out …