So now we have a breach of our identities, one that we were powerless to prevent. That?s 143 million of us, including ? as recently confirmed ? yours truly. 143 million identities are now floating around unaccounted for somewhere in cyberspace. All because we were involuntarily enrolled in the systematic surrender of our identities. This is what happens when a society becomes ridiculously complicated. We had no choice in the matter; we?re simply part of this all-encompassing, all-powerful System, that increasingly controls us without so much as our consent.
The magnitude of this breach has yet to be fully appreciated, if it can even be understood. The System-supporting optimists will tell us that we have nothing to fear. All we have to do is put a freeze on our credit ? with all three of the mysterious credit bureaus. Tried that, didn?t work. All three sites are overloaded with millions of people trying to freeze their credit.
So here?s the deal ? once again ? The System makes a ?mistake?, but each of us will be called upon to fix it individually. What?s more, The System doesn?t and can?t assure us that this won?t happen again. Or what we can do to protect ourselves. It?s simply dismissed as part of the inevitable cost of maintaining the All-Good and All-Powerful System.
Welcome to the Land of Oz
Do you ever get the feeling, here are the 21st Century, that we?re stuck in an eternal repeat of the Wizard of Oz? We do our best to live within the parameters of a complex system that?s dictated by a frightening looking display of smoke and mirrors in a big room, controlled by a little old guy standing behind a curtain.
Are the smoke and mirrors really that frightening? Is the little guy behind the curtain really that smart? We?re all too scared to ask such questions publicly. And maybe more than a little afraid to find out the truth.
But this complexity crisis is very real, and it permeates every corner of our society.
Why things are so Ridiculously Complicated
Years ago, I worked for a mortgage company that had a new and highly dysfunctional computer system. Every attempt to use the system caused repeated delays. And since everything was run through the system, everything was delayed. The system?s official name was MAL, but we all referred to it as ?Malfunction?.
Now this was a large, multi-state bank, that was running millions of transactions per year. How could they possibly tolerate having such a counterproductive computer system?
I asked a member of the IT staff. She told me that the IT department was aware of the shortcomings of the system, and that they were not fixable. But she said that the system would be retained because the bank had spent millions of dollars implementing it. Translation: we were stuck having to make do with a system that was worse than inadequate.
But what really struck me was the reason why the system was so dysfunctional. According to the IT person, the bank was attempting to run too many functions through a single system. She said that some of those functions were fundamentally incompatible. That?s what was causing the freezes and timeouts. The single system simply could not accommodate all that it was asked to do.
That helps to explain why everything today is so ridiculously complicated. Every system, every department, every person is being called upon to accommodate multiple incompatible functions. The outcome is completely predictable: needless complication and system failure.
Equifax must, on one hand, amass deeply personal information on tens of millions of people, disseminate it to millions of system users, and do so without allowing the information to fall into the wrong hands.
That?s too much to ask of any system, no matter how efficient it may be. That describes how virtually every system in our society now works.
The Complexity ?Moat?
We often hear the term sheeple, which is a hybrid of the words ?sheep? and ?people?. It describes how people willingly go along, despite the fact that cooperation is not in their best interest. They?ll allow themselves to be led to the slaughter.
When enough components of a society become sufficiently complex, people eventually give up trying to understand what?s going on. They start to assume that it?s all ?beyond them?. This is how people become sheeple. Everyday activities become beyond comprehension. They simply assume that they lack intelligence or ability, and go along with what leaders and experts tell them to do.
In this way, complexity becomes a moat. We all know how the kings and nobles in Days of Old built moats around their castles to protect them from intruders and invaders. Complication provides a nonphysical moat, that?s every bit as effective as the ones that used to have water and alligators in them.
As best I can tell, use of the word moat in this regard comes from Charles Hugh Smith, who might have first used the term in this capacity in his article Complexity and Collapse. He has since used the term frequently, such as regulatory moat and complexity moat. They are excellent terms used to describe situations that are very real, even if unnoticed.
In the 21st century, it?s common to assume that ridiculously complicated functions and systems are as immutable as air and water. Complexity becomes a moat when no one questions why it?s necessary.
Complication is at the Root of Credit Reporting
The credit bureaus are the perfect example of complication. Many thousands of creditors channel personal information into the bureaus. The information includes:
- Your name, and different variations of it that have been used
- Current and previous addresses, or for that matter any addresses that you have been associated with
- Your Social Security number
- Credit status, credit history and loan account numbers
- Legal records (bankruptcies, foreclosures, judgments, etc.)
- Often your driver?s license number
There?s probably more, but we as the Great Unwashed are not considered worthy of disclosure.
Not only is the information provided by lenders, but it?s also fully accessible by them. They can get it in a matter of seconds.
While this may be very convenient for the lenders, it?s also very advantageous for those that have less than honorable intentions. The fact is, there are hundreds of bits of information about each of us that are floating around in these credit bureaus. That information passes through hundreds of hands each year. There are the people at the credit bureaus, the lenders, and any third parties with whom the information might be shared, legally or otherwise.
That creates a giant, uncontrollable system. There?s too much information contained in the databases to protect it, and too many people have access to it. It?s like a genie that can?t be kept in a bottle.
The only surprise about the Equifax breach is that it hasn?t happened sooner. Or maybe it has, and it was either unreported, under-reported or sugarcoated (that?s the methodology that The System uses these days to assure us that we have nothing to fear but fear itself).
And while all of this happens, you and I have no control over the information assembled about us, let alone who has access to it. Forget about federal laws ? they?re just a smokescreen to make us think that we?re protected, and that we have rights. We don?t.
Complication is Everywhere
The credit bureaus are just one example of how complexity rules the day. But it exists in virtually every corner of our society. Here are some common examples:
Healthcare. Have you read a health insurance policy? Have you ever tried to interpret a hospital bill? I?ll bet you can?t do it. That doesn?t mean you?re an idiot. It just means that health insurance policies and hospital bills are not intended to be understood. What makes it even worse is that we?re never told in advance what the procedure will cost. Apparently we don?t deserve to know. It’s that Great Unwashed thing again.
As a side note, I applied for coverage on the healthcare exchange a couple of years ago. One of the major reasons why we didn?t take the coverage was because the application process was so complicated that I couldn?t get a remote handle on how it would work. But that?s what happens when government designs a program that?s intended to be all things to all people, while still protecting the profits of the people at the top.
The Tax Code. What was once a fairly simple process, now requires complicated computer software to navigate. I won?t spend any time on this one, we all know it to be true.
Derivatives. This is a perfect example of how investing has become dangerously complex and bloated. Warren Buffett has referred to derivatives as financial weapons of mass destruction. Derivatives are paper ?assets? that are based on an underlying asset, like stocks, bonds and commodities, but are not an asset in and of themselves. They?re just more paper promises. You can have $1 billion in paper trading on $10 million worth of the underlying asset, which means you have $990 million of essentially smoke that traders assume to be real.
Various estimates of the amount of derivatives in the world range from tens of trillions to hundreds of trillions of dollars, which is many times larger than the combined economies of all the countries in the world. The very fact that no one can put a dollar amount of the total value of these investments is another example of complexity in motion.
Employment. There was a time, maybe only 20 or so years ago, when you could land just about any job you were qualified to hold. But no more. A major reason is that the job application process has become infinitely more complicated.
Employers are no longer looking for the best applicants. They?re now sifting through your credit report, your criminal background, your motor vehicle records, and even your social media commentary. It?s mostly an attempt to disqualify you. You may be perfectly good at the job that they need filled. But if you have any blemishes in your past, your application won?t even be acknowledged.
The point is, nothing is as simple as it once was. We?re told that this is just the way it is, and there is no other way.
The Coming Complexity Meltdown ? Why This Won?t End Well
Complexity is an indication of a society that?s in the throes of a meltdown. Like that bank that I worked for years ago, complexity hides more fundamental problems. Those problems are not easily overcome, and that?s what creates the need for complexity.
In an attempt to become all things to all people, subsystems and the overarching System itself are becoming unmanageable. This is how a credit bureau giant like Equifax somehow leaks the identities of 143 million people. It simply can?t be stopped.
We?ll continue to tool along dealing with this complexity as best we can. And ironically, it?s our very cooperation that keeps it going. But at some point, the system will begin to hemorrhage. This will be magnified by the fact that the various subsystems ? credit reporting, lending, and financialization ? will go down the drain at roughly the same time. It happened during the meltdown in 2008 ? 2009. I suspect that was just an appetizer before the main course arrives.
Only once we begin to realize, as individuals, that the system cannot be collectively trusted, will we begin to reclaim our own independence and integrity. I have no idea when that will be, but have a strong sense that it?s coming. There?s too much complexity and too many interlocking systems. When the first one falls, it?ll take the rest down with it.
It?s even possible that the Equifax breach is the first domino. This has the potential to disrupt the perceived integrity of the credit reporting industry. That has implications that we can?t even estimate right now.
Minimizing the Effects of Complexity in Your Life
Life today is virtually controlled by a host of systems, under the umbrella of the master system – loosely, The System. At the moment, all things in our society are controlled by that structure. It?s becoming increasingly clear that humanity is no longer in complete control of that construct.
There?s no way to escape the grip of The System and its complexities, short of going ?off the grid? completely. I have no intention of doing that, nor would I ever advocate anyone else doing it. There?s simply too much to give up to justify making that kind of a move.
I also don?t think it?s necessary. It?s often said that all things revert to the mean. Some level of complexity is inherent to human existence. But since we live in a world dominated by systems, complication has become systemic. Although that trend has been marching forward for decades, it?s due for a sharp reversal. After all, whatever the perceived benefits of complexity might be, it is, like everything else, subject to diminishing returns.
I believe we?re already at that point. But I also believe that most systems, no matter how decrepit and dysfunctional, last a lot longer than any of us believe they can. What can we do to minimize systemic complexity in the moment?
The best strategy is to minimize involvement with the System(s)
That means minimizing or eliminating credit usage. That won?t completely remove us from credit databases, but it will minimize how much and how often our information is being shared. Paying small expenses in cash eliminates the paper trail. You can set a cash threshold of $50 or even $100, before breaking out the plastic.
Self-employment is another possible option. That will not only avoid going up against the wall of security checks to get a job, but will also eliminate turning your information (and your life) over to an employer. In most self-employed arrangements, you?re not called upon to provide personal information as a routine matter. Nor are you subject to close supervisory control.
Stepping out of the employment world will also largely eliminate the complexity that?s become a regular part of most jobs, even the simplest. One of the factors that led me to become a freelance blog writer was the ability to simplify my life. And that has certainly been the case.
Keep your investment activities simple. Don?t invest in something just because some schmexpert recommended it. If you don?t understand what it is and what it does, you?ve got no business betting money on it. Always remember that The System is self-reinforcing. It can and does make deception look like the truth.
I also think it?s important to travel light in life. That means living a life without so much stuff. Everything you own increases the complexity of your life, as well as your exposure to the systems that are behind that possession. For example, owning two houses will be twice as complicated as owning one.
Complexity has become the new normal. But it comes at a price. We caught a glimpse of that price with the Equifax breach, but I think there?s more to come. We?ll be well advised to reduce as many points of complexity in our lives as possible. That won?t make the problem go away, but it will minimize the frequency of meltdowns, and possibly even the severity when they do hit.
Safety and security are myths. They?re now compromised by the very systems that we believe are protecting us.
What are your thoughts about the Equifax breach, and do you think that it points to other systems that have become so complicated as to be unmanageable?