The Normalization and Institutionalization of Fraud

This post was originally published on this siteNormalizing and institutionalizing fraud undermines the foundations of the economy and the financial system. I am indebted to Manoj Samanta (twitter: @flation_debate) for the insightful concept the commoditization of fraud. The first step in the commoditization of fraud is to normalize fraud as Business as Usual (BAU) to the point that it’s no longer … Read moreThe Normalization and Institutionalization of Fraud

Downward Mobility Matters More Than Liberal-Conservative Labels

This post was originally published on this siteThe real heresy here is the American economy is now rigged for downward mobility. In the conventional narrative, one’s economic class is overshadowed by one’s political belief structure: liberal, conservative, libertarian, etc. In terms of economic class, the conventional narrative divides people into their ideological beliefs about economic ideologies: … Read moreDownward Mobility Matters More Than Liberal-Conservative Labels

The Economy Has Fundamentally Changed in the 21st Century–and Not for the Better

This post was originally published on this siteThe net result is we have an economy that’s supposedly expanding smartly while our well-being and financial security are collapsing. Gross Domestic Product (GDP) and other metrics of economic activity don’t measure either broad-based prosperity or well-being. Elites skimming financialization profits by expanding corporate debt and issuing more loans … Read moreThe Economy Has Fundamentally Changed in the 21st Century–and Not for the Better

Is China’s Belt & Road a Decade Too Late?

This post was originally published on this siteThe world appears to be tiring of globalization and hegemons, and that trend may doom the Belt & Road to irrelevancy. The conventional narrative holds that China’s Belt & Road Initiative is cementing China’s global superpower status. There’s an alternative narrative, however: it’s a decade too late. From this … Read moreIs China’s Belt & Road a Decade Too Late?

Unrealistically Great Expectations

This post was originally published on this siteOur expectations have continued ever higher even as the pie is shrinking.. Let’s see if we can tie together four social dynamics: the elite college admissions scandal, the decline in social mobility, the rising sense of entitlement and the unrealistically ‘great expectations’ of many Americans. As many have noted, … Read moreUnrealistically Great Expectations

The Great Unraveling Begins: Distraction, Lies, Infighting, Betrayal

This post was originally published on this siteThe good news is renewal becomes possible when the entire rotten status quo collapses in a putrid heap. There are two basic pathways to systemic collapse: external shocks or internal decay. The two are not mutually exclusive, of course; it can be argued that the most common path is … Read moreThe Great Unraveling Begins: Distraction, Lies, Infighting, Betrayal

What Would It Take to Spark a Rural/Small-Town Revival?

This post was originally published on this siteThere are many historical models in which the spending/investing of wealthy families drives the expansion of local economies. The increase in farm debt while farm income declines is putting unbearable financial pressure on American farmers, who must be differentiated from giant agri-business corporations. This is placing immense pressure on … Read moreWhat Would It Take to Spark a Rural/Small-Town Revival?

Good Riddance to a "Nothing-Burger" Trade Deal

This post was originally published on this siteChina has expanded its domestic debt to fund its growth, much of which qualifies as malinvestment, creating financial vulnerabilities its government is anxious to mask. As I noted in Trade Deal Follies: The U.S. Has Embraced the World’s Worst Negotiating Tactics (April 8, 2019), the trade deal was a Nothing-Burger … Read moreGood Riddance to a "Nothing-Burger" Trade Deal

Income Inequality and the Decline of the Middle Class in Two Charts

This post was originally published on this siteNow look at the middle quintiles–the middle class: their income has gone nowhere in the past decade. These two charts of average incomes of U.S. households by quintile (bottom 20%, middle 60% (20%+20%+20%) and top 20%) have both good news and bad news. (Charts are from the non-partisan Congressional … Read moreIncome Inequality and the Decline of the Middle Class in Two Charts

The Accelerating Decay of the Middle Class

This post was originally published on this siteIronically, their ample compensation allows them to avoid the poor-quality services they’ve designed for everyone below them. If we define middle class by the security of household income and what that income can buy rather than by an income level, what do we conclude? We have little choice but to conclude the middle class is … Read moreThe Accelerating Decay of the Middle Class

‘Workarounds’ Galore: How Real Americans Deal with ‘Real’ Inflation

This post was originally published on this siteIt’s the list of workarounds – always growing, never shrinking – that’s telling us the true story of inflation in America. Today I’m publishing a guest post by writer Bill Rice, Jr., on “real inflation,”which as everyone knows far exceeds the “official” inflation rate of 2%. Bill and … Read more‘Workarounds’ Galore: How Real Americans Deal with ‘Real’ Inflation

The Erosion of Everyday Life

This post was originally published on this siteWorking hard and doing what you’re told is no longer yielding the promised American Dream of security, agency and liberty. Volume One of Fernand Braudel’s oft-recommended (by me) trilogy Civilization & Capitalism, 15th to 18th Century is titled The Structures of Everyday Life. The book describes how life slowly became better … Read moreThe Erosion of Everyday Life

There Are Two Little Problems with "Taxing the Rich" to Pay for "Free Everything"

This post was originally published on this siteNo super-wealthy individual or household is going to pay billions in additional taxes when $10 to $20 million will purchase political adjustments. The 2020 election cycle has begun, and a popular campaign promise is “free everything” paid for by new taxes on the super-wealthy. Who doesn’t like free stuff? Who … Read moreThere Are Two Little Problems with "Taxing the Rich" to Pay for "Free Everything"

Push Them Hard Enough and the Productive Class Will Opt Out of Servitude

This post was originally published on this sitePeople love their big paychecks, but they also value their sanity. One of the most astonishing manifestations of disconnected-from-reality hubris is public authorities’ sublime confidence that employers and entrepreneurs will continue starting and operating enterprises no matter how difficult and costly it becomes to keep the doors open, much … Read morePush Them Hard Enough and the Productive Class Will Opt Out of Servitude

The Feedback Loop of Doom: When Mobile Creatives and Capital Abandon Unaffordable, Dysfunctional Cities

This post was originally published on this siteWhen the 4% who generate the jobs and tax revenues have had enough and leave, the effects quickly impact the 64%. At the end of any trend, everyone’s a true believer: this trend is so enduring, so broad-based, so based on unchanging fundamentals that it will never ever reverse. … Read moreThe Feedback Loop of Doom: When Mobile Creatives and Capital Abandon Unaffordable, Dysfunctional Cities

If "Getting Ahead" Depends on Asset Bubbles, It’s Not "Getting Ahead," It’s Gambling

This post was originally published on this siteGiven that the economy is now totally and completely dependent on inflating asset bubbles, it makes no sense to invest for the long-term. Beneath the endlessly hyped expansion in gross domestic product (GDP) of the past two decades, the economy has changed dramatically. The American Dream boils down to social … Read moreIf "Getting Ahead" Depends on Asset Bubbles, It’s Not "Getting Ahead," It’s Gambling

America’s Forced Financial Flight: Fleeing Unaffordable and Dysfunctional Cities

This post was originally published on this siteThe forced flight from unaffordable and dysfunctional urban regions is as yet a trickle, but watch what happens when a recession causes widespread layoffs in high-wage sectors. For hundreds of years, rural poverty has driven people to urban areas: cities offer paying work and abundant opportunities to get ahead, … Read moreAmerica’s Forced Financial Flight: Fleeing Unaffordable and Dysfunctional Cities

How Empires Fall: Moral Decay

This post was originally published on this siteThere is a name for this institutionalized, commoditized fraud: moral decay. Moral decay is an interesting phenomenon: we spot it easily in our partisan-politics opponents and BAU (business as usual) government/private-sector dealings (are those $3,000 Pentagon hammers now $5,000 each or $10,000 each? It’s hard to keep current…), and we’re suitably … Read moreHow Empires Fall: Moral Decay

The Next Financial Crisis Won’t Be Caused by Fraud: This Time Will Be Different

This post was originally published on this siteExtreme levels of debt and overvaluation characterize the entire global economy, and are not limited to any one nation or sector. Financial crises come in two flavors: fraud and credit-valuation over-reach.Fraud-based financial crises may differ in particulars, but they share many traits: perverse incentives are institutionalized; the perverse … Read moreThe Next Financial Crisis Won’t Be Caused by Fraud: This Time Will Be Different

The World’s Hypocritical Silence as China Imprisons its Ethnic Muslims En Masse

This post was originally published on this siteThe entire world’s ruling elites are silent because they’re terrified that even mild murmurings might limit the blood-soaked billions they want to reap from trade with China. Imagine the reaction in the global Muslim community if a western nation imprisoned hundreds of thousands of Muslims solely for being … Read moreThe World’s Hypocritical Silence as China Imprisons its Ethnic Muslims En Masse

Notre Dame and the Identity of France

This post was originally published on this siteThese are not matters solely of politics and finance; they are manifestations of the elite war on the identity of France. As rationalists, we’re supposed to take the dramatic and profoundly tragic fire at Notre Dame Cathedral in Paris as random chance or bad luck. But I cannot be … Read moreNotre Dame and the Identity of France

No Fix for Recession: Without a Financial Crisis, There’s No Central Bank Policy Fix

This post was originally published on this siteThere are no extreme “fixes” to secular declines in sales, profits, employment, tax revenues and asset prices. The saying “never let a crisis go to waste” embodies several truths worth pondering as the stock market nears new highs. One truth is that extreme policies that would raise objections in … Read moreNo Fix for Recession: Without a Financial Crisis, There’s No Central Bank Policy Fix

Fitness without the Long, Grueling Workout

This post was originally published on this sitePondering what Nature selected as advantageous in our long existence as hunter-gatherers helps us understand why walking and occasional short bursts of intensive exercise together yield the vast majority of the benefits of exercise/fitness. What if there was a way to get rich by merely investing a modest … Read moreFitness without the Long, Grueling Workout