We can win this thing and create a healthy, harmonious world, and the work each of us does to help bring this about makes a real difference. The more I observe and learn about human behavior, the more convinced of this I become.
Let me explain.
Every positive change in human behavior is always preceded by an expansion of consciousness. This is true whether you’re talking about positive behavioral changes in an individual or in a collective.
By “expansion of consciousness” I mean an increase in awareness — someone or a group of someones becoming more aware of something than they previously were:
Someone gaining a new perspective on the forces within themselves which drive them to seek out dysfunctional relationships.
An addict becoming more conscious of the inner dynamics that compel them to use.
A victim of abuse realizing that abuse is happening, and that a better life is possible, and that they deserve it.
A community becoming aware that their clergy have been sexually abusing children.
The US civil rights movement making Americans more aware of the injustice and destructiveness of racism.
Increased literacy and a greater ability to distribute the written word giving society a greater hunger for freedom and democracy and less tolerance for overt tyranny.
Etc.
Conditions don’t get better until the forces which give rise to them are clearly seen and understood. This movement from the darkness of unconsciousness into the light of awareness can create the illusion that things are getting worse, because they turn up so much ugliness.
After the 1955 lynching of Emmett Till, his mother made the decision to hold an open-casket funeral to expose the world to the cruelty that black Americans were being subjected to by showing his mutilated body to the public. In that moment it looked like the world was being made more ugly, because an ugliness that had previously gone unseen by many people was being published in papers across the country. But it was later said that “The open-coffin funeral held by Mamie Till Bradley exposed the world to more than her son Emmett Till’s bloated, mutilated body. Her decision focused attention on not only American racism and the barbarism of lynching but also the limitations and vulnerabilities of American democracy.”
Similarly, the dawn of the internet has turned up a tremendous amount of ugliness and cruelty that had previously gone unseen and unknown to most people. This can lead to the mistaken impression that the internet itself is making people more cruel and ugly than they previously were, but it isn’t. It’s just turning up humanity’s longstanding inner demons that had previously functioned solely in the dark.
It looks ugly, it moves in a sloppy, clumsy, two-steps-forward-one-step-back shamble, but human consciousness is undeniably expanding. We’re getting so much better at sharing ideas and information with each other that we’ve arguably changed more as a species in the last thirty years than we did in the previous thirty centuries. We might outwardly look similar to the way we looked in our grandparents’ time, but billions of human brains connected to each other through the internet is something that is wildly unprecedented in the entire history of our species. Nothing like this has ever happened before.
So humanity is indisputably becoming more conscious, as awkward and sloppy as our situation looks right now. We’re becoming more and more aware of the problems our species faces, and our rulers are having to do more and more work to pull the wool over our eyes and keep us marching in a way that is convenient to them.
Police brutality. The abuses of Israeli apartheid. The agony of poverty. The ravages of ecocide. The ways we’ve been deceived and manipulated by the mass media. People are becoming more and more aware of these things than they used to be, because the truth about them is suddenly vastly more visible now than it previously was.
And what’s exciting is that we all have the ability to participate in, and facilitate, this expansion of consciousness. We each have the ability to help humanity become more conscious in our own small way, thereby bringing us that much closer to a positive shift in our collective behavior.
Anything you can do to help make humanity a little more aware of the abusive nature of the systems which drive the problems we now face makes a difference, even if it’s a difference as small as making one single person a little bit more aware of one specific aspect of the tyranny we’re being subjected to. It doesn’t make a huge difference, but it does make a difference. And as long as it makes the slightest bit of difference, it is worth doing, because a lot of slight differences adds up to a massive difference. And there are a whole lot of people who have the ability to do this.
What this means is that we each have the ability to directly and meaningfully participate in the creation of a healthy world, because we are each able to directly and meaningfully advance the only factor that ever leads to positive changes in human behavior. We can do this through the new technologies which have expanded humanity’s ability to share ideas and information like videos, blogs, podcasts, tweets and memes, and we can do this through older means like holding demonstrations, creating art, distributing literature, writing messages on walls, and just having conversations.
Anything you can do to help people become more aware of injustice, abuses, propaganda and tyranny, whether in your own community or in the world, makes a difference. Does this mean you will single-handedly save the day like the protagonist in a Hollywood movie? No. That’s not how real change happens, and it never has been. Real change is the result of sustained efforts of many, many people whose individual actions could never achieve much on their own.
I think the protagonist-driven storytelling models humanity uses in its legends, folk tales, novels and films often plays an unwholesome role in distorting people’s expectations about the efficaciousness of their own individual actions. Those storytelling models are designed to appeal to the human ego, which gets a tremendous amount of energy and attention in this particular slice of spacetime, but they are not accurate representations of the way real change actually happens in real life. In real life, change happens because a great many people put their shoulders up against the change that was needed and shoved in the required direction.
So that’s what we can all do: we can all lean our shoulders into the expansion of human consciousness and shove. Spread awareness of what’s going on in the world, make people more aware that we’re all being deceived and manipulated at mass scale, and help people to see that a better world is possible. The more people open their eyes to what’s happening, the more shoulders there are to help join in our collective shove toward consciousness.
Ultimately what we’re looking at is humanity’s journey toward becoming a conscious species. One that’s no longer driven by unconscious animal impulses and the flailings of illusory egoic constructs in our psyches, and is instead driven by a lucid perception of reality and a desire for the greater good of all beings.
We can all play a role in this achievement, both by expanding our own consciousness as far as it can go by bringing clarity to our own minds, our own worldviews and our own inner processes, and by helping others to become more aware of the world around them. It won’t often unfold in a way that is elegant and linear and egoically pleasing, but it will unfold. And if it unfolds enough, positive change becomes inevitable.
By this terminal stage, the competent have been driven out, quit or burned out.
What happens with the competent retire, burn out or opt out? It’s a question few bother to ask because the base assumption is that there is an essentially limitless pool of competent people who can be tapped or trained to replace those who retire, burn out or opt out, i.e. quit in favor of a lifestyle that doesn’t require much in the way of income or stress.
These assumptions are no longer valid. A great many essential services that are tightly bound to other essential services are cracking as the competent decide (or realize) they’re done with the rat-race.
The drivers of the Competent Opting Out are obvious yet difficult to quantify. Those retiring, burning out and opting out will deny they’re leaving for these reasons because it’s not politic to be so honest and direct. They will offer time-honored dodges such as “pursue other opportunities” or “family obligations.”
1. The steady increase in workloads, paperwork, compliance and make-work (i.e. work that has nothing to do with the institution’s actual purpose and mission) that lead to burnout. There is only so much we can accomplish, and if we’re burdened with ever-increasing demands for paperwork, compliance, useless meetings, training sessions, etc., then we no longer have the time or energy to perform our productive work.
I wrote a short book on my experience of Burnout. I believe it is increasingly common in jobs that demand responsibility and accountability yet don’t provide the tools and time to fulfill these demands. Once you’ve burned out, you cannot continue. That option no longer exists.
For others, the meager rewards simply aren’t worth the sacrifices required. The theme song playing in the background is the Johnny Paycheck classic Take this job and shove it.
Healthcare workloads, paperwork and compliance are one example of many. Failure to complete all the make-work can have dire consequences, so it becomes necessary to do less “real work” in order to complete all the work that has little or nothing to do with actual patient care. Alternatively, the workload expands to the point that it breaks the competent and they leave.
2. Loss of autonomy, control, belonging, rewards, accomplishment and fairness. Professor Christina Malasch pioneered research on the causes of burnout, which can be summarized as any work environment that reduces autonomy, control, belonging, rewards, accomplishment and fairness. Despite a near-infinite avalanche of corporate happy-talk (“we’re all family,”–oh, barf) this describes a great many work environments in the US: in a word, depersonalized. Everyone is a replaceable cog in a great impersonal machine optimized to maximize profits for shareholders.
3. The politicization of the work environment. Let’s begin by distinguishing between policies enforcing equal opportunity, pay, standards and accountability, policies required to fulfill the legal promises embedded in the nation’s social contract, and politicization, which demands allegiance and declarations of loyalty to political ideologies that have nothing to do with the work being done or the standards of accountability necessary to the operation of the complex institution or enterprise.
The problem with politicization is that it is 1) intrinsically inauthentic and 2) it substitutes the ideologically pure for the competent. Rigid, top-down hierarchies (including not just Communist regimes but corporations and institutions) demand expressions of fealty (the equivalent of loyalty oaths) and compliance to ideological demands (check the right boxes of party indoctrination, “self-criticism,” “struggle sessions,” etc.).
The correct verbiage and ideological enthusiasm become the basis of advancement rather than accountability to standards of competence. The competent are thus replaced with the politically savvy. Since competence is no longer being selected for, it’s replaced by what is being selected for, political compliance.
It doesn’t matter what flavor of ideological purity holds sway–conservative, progressive, communist or religious–all fatally erode competence by selecting for ideological compliance. Everyone knows the enthusiasm is inauthentic and only for show, but artifice and inauthenticity are perfectly adequate for the politicization taskmasters.
4. The competent must cover for the incompetent. As the competent tire of the artifice and make-work and quit, the remaining competent must work harder to keep everything glued together. Their commitment to high standards and accountability are their undoing, as the slack-masters and incompetent either don’t care (“I’m just here to qualify for my pension”) or they’ve mastered the processes of masking their incompetence, often by blaming the competent or the innocent for their own failings.
This additional workload crushes the remaining competent who then burn out and quit, go on disability or opt out, changing their lifestyle to get by on far less income, work, responsibility and far less exposure to the toxic work environments created by depersonalization, politicization and the elevation of the incompetent.
5. As the competent leadership leaves, the incompetent takes the reins, blind to their own incompetence. It all looked so easy when the competent were at the helm, but reality is a cruel taskmaster, and all the excuses that worked as an underling wear thin once the incompetent are in leadership roles.
By this terminal stage, the competent have been driven out, quit or burned out. There’s only slack-masters and incompetent left, and the toxic work environment has been institutionalized, so no competent individual will even bother applying, much less take a job doomed to burnout and failure.
This is why systems are breaking down before our eyes and why the breakdowns will spread with alarming rapidity due the tightly bound structure of complex systems.
Small farmers produce up to 80% of the food in the non-industrialised countries. However, they are currently squeezed onto less than a quarter of the world’s farmland. The period 1974-2014 saw 140 million hectares – more than all the farmland in China – being taken over for soybean, oil palm, rapeseed and sugar cane plantations.
GRAIN noted that the concentration of fertile agricultural land in fewer and fewer hands is directly related to the increasing number of people going hungry every day. While industrial farms have enormous power, influence and resources, GRAIN’s data showed that small farms almost everywhere outperform big farms in terms of productivity.
In the same year, policy think tank the Oakland Institute released a report stating that the first years of the 21 century will be remembered for a global land rush of nearly unprecedented scale. An estimated 500 million acres, an area eight times the size of Britain, were reported bought or leased across the developing world between 2000 and 2011, often at the expense of local food security and land rights.
Institutional investors, including hedge funds, private equity, pension funds and university endowments, were eager to capitalise on global farmland as a new and highly desirable asset class.
This trend was not confined to buying up agricultural land in low-income countries. Oakland Institute’s Anuradha Mittal argued that there was a new rush for US farmland. One industry leader estimated that $10 billion in institutional capital was looking for access to this land in the US.
Although investors believed that there is roughly $1.8 trillion worth of farmland across the US, of this between $300 billion and $500 billion (2014 figures) is considered to be of “institutional quality” – a combination of factors relating to size, water access, soil quality and location that determine the investment appeal of a property.
In 2014, Mittal said that if action is not taken, then a perfect storm of global and national trends could converge to permanently shift farm ownership from family businesses to institutional investors and other consolidated corporate operations.
WHY THIS MATTERS
Peasant/smallholder agriculture prioritises food production for local and national markets as well as for farmers’ own families, whereas corporations take over fertile land and prioritise commodities or export crops for profit and markets far away that tend to cater for the needs of more affluent sections of the global population.
In 2013, a UN report stated that farming in rich and poor nations alike should shift from monocultures towards greater varieties of crops, reduced use of fertilisers and other inputs, increased support for small-scale farmers and more locally focused production and consumption of food. The report stated that monoculture and industrial farming methods were not providing sufficient affordable food where it is needed.
In September 2020, however, GRAIN showed an acceleration of the trend that it had warned of six years earlier: institutional investments via private equity funds being used to lease or buy up farms on the cheap and aggregate them into industrial-scale concerns. One of the firms spearheading this is the investment asset management firm BlackRock, which exists to put its funds to work to make money for its clients.
BlackRock holds shares in a number of the world’s largest food companies, including Nestlé, Coca-Cola, PepsiCo, Walmart, Danone and Kraft Heinz and also has significant shares in most of the top publicly traded food and agriculture firms: those which focus on providing inputs (seeds, chemicals, fertilisers) and farm equipment as well as agricultural trading companies, such as Deere, Bunge, ADM and Tyson (based on BlackRock’s own data from 2018).
Together, the world’s top five asset managers – BlackRock, Vanguard, State Street, Fidelity and Capital Group – own around 10–30% of the shares of the top firms in the agrifood sector.
The article Who is Driving the Destructive Industrial Agriculture Model? (2022) by Frederic Mousseau of the Oakland Institute showed that BlackRock and Vanguard are by far the biggest shareholders in eight of the largest pesticides and fertiliser companies: Yara, CF Industries Holdings K+S Aktiengesellschaft, Nutrien, The Mosaic Company, Corteva and Bayer.
These companies’ profits were projected to double, from US$19 billion in 2021 to $38 billion in 2022, and will continue to grow as long as the industrial agriculture production model on which they rely keeps expanding. Other major shareholders include investment firms, banks and pension funds from Europe and North America.
Through their capital injections, BlackRock et al fuel and make huge profits from a globalised food system that has been responsible for eradicating indigenous systems of production, expropriating seeds, land and knowledge, impoverishing, displacing or proletarianizing farmers and destroying rural communities and cultures. This has resulted in poor-quality food and illness, human rights abuses and ecological destruction.
SYSTEMIC COMPULSION
Post-1945, the Rockefeller Chase Manhattan bank with the World Bank helped roll out what has become the prevailing modern-day agrifood system under the guise of a supposedly ‘miraculous’ corporate-controlled, chemical-intensive Green Revolution (its much-heralded but seldom challenged ‘miracles’ of increased food production are nothing of the sort; for instance, see the What the Green Revolution Did for India and New Histories of the Green Revolution).
Ever since, the IMF, the World Bank and the WTO have helped consolidate an export-oriented industrial agriculture based on Green Revolution thinking and practices. A model that uses loan conditionalities to compel nations to ‘structurally adjust’ their economies and sacrifice food self-sufficiency.
Countries are placed on commodity crop production treadmills to earn foreign currency (US dollars) to buy oil and food on the global market (benefitting global commodity traders like Cargill, which helped write the WTO trade regime – the Agreement on Agriculture), entrenching the need to increase cash crop cultivation for exports.
Today, investment financing is helping to drive and further embed this system of corporate dependency worldwide. BlackRock is ideally positioned to create the political and legislative framework to maintain this system and increase the returns from its investments in the agrifood sector.
The firm has around $10 trillion in assets under its management and has, according to William Engdahl, positioned itself to effectively control the US Federal Reserve, many Wall Street mega-banks and the Biden administration: a number of former top people at BlackRock are in key government positions, shaping economic policy.
So, it is no surprise that we are seeing an intensification of the lop-sided battle being waged against local markets, local communities and indigenous systems of production for the benefit of global private equity and big agribusiness.
For example, while ordinary Ukrainians are currently defending their land, financial institutions are supporting the consolidation of farmland by rich individuals and Western financial interests. It is similar in India (see the article The Kisans Are Right: Their Land Is at Stake) where a land market is being prepared and global investors are no doubt poised to swoop.
In both countries, debt and loan conditionalities on the back of economic crises are helping to push such policies through. For instance, there has been a 30+ year plan to restructure India’s economy and agriculture. This stems from the country’s 1991 foreign exchange crisis, which was used to impose IMF-World Bank debt-related ‘structural adjustment’ conditionalities. The Mumbai-based Research Unit for Political Economy locates agricultural ‘reforms’ within a broader process of Western imperialism’s increasing capture of the Indian economy.
Yet ‘imperialism’ is a dirty word never to be used in ‘polite’ circles. Such a notion is to be brushed aside as ideological by the corporations that benefit from it. Instead, what we constantly hear from these conglomerates is that countries are choosing to embrace their entry and proprietary inputs into the domestic market as well as ‘neoliberal reforms’ because these are essential if we are to feed a growing global population. The reality is that these firms and their investors are attempting to deliver a knockout blow to smallholder farmers and local enterprises in places like India.
But the claim that these corporations, their inputs and their model of agriculture is vital for ensuring global food security is a proven falsehood. However, in an age of censorship and doublespeak, truth has become the lie and the lie is truth. Dispossession is growth, dependency is market integration, population displacement is land mobility, serving the needs of agrifood corporations is modern agriculture and the availability of adulterated, toxic food as part of a monoculture diet is feeding the world.
And when a ‘pandemic’ was announced and those who appeared to be dying in greater numbers were the elderly and people with obesity, diabetes and cardio-vascular disease, few were willing to point the finger at the food system and its powerful corporations, practices and products that are responsible for the increasing prevalence of these conditions (see campaigner Rosemary Mason’s numerous papers documenting this on Academia.edu). Because this is the real public health crisis that has been building for decades.
But who cares? BlackRock, Vanguard and other institutional investors? Highly debatable because if we turn to the pharmaceuticals industry, we see similar patterns of ownership involving the same players.
A December 2020 paper on ownership of the major pharmaceuticals companies, by researchers Albert Banal-Estanol, Melissa Newham and Jo Seldeslachts, found the following (reported on the website of TRT World, a Turkish news media outlet):
Public companies are increasingly owned by a handful of large institutional investors, so we expected to see many ownership links between companies — what was more surprising was the magnitude of common ownership… We frequently find that more than 50 per cent of a company is owned by ‘common’ shareholders who also own stakes in rival pharma companies.”
The three largest shareholders of Pfizer, J&J and Merck are Vanguard, SSGA and BlackRock.
In 2019, the Centre for Research on Multinational Corporations reported that payouts to shareholders had increased by almost 400 per cent — from $30 billion in 2000 to $146 billion in 2018. Shareholders made $1.54 trillion in profits over that 18-year period.
So, for institutional investors, the link between poor food and bad health is good for profit. While investing in the food system rakes in enormous returns, you can perhaps double your gains if you invest in pharma too.
These findings predate the 2021 documentary Monopoly: An Overview of the Great Reset, which also shows that the stock of the world’s largest corporations are owned by the same institutional investors. ‘Competing’ brands, like Coke and Pepsi, are not really competitors, since their stock is owned by the same investment companies, investment funds, insurance companies and banks.
Smaller investors are owned by larger investors. Those are owned by even bigger investors. The visible top of this pyramid shows only Vanguard and Black Rock.
A 2017 Bloomberg report states that both these companies in the year 2028 together will have investments amounting to $20 trillion.
While individual corporations – like Pfizer and Monsanto/Bayer, for instance – should be (and at times have been) held to account for some of their many wrongdoings, their actions are symptomatic of a system that increasingly leads back to the boardrooms of the likes of BlackRock and Vanguard.
Today, capitalist power can be summed up with the names of the three biggest investment funds in the world: BlackRock, Vanguard and State Street Global Advisor. These giants, sitting at the centre of a huge galaxy of financial entities, manage a mass of value close to half the global GDP, and are major shareholders in around 90% of listed companies.”
These firms help shape and fuel the dynamics of the economic system and the globalised food regime, ably assisted by the World Bank, the IMF, the WTO and other supranational institutions. A system that leverages debt, uses coercion and employs militarism to secure continued expansion.
I’d like to pose a question I’ve been dancing around for the last couple of posts: Is the United States a failed society?
That may seem overly dramatic, but please hear me out.
Recently, it has once again come to the attention of the news media that Americans are an order of magnitude more likely to die at every age than citizens of other advanced, wealthy, industrialized nations.
This was most recently expounded by a Financial Times correspondent named John Burn-Murdoch. The article itself is paywalled, but this Twitter thread contains all the relevant information:
It makes for sobering reading. A lot of times the discussion just focuses on total life expectancy, that is, the number on the death certificate. That’s fallen too, but not as dramatically. But life expectancy differs at various ages. Yet, what the numbers invariably show is that, at every single age Americans are more likely to die than their counterparts in other wealthy industrialized nations.
For example, one in 25 five-year-olds in the United States will not live to see their fortieth birthday. That means a lot of parents are going to have to bury their children. But at every age, whether you’re twenty-five or fifty, your chances of dying are much higher in the United States than anywhere else. By age 29, the average American is four times more likely to die than a 29 year-old in another country. I’ve heard plenty of stories from people in their twenties and thirties talking about their high-school years like military veterans recounting their service during wartime (“fifteen in my class didn’t make it out.”). And those are just ordinary citizens!
In other words, growing up in the United States is extraordinarily deadly.
In fact, the social outcomes for the average American are worse than the most socially deprived areas of the United Kingdom like Blackpool—an area synonymous with industrial decline. At every single point along the income distribution, Americans are more likely to be hurt, injured, or killed than their peers in other wealthy, developed nations.
Furthermore, these trends are exclusively confined to the United States. Even Cuba, a relatively poor country under continuous sanctions by the United States since the nineteen-sixties, now has better health outcomes (e.g. life expectancy, infant mortality, chronic diseases). So, too, does China, which has overtaken the U.S. in a number of health metrics despite being the largest country in terms of total population.
The Atlantic’s Derek Thompson has called the United States “The Rich World’s Death Trap.” He interviews John Burn-Murdock here:
The bottom line is this: in many ways, your life chances are much, much lower in the United States than in any other wealthy, industrialized nation in the world. This is simply undeniable.
Which leads me to pose the question I asked above.
Peer Countries
Because this is such a fraught topic, it’s worthwhile to get some things out of the way. Certainly your life chances in the United States are better than many other parts of the world at the moment.
Some places are run by military dictatorships like North Korea or Myanmar. Some places are in outright civil war like Syria, Libya or Sudan. Some areas are in an active shooting war like Ukraine and Russia. Some countries have huge areas of absolute deprivation like sub-Saharan Africa, India, the Philippines or Afghanistan. Some countries have lost control over parts of their territory to drug gangs like Mexico, El Salvador, Peru and Ecuador. You’re certainly better off here than in many of those other countries.
So let’s just acknowledge that right off the bat. Of course, this raises questions about just how supposedly wonderful the current state of our world actually is, but that’s a topic for another time.
But I think it’s absolutely invalid to invoke those countries as a justification for the abysmal statistics listed above. Here’s why: the United States is at the absolute apex of the global economy, and has been since World War Two. We issue the world’s reserve currency. We have more billionaires than anywhere else. We are home to the largest and most powerful corporations in the world. No country in the world is more wealthy or powerful than the United States at the present moment.
This is the concept of peer nations. Those are the ones we should be judging ourselves against. You can use a number of indicators for this. The United States is a member of both the OECD and the G-7. In fact, it is the key member of these organizations. It is at peacetime. It is an electoral democracy. It has the world’s largest GDP. It is surrounded by the world’s two largest oceans and has benign neighbors to the north and the south. It has not had a war on its home soil since the 1860s.
Simply put, the United States has more resources at its disposal and more wherewithal to tackle social problems than anywhere else in the world.
So, unlike many other countries around the world, the United States has no excuse whatsoever for the sorry state of its citizenry, and comparing the United States to non-peer countries is no more than pathetic excuse-making in the face of damning evidence that the U.S. government simply chooses to ignore burgeoning social problems and leaves the majority of its citizens to fend for themselves.
What Else Is New?
Reading these facts, I’m wondering why any of this this is news to people. As far back as 2013 I noted the following:
Americans die younger and experience more injury and illness than people in other rich nations, despite spending almost twice as much per person on health care.
That was the startling conclusion of a major report released earlier this year by the U.S. National Research Council and the Institute of Medicine. It received widespread attention. The New York Times concluded: “It is now shockingly clear that poor health is a much broader and deeper problem than past studies have suggested.”
It received widespread attention all right, and then was promptly forgotten. But even earlier, in 2012, there was this report from The Lancet:
American teenagers have the highest rates of drug and alcohol abuse in the developed world. And they are far more likely to be killed by violence than peers in Europe. This lost generation, whose unemployment rate is 20 percent, leads the modern world in some of the most dangerous and irresponsible behaviors, according to a new study released by the Lancet medical journal.
In 2019, husband-and-wife economists Angus Deaton and Anne Case coined the term “deaths of despair,” and noted that these were exclusively confined to the United States. In 2020, they published a book chronicling their grim studies with that same title. It, too, received a brief burst of attention in the media and then promptly disappeared down the memory hole just like everything else.
So this is old news. As Burn-Murdock’s article notes, the divergence between the U.S. and its peers has been continuously growing since around 1990, and has been getting even more acute in recent years.
The above podcast touts how “rich” we are compared with other nations using metrics like dollar income. But what does a high salary even mean when you are less likely to survive than other places? What are you supposed to do with that money, anyway—fill your oversized house with crap? As the saying goes, “you can’t take it with you.” This also belies the insanely high cost of everything in America, especially housing, which leads to 70 percent of Americans feeling financially stressed according to CNBC, despite how “rich” we supposedly are. According to Brookings, 44 percent of Americans earn low wages in this allegedly “rich” country.
And, as economist Dean Baker has noted, people in many other countries choose to take their additional “income” as leisure time, which may be another reason why they are so much healthier than we are. Americans work longer hours than anyone else, and at unusual times. The United States has a lousy work culture, with much less vacation or family leave time than other countries. Americans also take less vacation, work longer days, and retire later. Citizens of other countries also don’t have to pay for as many things out of their own pocket—from transportation, to retirement, to health care—due to a misguided fear of “socialism,” making income comparisons misleading. What sense does it make to earn a lot of money if you are lonely and isolated and have no time off to enjoy it? And much of that extra income is dedicated to cushioning ourselves from the fallout of a society decaying around us and positional goods to compete with everyone else.
My question is this: if the United States is not a failed society, then by what criteria should we judge success? Are context-free income statistics, GDP, and the number of billionaires really the appropriate measure for a good society rather than the well-being of the average citizen? People like to tout America’s so-called “innovation,” but one area we don’t seem to be innovating very much in is keeping our citizens healthy and alive.
The symptoms versus the disease
The reasons given for the above statistics are the usual ones: gun violence, drug overdoses, suicides, car crashes, metabolic diseases, and lack of access to basic and preventative health care compared to other nations.
But I want to distinguish the symptoms from the disease.
In medicine, doctors are taught to separate the symptoms from the disease. If a patient is suffering from a fever, jaundice, and swelling, for example; the fever, jaundice, and swelling aren’t what is making them ill. Instead, these are all symptoms caused by the disease which the patient is afflicted with, and it is the doctor’s job to determine what the disease is from the symptoms and try to cure it.
If that is the case, then what is the disease we are suffering from in this instance? In my opinion, it is this: American society is fundamentally rotten to the core.
We have effectively restructured our entire society as a lottery. Under this system, you’re entitled to precisely nothing except what you can claw free from the impersonal market casino rigged in favor the House. American society been transformed into a brutal winner-take-all tournament in the name of “meritocracy,” and most Americans seem to be okay with that.
At every point on their hierarchy, from the highest perch to the lowest, everyone is desperately trying to maintain their current position, hyperattuned to status, fearful of falling into the abyss, clawing each other’s eyes out to hold onto their small piece of the pie in a crabs-in-a-bucket scenario. “There is no such thing as society” has been elevated from a political statement to a a central guiding tenet where it’s every man for himself and the devil take the hindmost.
While other nations at least try to look after the welfare of all of their citizens, in America if you are not rich, successful or an entrepreneur, then your life is worth nothing. If you aren’t good enough, or don’t measure up, then you deserve to suffer. We actively hate the poor and think they should die. We talk about them like animals. Average is over. The rich get richer. Winners take all.
Cutthroat capitalism is the order of the day. Your only task when you get up every morning is to get as much of the other guy’s money as possible into your own bank account by any means necessary for the next twenty-four hours and do it all over again the next day. There is no higher purpose. “Freedom” is defined as the ability for the rich to do whatever they like to the rest of us without consequence or sanction. It’s a world of predator and prey where you can either be one or the other—there is no other option.
Unlike in other countries, in the United States the government does not exist to help its citizens; rather, its primary role is to funnel money to a series of well-connected insiders feeding at various troughs. The rest of us are on our own. No one is on your side.
In every country, you need to educate your citizenry and keep them safe and healthy. That is the most basic task of any government, anywhere. In the United States, these tasks are delegated to predatory institutions designed to extract as much money as possible so that sticky-fingered middlemen can siphon off as vast amounts to feather their nests. A small sliver of executives in finance, education and health care get obscenely rich while the rest of the population struggles and is mired in debt, assuming they can even access those services at all. As a result, Americans pay wildly inflated prices for just about everything, from health care, to education, to energy, to entertainment and telecommunications. And the system cannot be changed because those insiders and middlemen fund the political campaigns and spend billions on highly effective propaganda. The rich people at the apex cynically strip-mine society for their benefit, while there are fewer paths than ever to a middle class lifestyle for the average person.
“Everything for myself and my immediate offspring; nothing for other people,” is the pervasive ethos: “I dont want pay for someone else’s (health care, education, fill-in-the blank).” But once that attitude becomes endemic, you no longer have anything even resembling a society anymore; you have only collection of individuals fending for themselves. As the title of a post from a few years back put it, “I don’t know how to explain to you that you should care about other people.”
It is a nation of sociopaths where fellow citizens are seen as either enemies or competitors. The simple warmth of human kindness has been abolished. Americans walk around in a constant state of fear and high alertness like the prey animals they have become. Or else they have the thousand-yard-stare grazing in the aisles at Walmart. I’ve mentioned before how many Americans seem to be crazed and deranged, or zonked out on drugs, and don’t know how to behave around other people or show basic decency. People seem more and more desperate. I personally have witnessed many more acts of erratic behavior and dangerous driving lately, and have heard similar stories from other people. American society seems to be under more pressure than ever before, and people are cracking up left and right. It feels like a lot of people—even the supposedly “successful” ones—have basically checked out and are simply going through the motions.
The United States is a plantation society to the core. At a basic, fundamental level, American society is not set up not to deliver a good quality of life to it citizens, but rather for a small segment of hard, hard men to get unfathomably rich beyond the dreams of avarice, with the rest of us no more than insects to be stepped on in pursuit of that goal. And if some people happen to enjoy good lives anyway under that system, well, it’s more of an unintentional side-effect than a deliberate outcome. Perhaps you’re one of those hard men (or women), or hope to be. Good for you, I guess.
So I think that’s the fundamental reason for all of the above. That’s the disease, and everything else is merely a symptom—our refusal to properly fund universal health care; our built environment designed exclusively around cars and lack of public transportation; our fat and sugar-laden diets; our overcrowded prisons; our opioid-addicted homeless; our frayed social safety nets; our violent, trigger-happy cops; our extortionate education costs; our predatory financial institutions; our refusal to build affordable housing; and our propensity to shoot one another. American society is rotten to the core.
For example, even though our weekly mass shootings make international headlines, they don’t really have that much of an impact on life expectancy when you compare them against the size of the world’s third most populous nation, despite troubling statistics like these:
Last year (2022), two people died from gun violence in the United States every hour. In 2023, there have been at least 160 mass shootings across the US so far this year. There are 120 guns for every 100 Americans. No other nation has more civilian guns than people. About 44% of US adults live in a household with a gun, and about one-third personally own one.
But that’s not the question we should be asking. The question we should be asking is this: what does this level of gun massacres and homicidal mania say about the nature of American society itself?
What does it say about American society that so many people have to turn to alcohol, opioids and other addictive drugs just to cope?
What does it say about America that it produces so many mentally-ill and broken people?
What does it say that Americans are so much fatter and sicker than people in other countries?
What does it say that we lock up more of our citizens than anywhere else in the world?
Americans are prickly and thin-skinned. They can’t bear any criticism of their nation, and will absolutely lose their minds at even the implication that they do not live in the best country on earth, despite mountains of evidence to the contrary (unless you are very wealthy). They will rationalize away all of the statistics listed above. Or else they will resort to immigrants as a way to shore up their fragile egos: “Everyone wants to move here!!!” Interestingly, according to the podcast above (-14:39), U.S. immigrants seem to live about as long as anyone else in the world. Perhaps it’s because immigrant communities tend to look after each other and manage to keep the toxic, every-man-for-himself individualism of mainstream American culture at arm’s length. Too bad for the rest of us, though.
In the end, the facts speak for themselves: By the standards that actually matter for the average individual, compared to peer nations, the United States is an objective failure.
Why is it like this? Some pessimists say that it’s been like this from day one and there’s nothing we can do about it. Perhaps they’re right. But the facts tell a different story. According to the data, it’s really only since 1990 that this yawning chasm in social outcomes has opened up in between the United States and the rest of the world. During the New Deal era, for instance, these gaps didn’t exist or actually favored Americans. The United States was able to accomplish big things like building the Hoover Dam and putting a man on the moon, and people didn’t hate and fear their own government. The U.S. was perceived very differently abroad.
Here’s what I think happened. Starting in the 1970s a small group of sociopathic men at the top of the hierarchy acquired the means and the tools to reshape the United States in their own image. They founded think-tanks. They funded economics departments and political campaigns. They bought up the media. They started television networks to promote their agenda. They packed the courts. They used the latest cutting-edge psychological research and techniques that had been developed in the service of advertising to remold the society like putty in their hands. Throughout the decade of the 1980s under Reagan, their plans ultimately came to fruition, and the transformation was compete by 1990 which is why the changes became apparent after then. Ever since, we’ve been living in the society that they have created. I’m skeptical that Americans were always inherently more sociopathic and antisocial than people everywhere else—I think to a large extent we’ve been made to be this way.
So we’re all living in the end result of that. And now that it has been accomplished, we see the ugly results everywhere around us, including increasing political radicalization and strife as the failure of this vision of society is becoming increasingly apparent but we seem to be incapable of envisioning an alternative or are too fearful of change. Instead, we seem to be doubling down. I fear it’s already too late to turn things around, and this is just the way American society will be forever now and things will just continue to get worse and worse for the vast majority of us. We will remain the (not so) rich world’s death trap, permanently.
I’ll conclude with this passage which I read years ago:
If I could paint the country in one broad stroke, I would say it’s a place where one concept of freedom – used to lobby for private interests and free markets – is at odds with another kind: the ability to lead a life you enjoy. Fewer and fewer seem privileged with this second kind. Not Trayvon Martin, who was a victim of a certain kind of racism which had, as its root, private property anxiety. Not the natural gas employee who has consigned himself to a life of doing something that he feels ought not to be done. Even I – who have managed to escape from time to time – always find, upon return, a cordial invitation to fall in line.
I do not claim any expertise in social contract theory, but in broad brush we can delineate two implicit contracts: one between the citizenry and the state (government) and another between citizens.
We can distinguish between the two by considering a rural county fair. Most of the labor to stage the fair is volunteered by the citizenry for the good of their community and fellow citizens; they are not coerced to do so by the government, nor does the government levy taxes to pay its employees or contractors to stage the fair.
The social contract between citizens implicitly binds people to obeying traffic laws as a public good all benefit from, not because a police officer is on every street corner enforcing the letter of the law.
The social contract between the citizens and the state binds the government to maintaining civil liberties, equal enforcement of the rule of law, defending the nation, and in the 20th century, providing social welfare for the disadvantaged, disabled and low-income elderly.
Critiques of “trickle down economics” focus on income inequality as a key metric of the Social Contract: rising income inequality is de facto evidence that the Social Contract is broken.
I think this misses the key distinction in the Social Contract between citizens and the state, which is the legitimacy of the process of wealth creation and the fairness of the playing field and the referees, i.e. that no one is above the law.
Few people begrudge legitimately earned wealth, for example, the top athlete, the pop star, the tech innovator, the canny entrepreneur, the best-selling author, etc. The source of these individual’s wealth is transparent, and any citizen can decline to support this wealth creation by not paying money to see the athlete, not buying the author’s books, not shopping at the entrepreneur’s stores, etc.
The Social Contract is broken not just by wealth inequality per se but by the illegitimate process of wealth acquisition, i.e. the state has tipped the scales in favor of the few behind closed doors and routinely ignores or bypasses the intent of the law even as the state claims to be following the narrower letter of the law.
By this definition, the Social Contract in America has been completely smashed. One sector after another is dominated by cartel-state partnerships that are forged and enforced in obscure legislation written by lobbyists. Once the laws have been riddled with loopholes and the regulators have been corrupted, “no one is above the law” has lost all meaning.
Those who violate the intent of the law while managing to conjure an apparent compliance with the letter of the law are shysters, scammers and thieves who exploit the intricate loopholes of the system, all the while parading their compliance as evidence the system is fair and just. In this way, the judicial system becomes part of the illegitimate process of wealth accumulation.
In America, political and financial Elites are above the intent of the law. Is bribery of politicos illegal? Supposedly it is, but in practice it is entirely and openly legal.
This is the norm in banana republics, whose ledgers are loaded with thousands of codes and regulations that are routinely ignored by those in power. In the Banana Republic of America, financial crimes go uninvestigated, unindicted and unpunished: banks and their management are essentially immune to prosecution because the crimes are complex (tsk, tsk, it’s really too much trouble to investigate) and they’re “too big to prosecute.”
The rot has seeped from the financial-political Aristocracy to the lower reaches of the social order. The fury of those still working legitimate jobs and paying their taxes is grounded in a simple, obvious truth: America is now dominated by scammers, cheaters, grifters and those gaming the system, large and small, to increase their share of the swag.
The honest taxpayer is a chump, a mark who foolishly ponies up the swag that’s looted by the smart operators. Everyone knows that the vast majority of wealth accumulation in America flows not from transparent effort on a level playing field, but from persuading the Central State (the Federal government and the Federal Reserve) to enforce cartels and grant monopolistic favors such as tax shelters designed for a handful of firms and unlimited credit to private banks.
When scammers large and small live better than those creating value in the real economy, the Social Contract has ceased to exist. When the illegitimate process of wealth acquisition–a rigged playing field, a bought-off referee, and an Elite that’s above the law by every practical measure–dominates the economy and the political structure, the Social Contract has been shattered, regardless of how much welfare largesse is distributed to buy the complicity of state dependents.
Once the chumps and marks realize there is no way they can ever escape their exploited banana-republic status as neofeudal debt-serfs, the scammers, cheats and grifters large and small will be at risk of losing their perquisites. The fantasy in America is that legitimate wealth creation is still possible despite the visible dominance of a corrupt, venal, self-absorbed, parasitic, predatory Aristocracy. Once that fantasy dies, so will the marks’ support of the Aristocracy.
As Voltaire observed, “No snowflake in an avalanche ever feels responsible”: every claim, every game of the system, every political favor purchased is “fair and legal,” of course. This is precisely how empires collapse.
In broad brush, we can trace the transition from feudalism to capitalism to the present financialized, globalized cartel-state neofeudalism and next, to a synthesis built on the opposite of neofeudalism, which is decentralization, transparency, accountability, legitimacy and the adaptive churn of competing ideas and proposals.
This is how we’ll end up with severe shortages of truly skilled labor and high unemployment of those who lack the necessary skills.
The labor force and the job market are referred to as if they were monolithic structures. But they’re not monolithic, they are complex aggregates of very different cohorts of age, skills, mobility, education, experience, opportunity, potential and motivation.
As a result, numbers such as the unemployment rate tell us very little about the labor force and the job market in terms of what matters going forward. So what does matter going forward?
1. Demographics–the aging and retirement of key sectors of the work force.
2. Skills and experience that will be increasingly scarce due to mismatched demand for skills that are diminishing as older workers retire.
3. What skills and experience will be demanded by re-industrialization, reshoring and expanding the electrification of the economy.
Consider these two charts of the US work force by age. (Courtesy of CH @econimica) In the first chart, Total US Employees, note that the prime working age work force (ages 25-54) has been flatlined for the past 20 years at 101-102 million. In contrast, the 55-and-older cohort of employees soared from 17 million to 37 million. This increase of 20 million accounts for virtually all growth in the employed work force.
A funny thing happens as workers get old; they retire and leave the work force. Their skills and experience are no longer available to employers or the nation’s economy. The second chart shows the aging of the American populace, as the 55+ cohort increased from 57 million to 99 million since 2000, as the number of older employees skyrocketed from 17 million to 37 million.
While the total US population increased by 18% from 281 million in 2000 to 331 million today, the 55+ cohort increased 74% (from 57 million to 99 million).
The key takeaway here is the number of experienced workers who will retire in the next decade will track the explosive growth in the 55+ cohort. The general consensus is this will not be a problem because there are plenty of younger workers available to fill the vacated slots.
But this overlooks the qualitative and quantitative differences in the millions leaving the work force and those joining the work force. This is especially consequential in real-world jobs, i.e. all those jobs that require engaging real-world materials rather than staring at screens.
Though few analysts and commentators will admit to it, the implicit assumption is that the jobs that matter all involve staring at screens–processing data, finance, entertainment and shaping narrative make the world go round. All the real-world stuff (boring!) will magically get done by tax donkeys who are out of sight, out of mind.
This mindset has it backwards: it’s the real-world work of changing the industrial / energy / energy distribution foundation of the economy that matters going forward, not the staring-at-screens jobs.
What few seem to realize is the work force that’s aging and retiring is the cohort with the real-world skills. It’s a nice idea to remake the entire electrical grid of the nation to transport much larger quantities of electrical power, but who’s going to do all that work? Young people whose career goals are becoming YouTube influencers or day-traders? No. All the ChatAI bots in the world aren’t going to get the real work done, either.
In other words, there is a massive mismatch between the skills available to hire in the young-worker cohort and the skills and experience needed to rebuild the material, real-world foundations of the US economy. It’s well-known but apparently not worth worrying about that the average age of the US farmer is pushing 60 years of age. Nobody left to grow all our food? Hey, isn’t there a ChatAI bot to do all that for us? It can all be automated, right? No? Well, why not? Somebody out there, get it done! Food in super-abundance should be delivered to everyone staring at screens 24/7, it’s our birthright.
The average age of skilled tradespeople is also skewed to the aging work force. There is no easy way to quantify real-world skills gained by on-the-job experience. I suspect it follows a power-law distribution: the newly minted worker just out of school / apprenticeship can handle basic functions, but when tough problems arise, the number of workers with the requisite experience to diagnose and fix the problem diminishes rapidly.
This distribution presents an enormous problem for the economy and employers. Once the super-experienced workers who can solve any problem leave, they cannot be replaced by inexperienced workers. So when the really big problems arise, the systems will break down because those who knew how to deal with the problems are no longer available.
This is how you can have 10 million unemployed workers and 1 million unfilled positions that can’t be filled because few are truly qualified. You want to erect new electrical transmission lines? Nice, but you’re not going to get the job done with green workers accustomed to staring at screens. It takes years of hard labor to acquire even a bare minimum of the skills required. These are not assembly-line jobs that can be filled by unskilled labor, these are jobs in the messy real world, not a distribution center.
As I note in my book on Self-Reliance, individuals with a full spectrum of real-world skills are now extremely rare. Skills that were once common are now performed by specialists. We seem to have all the time in the world to stare at hundreds of cooking programs on TV but how many people actually prepare three meals a day, week in, week out, month in, month out, year in, year out? How many people know how to repair anything, build anything, or maintain a machine?
My direct experience is that many young people don’t know how to put air in the tires of the vehicle Mom and Dad gave them. Young people with graduate-level diplomas don’t know what a green bean plant looks like. (Eeew, gross, it grows in dirt?) The cultural value system that only values wealth, regardless of its source, and minting money from staring at screens has generated a fundamental mismatch between the skills that will be needed going forward and the skills being presented as oh-so-valuable.
Yes, there are many young workers with sharp real-world skills. The question is, are there enough?
This is how we’ll end up with severe shortages of truly skilled labor and high unemployment in the cohort of workers with few real-world skills and a surplus of skills for which there is limited demand. As a real-world experiment, go find a tough old rancher and ask them a series of questions about livestock, machinery, fencing, generators, etc., and then ask the average newly minted college graduate that followed the warped values embedded in our economy the same questions.
Of course the young worker can’t match the experience of the old worker, but do they have any experience at all of a spectrum of essential real-world skills? If not, do they have the requisite physical endurance and commitment needed to acquire real-world skills?
Who’s going to do all the real-world work going forward? A few people talk about it as an abstraction, but it’s not an issue to everyone focused on Federal Reserve policy or GDP. But eventually, the real world will matter more than staring at screens and day-trading, because when the systems break down due to lack of truly qualified employees, we’ll all wake up. But by then it will be too late. We’ll be staring at dead screens begging for somebody somewhere to restore power so we can continue playing with ChatAI to trade zero-day options.
There is an element of inevitability in play, but it isn’t about central bank bailouts, it’s about Death Spirals and the collapse of unsustainable systems.
The vapid discussions about “soft” or “hard” landings for the economy are akin to asking if the Titanic’s encounter with the iceberg was “soft” or “hard:” either way, the ship was doomed, just as the global economy is doomed by The New Normal of Death Spirals and Speculative Frenzies.
Death Spirals are the inevitable result of entrenched interests clinging on to the status quo and thwarting any adaptation or evolution that might threaten or diminish their share of the swag–and that includes any real change because any consequential modification has the potential to upset the gravey train.
The status quo “solution” is to borrow and blow whatever sums are needed to satisfy every entrenched interest. Filling the federal slop-trough for all the hogs now requires borrowing a staggering $1.4 trillion every year, and billions more in municipal, county and state bonds (borrowing money via selling bonds) on the local level.
This borrow and blow strategy avoids any uncomfortable discipline and difficult trade-offs: everybody gets everything they demand.
This strategy looks “unsinkable” until the iceberg looms dead ahead. History suggests that fiscal and political discipline is eventually imposed by the real world in one fashion or another when diminishing returns enter a Death Spiral.
Any limit on debt is of course “impossible,” just as it was “impossible” for the Titanic to sink. But history is rather implacable in this regard. The self-serving hubris of “impossible” limits on largesse tend to collapse on contact with currency devaluation, structural inflation or a systemic crisis of legitimacy that sweeps away the entire worm-eaten facade of stability.
In other words, the entrenched interests benefitting from the status quo will continue to do what worked in the past until it all implodes. The pain of discipline and modest sacrifices is too great to bear, so let’s collapse the entire system.
Autocracies excel at Death Spirals because they eliminate dissent, transparency and competing nodes of power. Nobody’s left to push back on disastrous policy decisions, so autocratic regimes race toward the iceberg at full speed.
Rather than invest in real long-term solutions, everyone is in the casino, buying options that expire in a few hours. Rather than invest for an entire quarter–whew, three whole months!–speculators now consider a week an unbearably long time to hold a trade.
Speculative frenzies create their own Death Spirals, as gamblers front-run the “guaranteed” bailout of speculators by central banks. This is the consequence of moral hazard being elevated to “guaranteed”: there is no need to actually wait for the inevitable central bank bailout of bets gone bad, we can place bets before the bailout because we know it’s as assured as the sun rising tomorrow morning.
Nice, except central banks and bailouts also reach diminishing returns and enter Death Spirals. Doing more of what’s failed seems to work once, then twice, if you give it enough juice, but the third time is iffy and the fourth time collapses the speculative casino that the status quo was trying to save.
No one who benefits from the Moral Hazard Casino Economy believes it’s no longer sustainable. All the gamblers, big and small, are confident the Federal Reserve and other central banks can cover any losses and make good whatever befalls the casino. The hubris of the punters, big and small, is essentially infinite.
I’ll get out before the house of cards collapses, everyone tells themselves. In the meantime, I’m going to front-run the inevitable bailout of this speculative frenzy.
There is an element of inevitability in play, but it isn’t about central bank bailouts, it’s about Death Spirals and the collapse of unsustainable systems. Death Spirals and speculative frenzies have now been completely normalized. We can’t imagine any other way to operate. But this New Normal won’t last as long as punters believe. Doing more of what worked in the past is only accelerating the casino’s demise.
The Great Moderation of low inflation and soaring assets has ended. Welcome to the death by a thousand cuts of stagflation. It was all so easy in the good old days of the past 25 years: just keep pushing interest rates lower to reduce the cost of borrowing and juice credit expansion ((financialization) and offshore industrial production to low-cost nations with few environmental standards and beggar-thy-neighbor currency policies (globalization).
Both financialization and globalization are deflationary forces, as they reduce costs. They are also deflationary to the wages of bottom 90%, as wages are pushed down by cheap global labor and stripmined by financialization, which channels the vast majority of the economy’s gains into the top tier of the workforce and those who own the assets bubbling up in financialization’s inevitable offspring, credit-asset bubbles.
To keep the party going, central banks and governments pushed both forces into global dominance: hyper-financialization and hyper-globalization. Policy extremes were pushed to new extremes: “temporary” zero-rate interest policy (ZIRP) stretched on for 6 years as every effort was made to lower the cost of credit to bring demand forward and inflate yet another credit-asset bubble, as the “wealth effect” of the top 5% gaining trillions of dollars in unearned wealth as asset bubbles inflated pushed consumption higher.
Corporate profits soared as credit became essentially free and super-abundant and globalization lowered costs and institutionalized planned obsolescence, the engineered replacement of goods and software that forces consumers to replace their broken / outdated products every few years.
Every economic lever was pulled to extend the vast profits generated by hyper-financialization and hyper-globalization. Currencies were manipulated lower to boost exports, cheap credit kept zombie companies alive, bridges to nowhere and millions of empty flats were built to boost jobs and profits, and so on.
At long last, all these gimmicks have reversed or reached marginal returns: they no longer keep inflation suppressed, asset bubbles inflating and profits expanding. The malinvestment of global capital will be revealed and the costs of the policy gimmickry will be paid by years of stagflation: high inflation, low or negative growth and endless debt crises as the reliance on cheap credit to boost profits comes home to roost.
It turns out that the inevitable offspring of hyper-financialization and hyper-globalization are inflation, credit crises and the undermining of national security as the self-serving goal of pushing corporate profits higher via globalization led to fatal dependencies on competing powers for the essentials of modern life.
Correcting these decades-long extremes will take at least a decade as long-suppressed inflation becomes endemic, supply-chain disruptions become the norm and capital has to be invested in long-term national projects such as reshoring and the engineering of a new more efficient energy mix–projects that will only be expenses for many years.
The gains will not even be measured by our current outdated economic metrics of GDP and profits. The gains will be in the national security of essential supply chains and production and in the relocalizing of jobs and capital, not corporate profits.
Our reliance on the endless expansion of credit, leverage and credit-asset bubbles will have its own high cost: the collapse not just of the current Everything Bubble but of the engines that inflated one bubble after another.
Central bank and state authorities are thrashing about cluelessly, as all their gimmicks are now problems rather than solutions. The current policy gimmicks laid the foundations for a decade or more of high inflation, low growth and credit crises as the phantom “wealth” of credit-asset bubbles evaporates.
This will drive a reverse Wealth Effect as the top spenders are crushed by the collapse of asset bubbles. Long-term trends in demographics (shrinking workforces and the skyrocketing population of elderly) and depletion of resources will add fuel to the inflationary / low growth / credit crises bonfires.
Gordon Long and I discuss all these mutually reinforcing trends in A Great Stagflation (36 min). This is the culmination of our decade of programs about all the policy gimmicks that were pushed to extremes to maintain the illusion of stability and growth–an illusion that’s evaporating as it makes contact with stagflationary realities.
After the Crash 