Thursday, July 28, 2016

Social Fragmentation Suits the Powers That Be

The Elites have successfully revolted against the political and economic constraints on their wealth and power.
Ours is an Age of Fracture (the 2011 book by Daniel Rodgers) in which "earlier notions of history and society that stressed solidity, collective institutions, and social circumstances gave way to a more individualized human nature that emphasized choice, agency, performance, and desire."
A society that is fragmenting into cultural groups that are themselves fracturing into smaller units of temporary and highly contingent solidarity is ideal for Elites bent on maintaining political and financial control.
A society that has fragmented into a media-fed cultural war of hot-button identity-gender-religious politics is a society that is incapable of resisting concentrations of power and wealth in the hands of the few at the expense of the many.
If we set aside the authentic desire of individuals for equal rights and cultural liberation and examine the political and financial ramifications of social fragmentation, we come face to face with Christopher Lasch's insightful analysis on The Revolt of the Elites and the Betrayal of Democracy (1996 book).
"The new elites, the professional classes in particular, regard the masses with mingled scorn and apprehension.... Middle Americans, as they appear to the makers of educated opinion, are hopelessly shabby, unfashionable, and provincial, ill informed about changes in taste or intellectual trends, addicted to trashy novels of romance and adventure, and stupefied by prolonged exposure to television. They are at once absurd and vaguely menacing."
Though better known for his book on the disastrous consequences of consumerism in an era of economic stagnation, The Culture of Narcissism:American Life in an Age of Diminishing Expectations, Lasch's The Revolt of the Elites and the Betrayal of Democracy is the more politically profound analysis, as it links Elite dominance of the media, higher education and cultural narratives to the erosion of democracy as a functioning institution.
Extreme concentrations of wealth and power are incompatible with democracy, as Elites buy political influence and promote cultural narratives that distract the citizenry with emotionally charged issues. A focus on individual liberation from all constraints precludes an awareness of common economic-political interests beyond the narrow boundaries of fragmenting culturally defined identities.
In a society stripped of broad-based social contracts and narratives that focus on the structural forces dismantling democracy and social mobility, the Elites have a free hand to consolidate their own personal wealth and power and use those tools to further fragment any potential political resistance to their dominance.
The Elites have successfully revolted against the political and economic constraints on their wealth and power, and now the unprivileged, unprotected non-Elites are rebelling in the only way left open to them: voting for anyone who claims to be outside the privileged Elites that dominate our society and economy.
As long as the American public chooses to focus on individual liberation and consumerist expressions of "freedom," the Elites will have a free hand politically and financially.
The Powers That Be excel at claiming they are busy reforming a broken system,even as they co-opt, water down or outlaw any real reform that threatens their concentrations of wealth and power: Why Our Status Quo Failed and Is Beyond Reform.
Precisely what does individual "liberation" mean in a neofeudal society of indebted financial serfs?


My new book is #4 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Bruce M. ($50), for your fantastically generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

Wednesday, July 27, 2016

Will Any Future POTUS Matter (Other Than Launching More Wars)?

We are already experiencing the powerlessness of POTUS.
We all know the POTUS (President of the United States) has the power as Commander-in-Chief to engage the nation in senseless, costly, needless wars.We also know the POTUS has a media-saturated bully pulpit to set an agenda and fashion a cultural tone for the nation.
But beyond the power to wage war and dominate the media spotlight, does the President have the power to solve the structural problems that are eroding the nation's economy and social contract?
This chart summarizes one such problem: wage earners are receiving a diminishing share of the nation's output (GDP):
A second related problem is the national income that is flowing to wage earners is increasingly flowing to the top 5%:
If the president can't solve the nation's systemic problems, then he/she no longer matters. The President, outside of declaring war, is nothing but a source of "news" chum for the media feeding frenzy aimed at grabbing eyeballs to maximize advertising revenues for the media's corporate owners.
Analyst Gail Tverberg explained why the political machinery of POTUS cannot change the downward trends in household earnings in a series of insightful essays, most recently Overly Simple Energy-Economy Models Give Misleading Answers.
Tverberg considers the costs of finance/debt and complex hierarchies in the matrix of energy production and consumption, and references the work of Joseph Tainter on the systemic impact of the rising cost of complexity.
In a similar vein, I have often mentioned The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization by Thomas Homer-Dixon.
In summary: successful civilizations generate sufficient surplus to invest in complex hierarchical communication-command-control mechanisms which boost productivity and generate additional surplus. The cost of these complex systems continually rises while the increases in production eventually plateau and decline in an S-Curve:
The net result is a society with higher costs and diminishing returns. Eventually the costs of maintaining the status quo exceed the benefits of maintaining the status quo hierarchy and the society decays and collapses.
My own work has focused on two dynamics of the cost of increasingly unproductive complex systems. One is privilege, which can be defined as unearned wealth and power. Privilege is by definition unproductive, and a drain on the economy and society. Once the privileged class (i.e. the protected class that shifts risks and taxes to the unprotected/non-elite classes) expands and social mobility decays, the economy collapses under the dead weight of the privileged class.
I covered the history and dynamics of this process in The Lesson of Empires: Once Privilege Limits Social Mobility, Collapse Is Inevitable (April 18, 2016).
The second dynamic is the destructive consequences of a self-serving political-financial elite that is structurally incapable of real reform because real reform will collapse the high-cost structures that enable the concentration of wealth and power.
I explain these dynamics in Why Our Status Quo Failed and Is Beyond Reform.
I know this runs counter to the media-supported delusion that POTUS is the most powerful person on Earth, but in reality it no longer matters who's president. The inevitable collapse of a debt-based model of complexity, energy extraction and consumption is already baked in.
The only potentially positive role of any President would be to downsize the unrealistic expectations of the citizenry to align with real-world dynamics. But downsizing expectations doesn't get you re-elected, so the political reality is that future presidents will no longer matter in terms of solving the critical problems we face in the coming decades.
We are already experiencing the powerlessness of POTUS: the campaign for the office of President has already been reduced to two poor players that strut and fret their hour upon the stage, a tale told by an idiot media, full of sound and fury, signifying nothing.


My new book is #3 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Frankie M. ($50), for your stupendously generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

Tuesday, July 26, 2016

A Psychiatric Diagnosis of the U.S. Market: Schizophrenic Disconnect From Reality, Bipolar Mania, Psychotic Delusions of Wealth

If you think a delusional market is healthy, it's time for a psychiatric exam.

What diagnosis would an experienced psychiatrist offer when presented with the bizarre behavior of the U.S. stock market? We assume that the wild mood swings of greed and fear are "normal" for markets devoted to short-term profit and speculation, but the stock market's disconnect from reality is far beyond mere mood swings.
The stock market thinks it's solidly on pavement, but in reality it's like a car flying off a cliff: the Wiley E. Coyote moment is just ahead. There's nothing but air beneath the stock market.
Consider the reality of PE expansion from a price-earnings (PE) of 10 at the bottom in 2009 to 18+ today, while profits are stagnant. And what is driving this expansion other than a delusional belief that profits will magically reverse and log massive gains in the second half of 2016?
If we strip out "one-time expenses" and other accounting flim-flam, profits are plummeting. How else can we characterize this disconnect between stagnant sales (look at Apple, CAT, etc.) and "profits" that are one step away from outright fraud as anything other than delusional?
As global trade, U.S. rail traffic and other non-gameable measures of economic activity stagnate or decline, how can anyone connected to reality expect sales and profits to rise sharply?
The stock market is hitting new highs for what reason? The typical answer is: more central bank stimulus is on the way, the Fed/ BoJ /Bank of China/ European Central Bank have our back, etc. etc. etc.
But the reality is obvious to all: the returns on central bank stimulus have declined to near-zero. Trillions in additional stimulus are needed to just keep the delusional markets from experiencing gravity (see car photo above).
And how about the manic mood swings from panic in February (i.e. a whiff of reality) and the euphoria of new highs in summer? If this isn't the acme of bipolar delusion, then what is?
Perhaps the greatest delusion is the confidence that this ephemeral bubble "wealth" is actual wealth that can be counted on to fund pensions and insurance claims in the future. Pity the deranged souls who actually believe that stock gains based on fraudulent claims of "profit" and delusional expectations of rising profits as the dollar strengthens and the global economy implodes are "wealth" that can be considered permanent.
The only possible diagnosis of this stock market behavior:
1. Patient (the U.S. stock market) is suffering a schizophrenic disconnect from reality.
2. Patient (the U.S. stock market) is suffering from bipolar mania that leads to delusional beliefs in delusional profits and delusional central bank omnipotence.
3. Patient is suffering from psychotic delusions of wealth, akin to the delusion that the patient is ruler of the world, galaxy, universe, central banks are all-powerful, etc.
If you think a delusional market is healthy, it's time for a psychiatric exam.


My new book is #3 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Frankie M. ($50), for your stupendously generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

Monday, July 25, 2016

Why Real Reform Is Impossible: We Can't Believe the Mighty Titanic Could Actually Sink

Unfortunately for those partying on the upper First Class decks, they are as doomed as the steerage passengers when the ship goes down.
Why did passengers remain on the Titanic even as its bow sank deeper into the ice-cold Atlantic? They believed the experts and authorities because they wanted to believe the ship was "unsinkable." And why did they want to believe the ship was "unsinkable"?
Two visceral realities fueled their misplaced faith in the ship's supposed safety:
1) The warm ship seemed so mighty, and the alternative--open lifeboats drifting in the dark cold night--seemed so vulnerable, uncomfortable and risky.
2) It was much easier to believe the experts' assurances that the ship was safe than it was to clamber into a small lifeboat and bob around the open Atlantic.
We all know which alternative turned out to be safe and which one was fatally unsafe. The apparently risky open lifeboats were the sole source of survival and the enormous, complex "unsinkable" ship sank, ending the lives of everyone who clung to the appealing fantasy that the mighty ship was too technologically advanced to sink.
We are all on a Titanic, a complex system that experts and authorities declare safe and unsinkable for all time. Our money, our government, our Social Security, our Medicare and our entire debt-based way of life is mighty and invulnerable. Those few who see the eventual need to prepare "risky" lifeboats are mocked and ridiculed.
But the status quo's bow is already sinking into the ice-cold waters of reality.The only way the status quo can support the debt-based financial system and government that funds all these vast systems is if the economy creates 10 million more "breadwinner" jobs (in David Stockman's definition, a job that earns enough to support a family of four) a decade.
These new jobs are needed to raise the additional $1 trillion per year in payroll and income taxes needed to keep the fiscal ship afloat, and to provide the household income needed to support trillions more in private-sector debt--new home mortgages, auto loans, student loans, credit card debt, etc.--that's needed to support consumption.
If the status quo can't create at least 10 million new breadwinner jobs a decade, it sinks just as surely as the Titanic, which was doomed the moment the fifth watertight compartment was ripped open by the iceberg.
And please don't tell me we can raise $1 trillion in new annual taxes by "taxing the owners of the robots," another "unsinkable" fantasy I dismantle in my books Why Our Status Quo Failed and Is Beyond Reform and A Radically Beneficial World.
Now that software and robotics are commoditized, the scarcity value of these tools and the goods they produce is plummeting. Take a look at profits in commoditized goods: they're razor-thin, and getting thinner by the day. As the cost of software/automation tools drops, they become affordable to an ever-larger pool of owners/producers, which means the competition from new owners will increase until there is no profit at all.
And exactly how do you extract $1 trillion in phantom profits from "owners of robots" who happen to be overseas? The belief in "taxing the owners of robots" is identical to the doomed souls on board the Titanic believing the ship was unsinkable.
The belief in the status quo's permanence is exactly like the belief in the Titanic's invulnerability. The systems we depend on are so vast and seem so mighty, it doesn't seem possible that they could unravel and fail. But their eventual unraveling and failure are already baked in and cannot be undone by the modest tweaks of what passes for "reform" in the status quo.
The financial realities of systemically stagnant jobs, incomes and tax revenues have already ripped a fatal gash below the waterline of the status quo. The bow is sinking but the parties on the First Class deck continue. The passengers in steerage are getting anxious because they see the cold water sloshing around the lower decks, but few on the upper decks care what mere steerage passengers are experiencing.
Unfortunately for those partying on the upper First Class decks, they are as doomed as the steerage passengers when the ship goes down.
As the supposedly risk-free status quo decays, the supposedly "risky" lifeboats-- decentralized private-sector arrangements of multiple income streams derived from ownership of productive assets that are debt-free and not dependent on debt-based government funding or global corporate cartels--will be cooperating and collaborating with each other.
Those seeking lifeboats will benefit from the Mobile Creative credo: trust your network, not the corporation or the state.
My new book is #10 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Frankie M. ($50), for your stupendously generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

Sunday, July 24, 2016

How Do We Make America Strong Again? Start Telling the Truth

You want to make America strong again? The only way to do so is to start telling the truth and insisting on the truth.
"Making America Strong Again" is a potent political narrative. But what does "being strong" mean? For some, it's a code-phrase for bullying--forcing other nations to do our bidding.
For others, it describes a re-emergence of widespread domestic economic vitality.
Another audience sees the rebuilding of a social contract and social cohesion as the essence of strength.
As laudable as some of these interpretations of strength might be, to me "being strong" boils down to one principle, and only one principle: tell the truth, however painful and unwelcome as it might be. The essence of weakness is the cowardice of avoiding the truth. We as a nation have grown accustomed to the cowardice of half-truths, half-confessions, half-apologies and a financial system that rewards fraud in all its variations of artifice, deception and lies.
What's presented as "fact" is actually a spectrum of manipulation and lies.Does anyone with a basic grasp of the economy really believe unemployment is 5% or less? Does anyone seeking the truth believe that a person working one hour a week is equivalent to someone working 40 hours a week? Isn't counting both of these positions as equally statistically important jobs a form of not telling the truth?
If you hold great wealth and power, and the source of your wealth and power is illegitimate, you must dissemble, fabricate, propagandize and lie to hide the illegitimacy of your power. That is the status quo of the U.S. in a nutshell. Those who earned wealth and gained power legitimately have no fear of the truth. Those whose wealth and power is illegitimate fear the truth more than anything else.
The Power Elite of the nation has purposefully co-joined "America" and "Empire," as if the two cannot be separated. They have successfully conned much of the public into a strained belief that the U.S. isn't an Imperial Project, that we're just looking out for our "interests," which just happen to extend into every nook and cranny of the entire planet.
The Power Elite has also purposefully confused bullying with strength. Bullying fails because the bullied hate the bully with every fiber of their being. True strength flows from opt-in, mutually beneficial alliances that people and nations join out of self-interest. Such opt-in relationships can only endure if telling the truth is the core principle, for truth is the foundation of trust, and trust is the foundation of durable alliances and cooperative networks.
The Power Elite of the nation has pushed the narrative that its own rising power reflects the rising power of the nation. Nothing could be further from the truth.The increasing concentration of wealth and power in the hands of the few at the expense of the many is the source of America's weakness, vulnerability and fragmentation.
Take a look at this chart. While GDP per person (per capita) has been rising, household income has been declining. What does that tell us about the economic growth we keep hearing about? That it's flowing to the top and being drained from the bottom 80%.
Telling the truth, and insisting on the truth, requires courage, a moral foundation and strength. Telling lies, accepting half-truths and living with fraud as a way of life is easy because it requires no courage, moral foundation or strength.
You want to make America strong again? The only way to do so is to start telling the truth and insisting on the truth. Accepting statistical lies, propaganda and fraud as "truth" because it's easy and doesn't challenge our assumptions is a one-way road to ruin.
My new book is #10 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Frankie M. ($50), for your stupendously generous contribution to this site-- I am greatly honored by your support and readership.

Read more...

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:
Correspondents' email is strictly confidential. The third-party advertising placed by Adsense, Investing Channel and/or other ad networks may collect information for ad targeting. Links for commercial sites are paid advertisements. Blog links on the site are posted at my discretion.


Our Commission Policy:
Though I earn a small commission on Amazon.com books and gift certificates purchased via links on my site, I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP