Stuck In Time

We all seem to have this thing we do where we get stuck in time on a particular topic. We all do it with music – some timeframe in our life in which the music meant something and we just do not proportionally progress from that timeframe. For example – I find myself listening to a lot of Led Zeppelin and The Who, I know all the words to ‘Thick As A Brick’ by heart. However it is not just music – we all have a favorite era from the past for vehicles and art and many other things.

Unfortunately people also seem to have a favorite era in the past for political and economic solutions. Everyday I see people arguing for solutions as though we were still on the gold standard, as though Humphrey-Hawkins never existed, as though every dollar of credit introduced still resulted in three or four dollars of economic growth rather than the twenty-five cents of economic growth each dollar of additional credit is now producing, as though we were not completely aware that socialism (including ‘democratic socialism’) did not achieve parity via mass poverty.
This is part of our general national disfunction – we keep trying to solve the problems of the 1950’s or 1970’s or 1980’s over and over and over again – even though those problems are long gone and we are off to a brand new set of problems that will require a brand new set of solutions. This makes us collectively very vulnerable to politicians and propagandists who will exploit our fondness for our favorite solutions from the past. To a large extent these politicians and propagandists are setting up straw man problems which fit the solutions they wish to implement – none of which will solve the actual problems we have but which will inevitably make their friends wealthier at your expense and get them elected.
Even if their sincere intent is not to ‘make their friends wealthier at your expense’ that is the inevitable outcome of these straw man arguments. Smart people can make a lot of money on that delta between fantasy and reality.
‘Wealthier at your expense’ has been the model for some time now – and the ‘wealthier at your expense’ model has been accelerating since the late 1970’s. I could go through explaining a whole bunch things that occurred in the 1970’s that would explain why this is – but suffice it to say that it is overly simplistic to argue that simply rolling back to a pre-1971 world would solve our problems. That world no longer exist.
This is the heart of where we are as a culture, as a society, as a nation – the world we were taught we lived in, the world we expected to live in and the world we actually live in do not match and we seem to have unnecessarily difficult time dealing with that reality. I am sure there are sociologist and psychologist who possess all kinds of theories as to why that is – but we are being torn apart as a culture, as a society, as a nation because it is. Misdiagnosing problems and arguing vehemently over the appropriate solution to the misdiagnosed problem has now replaced baseball as the national pastime. The basis of these solutions is typically that the last one hundred or seventy-five or fifty or twenty years simply didn’t occur – it is deceit (intentional or not) by omission.
It is self-delusion.
“Sometimes societies just collectively go insane”
*By the way I am not exempting myself from this self-delusion – it is ubiquitous – but I do try very hard to be aware of it and try my best to validate my facts beyond simply finding data that confirms what I want to believe is true. That being said sometimes I am no doubt self-delusional as well. This is an observation not a ’holier-than-thou’ argument.

Other Side Quote Of The Day

Other Side Quote of the Day: “Brexit isn’t the end. A lot of people would like it that way, even people on another continent where the newly elected US President was happy that the Brexit was taking place and has asked other countries to do the same. If he goes on like that I am going to promote the independence of Ohio and Austin, Texas in the US.” – EU Commission President Jean-Claude Juncker

“Sometimes Societies Just Collectively Go Insane”

It seems at least once a week that I quote what James Kunstler said in February of 2016 – “Sometime societies just collectively go insane.”

Kunstler’s reasoning for why this occurs is interesting (and he has provided previous historical examples of such) – in that societies lose the courage, the appetite, the willingness to deal with major problems. This is a gradual process – it does not just happen one Tuesday at noon – that evolves into an unwillingness or perhaps even inability to see that major problems exist. Societies which find themselves in this state substitute the trivial, less important or even fictional problems for the actual problems and hence end up living in a fantasy world –  “Sometime societies just collectively go insane” – of spending their time and energy and resources attempting to solve the meaningless or non-existent problems until they are overwhelmed by the inevitable and relentless grind of the actual major problems which they have failed to even acknowledge until it was too late and undeniable.

FYI for some perspective on this – Kunstler is a Democrat who thinks his own party has simply gone insane – so don’t think this is some wild libertarian theory.

FYI some more – Kunstler thinks both parties have gone insane and that it is a reflection of  “Sometime societies just collectively go insane.”

We have real problems and we have real problems around basic things like math and that what governments at all levels have signed up to provide is not mathematically possible without having made those obligations valueless. We have built – to a large extent – our society on government fulfilling these obligations. That we are racing down the trail of making these obligations valueless seems not to be on anyones agenda.

I think is the key word here is valueless. We are racing as a society to make all sorts things which should be of immense value – valueless. We will regret that.

I am not dogmatic about this – but it is truly the best explanation I know of for what is happening to us.

Buckle up…

A Few Thoughts On Trade And Globalism

A few thoughts on trade and ‘globalism’ and all that –

Reality is that worldwide trade growth has been in decline. Why is this? That the world is awash in overproduction of commodities is the primary culprit. There is also talk of having reached peak oil consumption and such – but that is a different topic. Governments worldwide goosed their economies for eight years to enhance production and employment and tax revenue and on and on. This has created a surplus of almost everything. That supply and demand dynamic is attempting to return to equilibrium.

People around the world seem not to be cognizant that trade growth is declining globally and have acquired a belief that it is only ‘their’ trade that is declining – and the tangential belief that ‘someone’ has stolen their fair share of trade. Hence the popular remedy has become very nationalistic – not just in the United States but nearly everywhere.

Basic problem – trade is in decline because individual nations collectively produced more than there is a demand for which has resulted in prices dropping and some countries trying to ‘dump’ commodities and manufactured products  on other countries. This has also caused all kinds of other issues in the attempt to dispose of products, i.e. subprime auto loans in the United States and so forth. Reality is that production has exceeded demand due to governments having distorted markets.

Most economist would diagnose the solution as needing to increase demand – and they would historically do that by lowering interest rates and loosening credit requirements. However we are already at ZIRP and NIRP and awash in subprime loans so it is difficult to see how doing more of that will increase demand or even arrest the slide in demand.

I would guess that these markets will rediscover equilibrium. That is unlikely to lead to peace and happiness. Remember, if goods do not cross borders then armies will. We already see Brazil and Russia and such being savaged by the markets attempt to return to equilibrium. Saudi Arabia is bleeding and Australia is wounded.

In many of these nations a return to equilibrium is likely to lead to social and political crisis. That is likely to lead to significant change in the world order. One leads to the other which leads to the other.

The ‘globalist’ are really interested in global political stability but their neo-Keynesian policies have created growing instability. Not only do they not know how to escape the problem they created, the people who populate these countries are growing increasingly – and sometimes violently – impatient with their inability to escape the problem.

Into this walks Donald Trump.

What will Trump do? I have not a clue. A lot of protectionist talk but how much of that is just staking out a negotiating position? He certainly understands that global trade is declining – and why. He also certainly understands that tariffs as a negotiating position is useless as an idle threat, you have to follow through for it to have any teeth or for other countries to take it seriously.

I also cannot but help think that he understands that tariffs will exacerbate the problem of declining world trade.

Hence I have not a clue where this all leads.

Buckle up, it is likely to be bumpy ride for a while.

Amplifying When the “Solutions” Become the Problems

Charles Hugh Smith published an insightful post on his blog this week, you can read it here.

The gist of the post concerns solutions that are simply becoming the next problem. From the post:

If we look at yesterday’s chart of overlapping crises, we note each crisis began as a purported “solution.” The “solutions” are: more debt (now a problem); more centralization (now a problem); financialization (now a problem); promising more benefits to everyone (now a problem), and so on.

The cold truth is all these institutional-state-cartel “solutions” serve the few at the expense of the many. This is not a side-effect; it is the intended output of these “solutions.” In other words, these “solutions” work great for the parasitic few at the top skimming all the wealth, power and income, at the expense of the exploited many and the stability of the system as a whole.
Those benefiting from these destructive “solutions” may think the system can go on forever, but it cannot go on when every “solution” becomes a self-reinforcing problem that amplifies all the other systemic problems.

Andrew Breitbart often famously said, “Politics is downstream from culture.” Our culture appears to be more focused on avoiding the pain than solving the problems – however avoiding the pain requires us to also avoid reality. James Kunstler remarked here:

These days, the hardships of history are shattering the nation and our response politically has been to take refuge in a matrix of rackets. Most of these rackets are economic, because it’s the essence of racketeering to extract the greatest benefit possible from the object of your racket at the least cost to the racketeer. In plain English, it’s an organized way of getting something for nothing. The identity politics of our time is another form of racketeering — extracting current maximum benefits on claims of mistreatment, often bygone, specious, or only imagined.

And so one of the truly existential questions of the moment is whether we’ll continue to be a nation, even geographically, and a lot of sentient observers aren’t too sure. Apparently we’re not too sure we even want to be. This is why the campaign slogan of Hillary Clinton, “Stronger Together,” rang so false when the Democratic Party worked so diligently in 2016 to construct separate identity fortifications and then declared culture war on the dwindling majority outside the ramparts. And you’re surprised that Donald Trump won the election?

We are apparently no longer willing to face our problems as a coherent, cohesive people – we are divided into identity groups fighting each other over table scraps. This trend does not just threaten our economic fortunes but our ability to maintain ourselves as a national entity. Conversely the matters we are focused on have little to nothing to do with our actual problems – and the solutions merely feed into the next set of problems.

So – take a big step back and take a deep breath – understand that no one at the moment has an appetite to deal with our actual problems and there is very little demand to deal with our actual problems as yet.

Hoping to help change that.