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Welcome to the U.S.S.A.’s Banquet of Consequences

Welcome to the U.S.S.A.’s Banquet of Consequences

The incontestable incompetence of the USSA’s monopolies, institutions and agencies is about to take center stage in 2021.

When I mention that the U.S.A. feels increasingly like the U.S.S.R., a surprising number of people tell me they feel the same way. Welcome to the U.S.S.A.: United Simulacra States of America where everything is an absurdly transparent simulation with little connection to reality and dissent is crushed by an everpresent, ubiquitous narrative police state enforced by the union of Big Tech social media, search and other monopolies and the Savior Statedo what we tell you and you’ll get a piece of our endlessly spewed trillions.

My colleague Mark Jeftovic recommended an insightful book on the unraveling of the USSREverything Was Forever, Until It Was No More: The Last Soviet Generation.

It’s an academic book so there are the required servings of jargon and references to suitably opaque academic tropes, but beneath the conceptual clutter lies a profound analysis of how humans adapt to and navigate a system that has lost all authenticity and survives entirely on the ceaseless marketing of artifice: in other words, the USA today.

Of particular interest are the book’s personal accounts of dutiful Party members going through the motions of obedience as a means of enjoying their private friendships and lives. Joining the Party’s machinery was a way to meet friends who you recruited for your committee work. Everyone went through the motions but nobody actually believed any of it: you did homework while “listening” to the endless canned speeches, you went out for coffee while telling the Party functionary that you were on Party business, and you worked on parades and activities that were a bit of fun despite the dreary official purpose which everyone ignored.

…click on the above link to read the rest of the article…

What Caused the Recession of 2019-2021?

What Caused the Recession of 2019-2021?

The banquet of consequences is now being served, but the good seats have all been taken.As I discussed in We’re Overdue for a Sell-Everything/No-Fed-Rescue Recession, recessions have a proximate cause and a structural cause. The proximate cause is often a spike in energy costs (1973, 1990) or a financial crisis triggered by excesses of speculation and debt (2000 and 2008) or inflation (1980).

Structural causes are imbalances that build up over time: imbalances in trade or currency flows, capital investment, debt, speculation, labor compensation, wealth-income inequality, energy supply and consumption, etc. These structural distortions and imbalances tend to interact in self-reinforcing dynamics that overlap with normal business / credit cycles.

The current recession has not yet been acknowledged, but this is standard operating procedure: recessions are only declared long after they actually start due to statistical reporting lags. Maybe the recession of 2019-21 will be declared at some point in the future to have begun in Q2 or Q3, but the actual date is not that meaningful; what matters is what caused the recession and how the structural imbalances are resolved.

So what caused the recession of 2019-21? Apparently nothing: oil costs are relatively low, U.S. banks are relatively well-capitalized, geopolitical issues are on the backburner and stocks, bonds and real estate are all well-bid (i.e. there is no liquidity crisis).

This lack of apparent trigger will mystify conventional economists who generally avoid the enormous structural imbalances in our economy because those imbalances are the only possible output of our Neofeudal Power Structure in which a New Nobility/Oligarchy dominates financial and political power and skims the vast majority of gains the economy generates.

 …click on the above link to read the rest of the article…

Where Will You Be Seated at the Banquet of Consequences?

The Banquet of Consequences is being laid out, and so the question is: where will you be seated? The answer depends on two dynamics I’ve mentioned many times: what types of capital you own and the asymmetries of our economy.

One set of asymmetries is the result of the system isn’t broken, it’s fixed, i.e. rigged to favor the few at the expense of the many. There are many manifestations of neofeudal asymmetry that divides neatly into two classes and two systems, the nobility and the serfs.

A rich kid caught with drugs gets a wrist-slap, a poor kid gets a tenner in the Drug Gulag.

Upper-middle class households are tax-donkeys, paying high taxes and getting few deductions, while mega-wealthy corporations and financiers enjoy offshore tax shelters of the kind exposed by the Panama Papers.

The stock market operators use high-frequency trading to front-run the market and generate profits that are inaccessible to serfs with retail trading accounts.

And so on. Given that the nobility control the machinery of governance (so-called democracy), there’s no way for commoners to influence the neofeudal cartel-state asymmetries short of shutting down the entire system.

Which leaves the asymmetries created by the dynamics of the 4th Industrial Revolution in which new technologies and business models are destabilizing every sector of the old economy.

The core dynamic here is value flows to what’s scarce and in demand. The asymmetric returns on capital and labor are the direct result of what’s scarce and what’s not scarce and what’s in demand and what’s not in demand.

Ordinary labor and college diplomas are not scarce and therefore command very little premium. Ordinary capital is also not scarce, and hence the low yield on ordinary capital.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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