{"id":20336,"date":"2016-04-28T18:55:48","date_gmt":"2016-04-28T23:55:48","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20336"},"modified":"2016-04-28T18:55:48","modified_gmt":"2016-04-28T23:55:48","slug":"why-real-reform-is-now-impossible","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20336","title":{"rendered":"Why Real Reform Is Now Impossible"},"content":{"rendered":"

Why Real Reform Is Now Impossible<\/a><\/h3>\n

The endless bleating of well-paid pundits in the corporate media about “reform” is just more circus.<\/i><\/p>\n

It’s difficult for well-meaning pundits to abandon the fantasy that meaningful reform is possible.<\/b>\u00a0Indeed, a critical function of the punditry and corporate media is to foster the fantasy that the status quo could be reformed if only we all got together and blah blah blah.<\/p>\n

As I explain in my new book\u00a0Why Our Status Quo Failed and Is Beyond Reform<\/a>,\u00a0real structural reform would trigger the collapse of the status quo<\/i>. (As a reminder, the status quo benefits the few at the expense of the many.)<\/p>\n

But there’s another dynamic that makes reform impossible.<\/b>\u00a0I’ve prepared a chart to explain this dynamic:<\/p>\n

<\/a><\/p>\n

Central banks have transformed the market–in stocks, bonds, commodities and risk–into the signaling mechanism that tells us all is well.<\/b>\u00a0Even though the real-world finances of the bottom 95% continue deteriorating, a rising stock market and suppressed measures of risk signal that the economy is doing well. If you’re not doing well, it’s your personal problem; the status quo is fine and needs only minor tweaks.<\/p>\n

Elevating the market into the oracle of economic health creates a systemic risk:<\/b>\u00a0If the market tanks, the status quo is called into question. People start asking, is it truly a wonderful arrangement that benefits us all, or is it really just a skimming machine that funnels money and wealth from the many into the voracious maws of the few?<\/p>\n

Central banks thwart this existential danger to the status quo by rescuing the market every time it approaches the\u00a0market clearing event<\/i>\u00a0level. (see chart)<\/b>\u00a0In a\u00a0market clearing event<\/i>, risky loans and bets are liquidated, credit dries up, risk soars and the price of assets falls to levels that once again make fundamental sense.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Why Real Reform Is Now Impossible The endless bleating of well-paid pundits in the corporate media about “reform” is just more circus. It’s difficult for well-meaning pundits to abandon the fantasy that meaningful reform is possible.\u00a0Indeed, a critical function of the punditry and corporate media is to foster the fantasy that the status quo could […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,127,4593,506,4924,690,1302],"class_list":["post-20336","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-charles-hugh-smith","tag-failure","tag-markets","tag-oftwominds","tag-risk","tag-status-quo"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20336"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20336\/revisions"}],"predecessor-version":[{"id":20337,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20336\/revisions\/20337"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}