Remember all of those credit card and loan offers you used to receive in the mail? Bad credit? No credit? No problem. 0% APR for the first six months. Free balance transfers. No money down. And my personal favorite– no credit check. These were all classic signs that the mother of all liquidity bubbles was upon us. Looking at the expansion of credit across the West, though, it’s happening again. Fool me twice, shame on me. But this is a worldwide phenomenon now.
In recent weeks the concept of capital has been thoroughly, and incorrectly, deconstructed by Marxists and Keynesians alike now that, suddenly, the world caught up with what we said would be the crux issue back in 2011: record wealth inequality (who could have possibly foreseen it following $10 trillion in central bank balance sheet expansion in the last decade), and finding "fair" ways of confiscating the wealth of the rich to - at least on paper - help the poor even if in reality all it would do is simply lead to more government theft, embezzling, corruption, and capital misallocation. It is now time to get an Austrian perspective and courtesy of unrepentant "Austrian" Sean Corrigan we just got one.
The economy is changing in structural ways that affect not just the job market but the nature of work itself.
Why have the costs of a middle class lifestyle soared while income has stagnated? Though it is tempting to finger one ideologically convenient cause or another, there are four structural causes to this long-term trend...
The "middle class" has atrophied into the 10% of households just below the top 10%. The truth is painfully obvious: a middle class lifestyle is unaffordable to all but the top 20%. This reality is destabilizing to the current arrangement, i.e. debt-based consumerism a.k.a. neofeudal state-cartel capitalism, so it is actively suppressed by the officially sanctioned narrative: that middle class status is attainable by almost every household with two earners (a mere $50,000 annual household income makes one middle class) and middle class wealth is increasing.
Economist John Maynard Keynes described the effects of inflation citing Vladimir Ilyich Lenin this way: “Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” This is why governments love inflation so much and hate gold.
Ukrainian soldiers have nothing. People had been donating money to support them. While the West's injection of career politicians only replaced the head - Yanukovich - what is going on now is the corruption the people were revolting against is still in the first place. Money donated to the soldiers has not been getting to them. Now the Ukrainian people are simply bringing food to their own troops because the corruption takes the money. Ukraine's soldiers have taken to Facebook to ask for help...
We’ve been hearing a lot about the so-called Deep State lately. What to make of this shadowy monster? Some observers link it to the paranoid fantasy called the New World Order, a staple of political talk radio (and a hobgoblin I don’t believe in). In popular movies such as the Jason Bourne epics and Mission Impossible, the Deep State launches hyper-complex schemes that work flawlessly and never fail. That is exactly why they have such high entertainment appeal. Viewers are thrilled by the precision, by the conceit of seeming infallibility. The Deep State definitely exists; it just doesn’t work the way it is depicted in the movies. We like to say that we're allergic to conspiracy theories because human beings are generally too inept to carry out schemes at the grand scale, as well as being poor secret-keepers. Insider knowledge is almost always swapped around, even in secretive organizations, often recklessly so, because doling it out confers status, tactical advantage, and sometimes money for the doler-outer. But the Deep State isn’t a secret. It operates in plain sight.
If we only voted for unbuyable candidates, money would become poison in politics rather than mother's milk.
This system is on the way out. It will reset. Like feudalism before, our system will go the way of the historical dust bin. And future historians will look back (just as we view feudalism) and say “why did they put up with that nonsense…? This reset is nothing to fear. Human beings are incredible creatures who have a long-term track record of growth. We rise. We progress. As Jobs notes, human beings were fundamentally tool creators. We take our situation, however grim or rudimentary, and we make it better.
There is nothing fancy about these three solutions. They shift the incentives away from speculation to earned income/productive work, they lower regressive taxes on the middle class and working poor and they do not restrain legitimate enterprise and wealth accumulation. They eliminate complex systems (the Federal Reserve and the tax code) and put money in the hands of tens of millions of households rather then the top .1%. Yes, they are utopian, but only because we keep electing the same bought-and-paid-for Demopublican lapdogs of the super-wealthy and vested interests.
probability that Apple will introduce a brand new product category in the near future is incredibly high
If her neighbor had told her she had won a million bucks I suspect she would have treated the news with a great deal more skepticism. Let the buyer of the belief beware.
There are many ways to slice and dice America's power/wealth hierarchy. The conventional class structure is divided along the lines of income, i.e. the wealthy, upper middle class, middle class, lower middle class and the poor. We suggest that a more useful scheme is to view America through the lens not just of income but of political power and state dependency. Sadly, eight of the nine classes are hidebound by conventions, neofeudal and neocolonial arrangements and a variety of false choices.
The real problem with Piketty's taxation/social welfare solution to wealth inequality is that it does nothing to change the source of systemic inequality, debt-based neofeudalism and neocolonialism.