The USA has gone so crazy in these months of the coronavirus freak-out that an orgy of looting, arson, and murder, on top of epic job loss and business failure, propelled the stock markets up-up-and-away back to near-record highs.
Makes sense, right?
The market came down a bit towards the end of the week, but don’t worry. The Fed will make another announcement that it’s going to do something or other and presto, the market will be off to the races again.
In the background of these weeks of protests, riots, looting, and arson is the disintegrating economy, which signifies that pretty much everybody in this land will not be able to keep on keeping on in the ways we’re used to.
Reduced Living Standards
Everybody will have a harder time making a living. Everybody will endure shocking losses in wealth, status, and comfort. And, sadly, everybody will be too perplexed and bamboozled by the rush of events to understand why.
The short version of that story is we’ve overshot our resources, especially the basic energy resources that all other activities require.
This mystifies the public, too, but you can boil it down to the cost of getting oil out of the ground being too high for customers and not high enough for the oil producers to cover their costs — a quandary.
One result has been the rapid bankruptcy of the shale oil industry. Another is the incremental impoverishment of what used to be America’s broad middle-class — a malady that has, just for now, fenced off the denizens of Wall Street, the notorious One Percent (of the population), who still luxuriate in zooming share prices and dividends while everybody else sucks wind in a ditch with-or-without the added affliction of Covid-19.
The perplexed and bamboozled include the entire leadership nucleus of the land, who seem starkly unable to act coherently in the tightening vortex of crisis.
Piling on More Debt
While Mr. Trump seems to dimly apprehend the urgent need for economic restructuring, he’s able to express it only in messages that sound like a 1961 Frigidaire commercial, with overtones of Marvel Comics superhero grandiosity.
The president may understand that a country can’t consume stuff without producing stuff, but he doesn’t get that it’s too late to bring back all that activity at the scale we used to run it when he was a young man in the 1960s.
His answer to the call of restructuring — what the Soviets called perestroika before they fell apart — is to pile on more debt, that is, borrow more from the future to pay for hamburgers today.
That dovetails neatly with the needs of the financial community, led by the hapless “Jay” Powell at the Federal Reserve, who is on a mission to destroy the U.S. dollar in order to save the banking system and its auxiliaries in the stock markets.
He literally doesn’t know what to do — except “print” more dollars to support share prices, a symbolic talisman of theoretical economics that has less and less to do with what people actually do on-the-ground in the hours when they’re not sleeping.
It looks unlikely that the Fed will rescue either Wall Street or Main Street. The longer he props up the former at the expense of the latter, the more certain it is that it will provoke insurrection that goes well beyond the current hostilities.
Vanishing Commerce From Cities
The looting and arson of recent days hugely aggravated a central feature of it: the destruction of small business.
In Minneapolis alone, the damage stands at $100-million. Things were difficult enough under the strictures of Covid-19, but this guarantees that many cities will not see the return of commerce — and there are only a few other reasons for cities to even exist.
Not only did the Democratic Party fail to object to the mayhem, but the city governments they controlled abetted, incited, and applauded the anarchy.
Meanwhile, last Saturday in Tulsa, Mr. Trump made the signal error of bragging on the latest highs in the stock markets. Hasn’t he learned by now what a flimsy representation of reality that is?
Evidently not. The air may be coming out of that lifebuoy in the next couple of weeks, and his election prospects will sink with it.
This will happen as the nation approaches the dark moment when the postponement of debt repayments ends. Imagine how many mortgage, car payments, and small business loan defaults will crackle across the land, and how that will thunder through the banking system.
Civil and Social Collapse Before November 3?
Anyone with half a brain knows that only the strenuous manipulations of the Federal Reserve have kept stocks levitating, doing the only trick they know how to do: printing money by digital keystrokes.
There are so many dimensions to that blunder, it could hasten a more complete economic, civil and social collapse before November 3.
If markets somehow magically stayed elevated, would all those Americans dispossessed of houses, cars, and businesses not feel more resentful than ever about the skullduggery of the elites?
And might they form a third faction in a burgeoning civil war against both the Woke Left and the Trump-led government? And what if the Federal Reserve’s stupid trick of money-printing destroys the value of the dollar per se?
That’s hardly a far-out scenario.
Beware the 4th of July
Events are rushing ahead at a pace you can barely follow. Summer is underway and why, now, would you expect any lessening in civil disorders?
The summer heat is always an invitation to raucous behavior on the steamy streets. Have Chuck Schumer and Nancy Pelosi appealed to their followers to end their violence?
Maybe I missed that. They are hinting at a return to Covid-19 lockdown conditions — but you can forget about anyone following that when the temperature tops ninety degrees (and certainly the Dem leadership knows that).
Meanwhile, the devastation of small business, careers, livelihoods, households, and futures continues.
Then, there’s the sinister joker-in-the-deck next week. It’s called the Fourth of July. It’s hard to imagine a fatter target for those who are truly intent on making things as bad as possible than that particular holiday. Hey, they’ve already torn down statues of George Washington.
What else is left to trash?
Take measures to protect your own future, as far as possible. Put your energy into imagining how you can be helpful to other people, and perhaps incidentally earn their trust and their assistance in mutually beneficial ways.
Think about finding a plausible place to live where the rule of law perseveres. Think about how you might fit into an economy run at a smaller scale. Start taking action on that thinking.
There’s potential for a lot of people to get hurt in the disorders-to-come.
There’s plenty you can do to not be one of them.