Our future is increasingly looking like either an Elitist Authoritarian style Socialism with lower standards of living and lots of small wars, or Populist Authoritarian Dictatorial style "Capitalism" which will drive us to one big war and lots of dead people - Vince Lanci
Amazon economy? Bankrupt states? Obamacare? MEH. None of that matters, Vince Just wake me when the little fat guy nukes one of our carriers.- "Bon Scott"
Demographics as Political System Driver
Is Venezuela a proxy for the US? Initial reactions, our own included, are NO WAY. But think about it. The 2008 bank bailout was the opposite of capitalism. Obamacare is a socialization of medicine. Medicare claims rise, skilled jobs and people (drug addled?) available for them are disappearing.
It would seem as the East (growing young taxable middle class population) moves towards a capitalistic (not democratic) model, we are moving towards a more socialist system. And that is in no small part because of our demographics. The baby boom generation distorts every thing they touch demographically: from homes, 401ks, to Gyms, and now healthcare. This is not a judgment, although we have done a polemic style piece blaming them for everything before.
The wave of Boomers from birth to death were the most powerful drivers of secular trends we have witnessed. And like it or not, the US is moving towards a more socialist setup on the back of that demographic. It has to. Sure it will go kicking and screaming as the shrinking middle class bites back by voting in anti-elitist candidates. But Trump?
Trump is really just an authoritarian carpetbagger in disguise. But that will not matter. People will vent, then be disappointed.. then project their expectations onto someone else with empty selfish rhetoric (Hillary), or worse.. terrifyingly insecure selfish action (Trump 2020).
The Market Will Fix Everything.. And it Won't Be Pretty
Market clearing events will happen one way or another. Maybe not on an your timeline. But clearing events will happen. It always ends in 1 of 3 ways. Poverty, Death, or Collapse
- POVERTY: The Baby Bust, Gen X, Gen Y, and Millennial Groups hold the bag and exist at a lower standard of living. (Zombie Existence)
- taxes, inflation, lies, and inferior standards are the methods
- DEATH: By War
- the ultimate market clearing, de-complexifying event.
- social stratification levels flatten and people are all reduced to the same thing. Humans -Fight Club post debt erasure
- SOCIETAL COLLAPSE: . In which event centralized constructs disappear and simpler but functioning entities take their place- Fight Club again
- EU- collapses, nation states re-emerge
- US- Entitlement systems don't just get worse as in 1 above. They totally break
- Emerging Markets- regress to war lords and anarchy
Rapid fire micro news is mind numbing now. As we are constantly forced to look at the little picture the world moves towards militarily driven solutions. As one Soren K. Group contributor "Bon" is saying:
Amazon economy? Netflix loses Disney? MEH. None of that matters. Just wake me when the little fat guy nukes one of our carriers. Then Ill be happy to pay attention. 'Cause that is where we are going. The VIX will stay at 7% while bombs are dropping on Seoul. Markets do not reflect risk. And we are going bankrupt unless we start a war. I'm waiting to buy a spot in "Detroit by the Sea" when the war starts... NJ will be cheap then right?
Indeed, our future is increasingly looking like
- Elitist Authoritarian style socialism with lower standards of living and lots of small wars, or
- Populist Authoritarian Dictatorial "Capitalism" which will drive us to one big war
And so, take note of Venezuela... Detroit's cousin to the South. Then look at IL, CT, and NJ. What we call entitlement programs are really socialist programs. Or just nuke North Korea, Iran, and the Saudis Michael Corleone style.
BEAUTY AND THE BEAST - Venezuela is our Newest Dictatorship
"Venezuela always has all the superlatives. It's the world's highest inflation by a lot. It's the world's highest murder rate. A lot of economists will tell you it's the most mismanaged economy in the world. And now, a lot of people are saying the world's most recently born dictatorship. But when I went down there, it was a great place to live, which sounds crazy now, but it's beautiful." A reporter who has been covering Venezuela describes what's it like to see a democracy destroyed? "Things can always get worse and worse and worse, and there's no rule that says that a miserable situation has to end, just because it's too miserable." (Even Radiohead lyrics got depressed by that line...)
+ "Fugitive Venezuelan soldiers have declared a rebellion against 'the murderous tyranny' of the president. Dissident officers have fled the country, seeking asylum. Grenades have been fired at the Supreme Court and, this weekend, assailants under the command of a mutinous captain attacked an army base, making off with weapons." From the NYT: As Maduro's Venezuela Rips Apart, So Does His Military.
+ "Since Venezuela's economy began to melt down in 2014, violence, triple-digit inflation, and shortages of food and medicine have caused hundreds of thousands of people to flee in the ways available to them. Elites have obtained U.S. visas and left for Miami. Those in the middle class have escaped by plane to places such as Buenos Aires. The poor have walked across the border to Colombian cities. But there is no refugee flow quite like that of the Warao to Manaus." From BusinessWeek: Forced Into the City After 9,000 Years in the Jungle.
Demographically Driven Banana Republic or Nuclear War ?
We are on an economic Venezuelan path but few see the emperor's creeping nakedness yet. A generation that was the peak of capitalistic success (excess) in terms of stock valuations will next sound the siren for more socialist policies. And that is not necessarily a bad thing. Problem is we've saved nothing in the good times to prepare for it.
Worse, those that did try to save were robbed by the Fed and other trickle up policy tools. And those people need the kind of help that capitalism won't provide in its current US form short of soylent green.
Failed Democratic Socialist policies de-evolve into dictatorships as the need to use force increases. That is Venezuela now. Failed Capitalistic Democracies..... same thing. Difference here is we replace Capitalism (true capitalism does not exist in the US now) slowly with Socialism to appease the have-nots.. and then we fail.
Or we could just have a bigger external war while we still can. Venezuela does not have that choice.