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Sunday, September 29, 2019

The clueless and short-sighted elite

Peter Turchin explains that the US elite is working off of inaccurate and misleading social models:
Last year I had an interesting conversation with someone I’ll call the Washington Insider. She asked me why my structural-demographic model predicted rising instability in the USA, probably peaking with a major outbreak of political violence in the 2020s. I started giving the explanation based on the three main forces: popular immiseration, intra-elite competition, and state fragility. But I didn’t get far because she asked me, what immiseration? What are you talking about? We’ve never lived better than today. Global poverty is declining, child mortality is declining, violence is declining. We have access to the level of technology that is miraculous compared to what previous generations had. Just look at the massive data gathered together by Max Rosen, or read Steven Pinker’s books to be impressed with how good things are.

There are three biases that help sustain this rosy view. First, the focus on global issues. But the decrease of poverty in China (which is what drives declining global poverty, because Chinese population is so huge), or the drop in child mortality in Africa, is irrelevant to the working America. People everywhere compare themselves not to some distant places, but to the standard of living they experienced in their parents home. And the majority of American population sees that in many important ways they are worse off than their parents (as we will see below).

Second, the Washington Insider talks to other members of the 1 percent, and to some in the top 10 percent. The top-income segments of the American population have done fabulously in the last decades, thank you very much.

Third, many economic statistics have to be taken with a grain of salt. Government agencies are often under substantial political pressure to put a positive spin on the statistics they publish. Many economists work hard to please the economic elites and other powers-that-be, because that’s how you get ahead in that profession. Fortunately, there are enough “heterodox” economists who provide us with alternative views. This all doesn’t mean that statistics are worse than “damn lies”; on the contrary, one cannot make sense about where we are headed without statistics. The point here is that one needs to understand why different statistics may give us different answers.
This is more than a little reminiscent of the Boomer cluelessness that simply can't grasp the significance of a rise in tuition from 500/semester to 15,000/semester when wages have not risen. Not a single American cares about the rising Chinese standard of living when his own has declined, and declined significantly in comparison with his parents.

What we've witnessed over the last 50 years is the mass transfer of American wealth and property title from the middle classes to the elite of the US elite. These indicates that revolution is coming, sooner or later, in one way or another. Right now, the average citizen is content with Taco Bell and Netflix... but Netflix is becoming less entertaining with every season that passes.

The problem, of course, is one of labor oversupply.

The American economy has been operating under the conditions of labor oversupply since roughly the 1970s. The main causes were immigration, the entry of massive numbers of baby boomers and women into the labor force, the export of jobs overseas.
- Peter Turchin

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71 Comments:

Blogger Azimus September 29, 2019 6:29 AM  

The poor need a helping hand.
The working class need opportunity.
The middle class need to be left alone.
The rich need to be watched.

Blogger Brett baker September 29, 2019 6:41 AM  

But "muh wammen's happiness!"

Blogger Kari Hall September 29, 2019 7:00 AM  

Vox, where or how do you find all of this wealth of wonderful sites? I've listen to and read Mr.Turchin before but did not know about the blog. It is marked and will be read routinely as with yours. I pray whomever Mr. Turchin was speaking to is smart enough to start looking deeper, but we know that is unlikely. Thank you again.

Blogger Mr.MantraMan September 29, 2019 7:01 AM  

It shows you what they think of their base of SJW and black Americans, never mind the nearly invisible Hispanics. Think of the trillions of Fed Bucks it must take to convince the above three groups that the Handmaid Tales, Colin Kapernick and Baby Cages are the three boogeywhitedevil monsters that require them to vote for a rich oligarch fellating .001% elitist politician.

Blogger The Lab Manager September 29, 2019 7:01 AM  

According to libertardian economics, oversupply in labor always great. Immigration? Hey, importing low IQ criminally prone Africans and Central Americans is good for profit and 'muh cheap labor' is a good in and of itself. Who cares if communities are destroyed?

Blogger Rakshasa September 29, 2019 7:20 AM  

The problem isn't labor oversupply, it's small brain labor oversupply.

Decades of high birthrates amongst low-iq people, supported by the labor of the high-iq segment, has put us on a demographic decline only matched by immigration.

Plant more seeds.

Blogger Don't Call Me Len September 29, 2019 7:34 AM  

We have access to the level of technology that is miraculous compared to what previous generations had.

Sure, most "entertainment" has turned into lectures on how stupid, hateful and useless you plebes are, but look at that amazing resolution! And you can blow off steam built up from noticing how your life sucks by hunting dopamine hits from total strangers on your phone! Ain't technology grand?

Blogger Lovekraft September 29, 2019 7:36 AM  

There has been a noticeable shift in only the past ten years from 'all immigrants are welcome, diversity is our strength' to 'you don't want to move to that neighborhood.'

As far as who is behind this, what I see as the primary beneficiaries of the modern mass immigration angle is Islam. Part of their caliphate-expansion campaign can be attributed to ME meddling (around, say 20%), but the current reality can only lead to the conclusion that they are benefiting from whatever schemes they hatched.

So let's say it isn't Islam, but forces behind it, the fact is that a tenuous diverse society that introduces Islam in significant numbers changes the dynamic significantly. Much more resentment, anxiety etc. Walk into a prominently Muslim market area and you leave with a sense that you just encountered foreign soldiers wearing their 'citizen' mask.

Blogger The Cooler September 29, 2019 7:45 AM  

The problem isn't labor oversupply

Yes, it is. The general oversupply precedes the particulars. Importing nothing but 3SD's would be just as bad as what is happening now, from an economic perspective.

In a relatively closed -- i.e. nation-oriented -- economic system, ratio dynamics take care of themselves; there is an organic interplay that serves to create supply such that general oversupply and the particular oversupplies that follow are all but impossible, in the sense that they are far more available to self-correction.

Sure, most "entertainment" has turned into lectures on how stupid, hateful and useless you plebes are, but look at that amazing resolution!

IsmIstPhobia, now in 8K HD.

Blogger cecilhenry September 29, 2019 7:48 AM  



Is it really plausible that the leaders of dozens of White nations have adopted similar policies antithetical to the long-term survival of their own peoples, yet none of them know what they are doing?




Ride the bus Justin and others. Ride the damn bus.

Endlessly.


Every politician, bureaucratic and anti-White promoter should be made to ride the bus.... forever

https://www.youtube.com/watch?v=AqyHJgcKbyk

Blogger Doktor Jeep September 29, 2019 7:52 AM  

So boomernomics, generally.

Blogger Steb September 29, 2019 7:58 AM  

The new focus on tackling homegrown extremism, despite it not really existing in any significant way, shows that at least some Washington insiders have seen the writing on the wall.

They're not responding to current extremists as much as preparing for new ones that they know will be soon appearing.

Blogger urthshu September 29, 2019 8:17 AM  

Revolution is what they have been aiming for, though. There's already a trained cadre of Communists at all levels including street level.

Blogger swiftfoxmark2 September 29, 2019 8:30 AM  

And let's not forget that the only way for anyone in the middle class to buy a house, they have take a zero-down mortgage and be slaves to the bank for 30 years.

Because when getting merely 20% of a downpayment on a home is 2/3 of median household income, that's a serious problem.

Blogger ZhukovG September 29, 2019 8:50 AM  

I would rather live in a Communist country, where my Nation is dominant, than a Libertarian Multi-Cultural hell hole.

Communism makes you poor, Globalism makes you dead.

Blogger Zaklog the Great September 29, 2019 8:59 AM  

@1 The poor need a helping hand.
The working class need opportunity.


The problem is that merely handing people money is not a good long-term plan for helping them. People who get money merely for breathing don't flourish. Genuinely helping people is difficult and complicated.

Blogger Zaklog the Great September 29, 2019 9:00 AM  

@14 And let's not forget that the only way for anyone in the middle class to buy a house, they have take a zero-down mortgage and be slaves to the bank for 30 years.

Well this sounds dreadfully familiar.

Blogger Blunt Force September 29, 2019 9:10 AM  

Left: Death to America. Open borders for all.

Right: Save our Republic. Stop the invasion.

Conservative : Muh wife's son.

Blogger Damelon Brinn September 29, 2019 9:11 AM  

"We have access to the level of technology that is miraculous compared to what previous generations had."

I'm starting to think there are two types of people: those who actually benefit from modern technology, and those who just think they do. It's certainly given many of us time-saving conveniences, but there's a tradeoff that goes mostly unnoticed.

Blogger JG September 29, 2019 9:17 AM  

Take a look at the percentage of wealth owned by the top 1% over time. That percentage had steadily declined until 1972, the year after Nixon took the US off the gold standard. The percentage owned by the top 1% has increased since then. The elite have vastly benefited from that change, so they don't see the misery of an entire generation of usury slaves created by the feral colleges and their government backers.

Payback is going to be brutal.

Blogger Hieroglyph September 29, 2019 9:23 AM  

Boomerflation. It's a thing. It's the figure you get when you take actual inflation, and have it interpreted by Boomers.

See also: Boomernomics.

Blogger pnq87 September 29, 2019 9:24 AM  

https://youtu.be/gbRq2eUYymg

Blogger Stilicho September 29, 2019 9:51 AM  

Judeo-libertarian economics is, in the end result, indistinguishable from Judeo-socialist economics.

With apologies to the Pythons: Usurious tarts distributing loans is no basis for an economic system.

Blogger Homesteader September 29, 2019 9:55 AM  

Normalcy Biasis is one of the many congnitive flaws humans possess- doubly so when things are good.
Linear extrapolation is another- The Black Swan ALWAYS finds your pond, eventually.

So don't expect the normie lightbulbs to start suddenly glowing.They only do post-facto, at which point they then seek scapegoats.

Prophets ALWAYS suffer for their insight.

Blogger Max Boivin September 29, 2019 10:03 AM  

It pisses me off when people talk about "all the amazing technology we're enjoying" as a proof that we live better than we did (libertarians like to point that out to prove the marvel of the free market).

Yes, we have cell phones and streaming services and flat screen TV, but we can no longer trust our neighbours, women are no longer safe in the cities, we can't send our children to public school, we can't afford houses at a reasonable distance to a urban centre, we need two salaries to raise one or to children and we can't enjoy a movie without being preached at. Are we living better than they did in the past? I don't think so.

People often make the mistake of equating how advanced a civilisation is by how advanced its technology is; this is not the correct measure of civilisation. The correct measure is how civilised the people composing this civilisation are (com'on, it's in the name). You can have all the cellphones, jet packs or teleporters you want, if you can't trust one another, if you can't stop raping your neighbours' daughter, if you murder a random guy for looking at you the wrong way, you are not civilised. A "civilisation" tolerating such behaviour is not an advanced one.

Blogger TMLutas September 29, 2019 10:25 AM  

The problem is not fundamentally one of labor oversupply. It is of an imbalance in the labor market which can be fixed one of three ways, reducing supply, increasing demand, or some mix of both. The most likely real world solution is a mix of both.

People who are currently exclusively selling their labor need to be told and told until it sinks in that the best way to improve their circumstances is to create their own business, at first a side gig, then scaling to full time employment, then hiring people.

This also has the benefit of moving the balance between things that are under your personal control and things that other do that you must endure toward the first which tends to make people psychologically healthier.

We do not have completely efficient markets in every facet of life. There are plenty of areas where you can simply buy from a source and sell at a different outlet for a higher price. A lot of manufacturers don't like to sell directly to the public. A lot of major distributors don't like to sell directly to the public.

If you are in the US, you have the ability to largely bypass Wall Street and do capital raises up to a million dollars a year which is quite handy if all you need is $10k in tools and the bank isn't impressed with your credit score. Look up title III of the JOBS act and Regulation CF if you want the details.

Blogger David Ray Milton September 29, 2019 10:27 AM  

Turchin is awesome. The only critique I have of Age Of Discord is that it didn’t have any analysis/proxies for the structural stress of diversity. Other than that, probably the most informative book i’ve read in the past year. I know we tend to say (for good reason) that dialectic is not very persuasive, but damn, try to argue with Turchin.

Children comparing their standard of living to their parents is a useful way to evaluate the plight of post-boomers. My siblings and I all make substantially higher nominal wages than my single mother did. Yet, she could afford a nice house on a spacious property to raise us on, whereas the three of us with our “nice jobs” can afford a trailer, a mediocre condo, and a small house in Appalachia, respectively.

Blogger HouellebecqGurl September 29, 2019 10:35 AM  

Women have never been "freer," or unhappier.
It's almost like they're linked.
Side note-commenter Swami on that blog and his roam about Millennial son can go DIAF.
I had to stop reading after his comment to get my BP back down.

Blogger Blunt Force September 29, 2019 10:36 AM  

@25

Civilization is merely the fruit of a homogeneous culture and faith. Imperialism is the enemy of every nation.

Tradition,faith and rule of law is the price we pay to belong to something greater than ourselves.

Blogger Out of Nod September 29, 2019 10:37 AM  

We have access to the level of technology that is miraculous compared to what previous generations had.

And yet I can't get a sandwich at Subway because their 15 year old computer crashed and takes 20 minutes reload the POS system...

Blogger HouellebecqGurl September 29, 2019 10:41 AM  

Either you replace your less educated, lower IQ workers or you pass merit based immigration and replace your high IQ professionals.
America took the jumbo suicide pill and did both.

Blogger The Cooler September 29, 2019 10:44 AM  

People often make the mistake of equating how advanced a civilisation is by how advanced its technology is; this is not the correct measure of civilisation. The correct measure is how civilised the people composing this civilisation are

Thus Art and Philosophy were, are and will always be the greater yardstick.

What (High) Art is produced in the West today? What Philosophy? We have retrogressed into a technologically advanced state of both post- and pre-civilization omnium-gatherum.

Blogger tublecane September 29, 2019 10:45 AM  

Even if they had the right social models their heads would still be in the sand because elite culture is out-of-touch in too many ways to count. I am reminded of some academic account or other of the mutiny on the Bounty, which demonstrated that Lt. Bligh was not particularly cruel by British Navy standards. Okay. But this was additionally used to argue that it couldn't have been his cruelty that ignited the mutiny. Which is ridiculous. Because Fletcher Christian wouldn't say to himself, "Yeah, he's tough, but I hear Captain Crunch is worse so I'll hang in there."

For a people obsessed with relativity when it comes to morals, they can't manage it when it comes to complex social interactions . Because you have to be intelligent to figure them out.

Blogger timothyjander September 29, 2019 10:52 AM  

Would the cited Rosen and Pinker happen to be Grabblers? (rubs his hands)

Blogger Ominous Cowherd September 29, 2019 11:00 AM  

Azimus wrote:The rich need to be watched.

The rich eventually become a problem. However virtuous and productive the first generation might be, eventually it turns into Old Money, and becomes an occult aristocracy. Once the semi-secret aristocracy is established, even the Noveau Riche like Buffet, Soros and so on ape the aristocrats and damage the nation.

Productivity that leads to great wealth is intrinsicly good, they tell us. We must cherish our rich, they tell us. I'm beginning to wonder if those are lies, like everything else they tell us.

Belloc's definition of a capitalist society in The Servile State makes distributism look like a great idea.

Blogger Ominous Cowherd September 29, 2019 11:09 AM  

ZhukovG wrote:I would rather live in a Communist country, where my Nation is dominant, than a Libertarian Multi-Cultural hell hole.

Recent experience suggests that suffering under Communism is less destructive than whatever it is the West suffers under. Our host keeps pointing out that Eastern Europe didn't get pozzed in the '60s, '70s and '80s the way the West did.

I think a big part of that was that the poz in the West was pushed by the commies in the East. The West fell for the propaganda, the Communist East didn't, because the East never turned those weapons on themselves.

Blogger Ominous Cowherd September 29, 2019 11:21 AM  

Zaklog the Great wrote:@1 The poor need a helping hand.

The working class need opportunity.


The problem is that merely handing people money is not a good long-term plan for helping them. People who get money merely for breathing don't flourish.


People whose actual need is for a helping hand aren't going to flourish, because breathing is their only skill. About 1 in 50 Whites has an IQ of 70 or below (-2sd). About 1 in 6 Blacks has an IQ of 70 or below (-1sd). The poor we will always have with us.

On a related note, imagine what your society would be like if every sixth person in it were a literal retard, and the average dude wasn't much smarter. That's Black society in America. Now imagine your society if the average dude were a literal retard and one in six had an IQ of 55 or below. That's West Africa.

Blogger Ominous Cowherd September 29, 2019 11:29 AM  

Damelon Brinn wrote:I'm starting to think there are two types of people: those who actually benefit from modern technology, and those who just think they do. It's certainly given many of us time-saving conveniences, but there's a tradeoff that goes mostly unnoticed.

To tie this into the bastion of sanity thread, people who are playing with technology aren't educating themselves. You can play ``learning games,'' you can dig up erudite articles, but until you read, digest and understand, you haven't gained a thing. Technology distracts from the essence of education.

Blogger Hammerli 280 September 29, 2019 11:47 AM  

I think there is another problem, the increasing acceptance of perpetual debt. My parents accepted that they would ALWAYS have a mortgage. Usually have a car loan. It's a mindset that works against accumulating real capital.

I'm an oddity, as I abhor debt.

Blogger Ominous Cowherd September 29, 2019 11:56 AM  

Hammerli 280 wrote:I'm an oddity, as I abhor debt.

I always ask people ``Do you want compound interest working for you, or against you?'' The answer usually boils down to ``I want what I want, and I want it now.'' The smart ones know it's stupid, but everybody's doing it ...

Blogger Bernard Brandt September 29, 2019 12:02 PM  

I ride the bus, daily. I've also done so for the last 50 years.

I've seen two communities sold down the river by the 'leets during that time: the aerospace community in LA, and the longshoremen at the Port of LA.

The first group got sold out, perhaps the finest group of scientists, engineers, mechanics, and technicians ever assembled, when the suits decided to switch from hardware to software, and decided it was cheaper to outsource to Mumbai, Kolkata, and Shanghai.

The second group is falling prey to automation at the Port. The same automation that reduced the number of dockworkers in Amsterdam from perhaps 10,000 to 200.

LaLa land is getting hollowed out. The rich 'leets infest the beach cities and the coast, while the service people swelter in overpriced crackerbox apartments inland, or in their cars.

There is a reckoning coming here. It won't be pretty when it does.

Blogger SciVo September 29, 2019 12:02 PM  

The cluelessness of the "US elite" is because it is actually a global elite, and I argue that the global elite is so interconnected within itself -- and so alienated from the rest of humanity -- that it is undergoing ethnoneogensis.

Through that lens, the entire "1619 Project" is a massive DARVO by a supremacist ethnicity that is actively oppressing the unhyphenated majority. So to make things even worse, one of the salient characteristics of this new ethnicity is a collective "cluster B" personality disorder.

The AirSpacer always cries out in pain as he strikes you.

Blogger furor kek tonicus ( that one UFC fan Owen keeps around so you can't accuse him of homophobia ) September 29, 2019 12:03 PM  

33. tublecane September 29, 2019 10:45 AM
Because Fletcher Christian wouldn't say to himself, "Yeah, he's tough, but I hear Captain Crunch is worse so I'll hang in there."



Fletcher was a neurodeviant. one has only to observe the sort of 'society' he attempted to create on Pitcairn Island to discern that.

in some ways, Bligh was superbly talented. observe his 4,000 mile navigation of an open launch. however, it is undoubtedly true that Bligh's preference for insults rather than punishments was his undoing.

Bligh never was convicted of any wrongdoing and, in fact, was rewarded for his able service several times.

Blogger DonReynolds September 29, 2019 12:15 PM  

This reminds me of the first time I received the "Worst Person in the World" award.

My undergrad was in City Planning and I worked as a planner for 15 years, at the time in a small town adjacent to a much larger city with a state university. The school did not have a program in planning but the geography department did offer a course in the subject. The professor decided it would be great to have a working planner come to the class and talk about the practice (reality) of city planning.

It was almost a riot (in 1998). The students, without exception, exploded into disgust and contempt, after being told that none of their "politically correct" solutions were even being taken seriously by working planners. WE were considered the heretics and they were the righteous, who wanted everything done the right way and for the right reasons. Who gives a darn about city budgets, when there is so much good to do? How dare we turn our backs on the ones in greatest need? Compromise with lawful authority? Certainly, the Worst Person in the World.

Blogger Roman Daoist September 29, 2019 12:17 PM  

I don't see a revolution necessarily. It could be much worse... a slow decline to deprivation. With services and civilised customs slowly peeling away.. it's not like places in the US haven't already normalised shitting in the street.

Unless there is a plan and execution of that plan for something else, then nothing else will happen.

We gotta get political.

Because 'waiting for a revolution' is a pretty piss-weak plan! :)

Blogger Azure Amaranthine September 29, 2019 12:28 PM  

"Take a look at the percentage of wealth owned by the top 1% over time. That percentage had steadily declined until 1972, the year after Nixon took the US off the gold standard. The percentage owned by the top 1% has increased since then."

Black magic system now open for business: Wizards welcome.

Blogger Azure Amaranthine September 29, 2019 12:43 PM  

"So to make things even worse, one of the salient characteristics of this new ethnicity is a collective "cluster B" personality disorder."

Shockingly, the Whore of Babylon has congenital disease.

"I don't see a revolution necessarily. It could be much worse... a slow decline to deprivation."

Slow deprivation is the supersystem. It's happening anyway. What we have is mashing together people who necessarily have more deprivation with people who have less of that type of deprivation. Revolution is necessary because they're going to separate like oil and water. The only questions are along what fault lines and who owns what land afterward.

Blogger Zaklog the Great September 29, 2019 12:43 PM  

@37
On a related note, imagine what your society would be like if every sixth person in it were a literal retard, and the average dude wasn't much smarter. That's Black society in America. Now imagine your society if the average dude were a literal retard and one in six had an IQ of 55 or below. That's West Africa.

Believe me, I have some grasp on the nature of that problem. I have no idea what the solution is, but I understand a bit about the problem.

Blogger English Tom September 29, 2019 12:45 PM  

@Cecil Henry

"Governments do not govern but merely control the machinery of government for the hidden hand, which is the real ruler."
- Benjamin Disraeli

Blogger English Tom September 29, 2019 1:04 PM  

@Zaklog

That was a very sobering vid. The old cat lady analogy re: immigration and welfare was superb.
What can be done? We all know the answer. Genocide is on the table. The only question is, who gets genocided?

Blogger justaguy September 29, 2019 1:07 PM  

Labor oversupply is obviously the main issue to most non-elite americans, though few realize it. There are many presentations that show the the US population has grown by huge numbers due to the legal and illegal immigration. There was always going to be a redistribution of wealth as technology spread throughout the world and other countries became able to compete with ours. The globalist ideal is to spread the advantages from one country to others, minimizing the nationalist elite. Even if we only had 250M instead of 325M, we would still have competition from giving our competitors the ability to compete with us instead of other avenues.

Add the IQ decrease among the new 70M+ added and a recipe for disaster. It is hard to keep our lower IQ population happy-- either competition in the country or with newly advanced countries--- lots to go through here and not much philosophy has touched it-- how to stay ahead through the ages. hint: cultural supremacy.

Blogger DonReynolds September 29, 2019 1:09 PM  

English Tom wrote:@Zaklog

That was a very sobering vid. The old cat lady analogy re: immigration and welfare was superb.

What can be done? We all know the answer. Genocide is on the table. The only question is, who gets genocided?


Whoever does it first decides. They become the last man on the lifeboat.

Blogger Zaklog the Great September 29, 2019 1:22 PM  

@50 What can be done? We all know the answer.

All I can say is that I don't want that. I don't know what can be done to avoid it, though. As you said, it increasingly looks like that's going to happen, the question is to whom?

Blogger English Tom September 29, 2019 1:26 PM  

@Zaklog

Genocide is not a nice thought. However, given the plans and utterances of the treasonous political class in the West, it is the direction we are moving in.
(See my Disraeli quote above).

Blogger Lance E September 29, 2019 1:40 PM  

I hope he gets through to some people. The technology argument is particularly infuriating, as if we are just supposed to assume that leftism is responsible for the information age because they happened at around the same time.

But the most frustrating part is that it isn't just the Washington elites, it's all of the elites; and not just the liberal elites, but nearly every mainstream conservative over age 35 (yes, even the X-ers and some millennials) who makes enough to live in relative comfort.

These folks vote for Trump, but will still swear on their mother's grave that the 1980s were the golden age of America and maybe the entire world. Some have just enough insight to say that maybe the 1950s were better, but virtually none can even rouse themselves to imagine a future based on the social arrangements prior to WWII. Disenfranchising women and pulling them out of the workforce? How absolutely horrid! Enforcing laws against sodomy? Unthinkable!

It's a sad, sad time to be alive, even for the elites and middle class, whether they realize it or not.

Blogger P Glenrothes September 29, 2019 1:41 PM  

@53, 54

I suspect the genocide will be greatest in the vicinity of oil and gold repositories.

Blogger English Tom September 29, 2019 1:49 PM  

@P Glenrothes

You could be right. I think genocide will be most likely in the vicinity of white people, especially if the mud flood continues and intensifies.

Blogger Ty Richards September 29, 2019 2:42 PM  

Jordan Peterstein pushes this garbage a lot.

Blogger map September 29, 2019 4:02 PM  

@20 got it exactly right.

https://twitter.com/RussProfessor/status/1165438713951858688/photo/1

Most of these problems started when Milton Friedman and James Tobin recommended to Richard Nixon that getting off the gold standard was a good idea. Milton Friedman thought that gold would drop to $7/oz. Instead, it went to $140. Then Volcker tried Friedman's monetarism and gold went to $900 an ounce. A veritable act of economic sabotage.

The technology argument does not wash. It's government policy that does this. In the late 40's, Gerhard Schmidt, the post-war German finance minister, lowered taxes to 10% and regulations to nothing and the German economy boomed. Meanwhile, the British maintained the wartime taxes and regulations. They had sugar rationing as late as 1955.

Blogger weka September 29, 2019 4:21 PM  

No. Go back to the mores of 1850. Franchise for property owners and the sodomites spending their time in Arabia.

Blogger DonReynolds September 29, 2019 4:29 PM  

map wrote:@20 got it exactly right.

https://twitter.com/RussProfessor/status/1165438713951858688/photo/1

Most of these problems started when Milton Friedman and James Tobin recommended to Richard Nixon that getting off the gold standard was a good idea. Milton Friedman thought that gold would drop to $7/oz. Instead, it went to $140. Then Volcker tried Friedman's monetarism and gold went to $900 an ounce. A veritable act of economic sabotage.


Nixon did not take the US off the Gold Standard. What Nixon did in August 1971 was end the gold convertibility of US dollars. Foreign countries were redeeming US dollars for gold reserves. (The nation's gold supply had been nationalized in 1934.) The US gold standard ended under FDR (in 1934) when it became illegal for Americans to own gold coin and they were required to redeem their gold into dollars at the banks and the price of gold was fixed at $35 per ounce.

No one needed to convince Nixon to end the French (and others) emptying Fort Knox with inflated dollars when the gold price had been fixed at $35 dollars per ounce for almost forty years. No, there was no inflationary adjustment of the gold price.

The British abandoned the gold standard before WWII, meaning there was no international gold standard, and that is why Breton Woods conference was put together in early 1944.

Blogger map September 29, 2019 4:43 PM  

DonReynolds wrote:Nixon did not take the US off the Gold Standard. What Nixon did in August 1971 was end the gold convertibility of US dollars. Foreign countries were redeeming US dollars for gold reserves. (The nation's gold supply had been nationalized in 1934.) The US gold standard ended under FDR (in 1934) when it became illegal for Americans to own gold coin and they were required to redeem their gold into dollars at the banks and the price of gold was fixed at $35 per ounce.

This is incorrect.

The US Federal Reserve was established to maintain a gold standard, where, initially, the value of the dollar was fixed at $20.67/oz of gold. This was maintained until 1933, when Roosevelt seized the gold supply and re-inflated the currency to $35/oz (the nature of this event is too complicated to get into here.)

This US gold standard was maintained ever since and it became the basis of the Bretton Woods system, where the US would fix the dollar to gold at $35/oz and the rest of the world would fix their currency to the dollar.

The problem was that the US was cheating on Bretton-Woods. Because of the war in Vietnam and the war on poverty, the government was demanding that the Fed inflate, while still trying to maintain the gold standard. This did not work. The French and the Spanish were the first to get wind of this so they demanded their gold back in 1965 (meaning, they exchanged their dollar deposits for gold.) Nixon closed the gold window in 1971 (meaning, the US would not exchange any dollars for gold) and Nixon went off the gold standard in 1973 (meaning, the US would no longer maintain the value of the dollar at $35/oz.)

This is where we are today.

Blogger DonReynolds September 29, 2019 5:15 PM  

@62 map
"Nixon closed the gold window in 1971 (meaning, the US would not exchange any dollars for gold) and Nixon went off the gold standard in 1973 (meaning, the US would no longer maintain the value of the dollar at $35/oz.)"

The "Nixon shock" in August 1971 was intended as a temporary measure to stop the apparent run on US gold reserves by foreign countries. The US dollar was still defined in terms of gold. The price of gold was allowed to float until December, when it was fixed again at $38 per ounce, and again allowed to float to the new fixed price of $42.22 per ounce in Fall 1973. By October 1976, the government dropped all reference to gold as the definition of a dollar. This is when any metalic standard ended and the international currencies were based on fiat money. The convertibility of dollars to gold by foreign governments was never resumed after August 1971.

When the price of gold was fixed at $35 per ounce in 1934, from $20.67, this was a devaluation of the US currency by some 40%. It was intended to attract economic activity, investment, and gold itself, to the US during the Great Depression. The Federal Reserve, that you seem to believe was created to protect the gold standard, neutralized the expansionary effect of foreign gold flows to the US economy by contracting the money supply.

Blogger map September 29, 2019 6:11 PM  

Don,

"The "Nixon shock" in August 1971 was intended as a temporary measure to stop the apparent run on US gold reserves by foreign countries. The US dollar was still defined in terms of gold. The price of gold was allowed to float until December, when it was fixed again at $38 per ounce, and again allowed to float to the new fixed price of $42.22 per ounce in Fall 1973."

You're proving my point. There was a run on US gold reserves because the US was inflating it's own currency. It had broken the Bretton-Woods agreement and was breaking the monetary standard by inflating the US dollar. People would much rather hold gold, whose value is a constant, than an inflationary currency, whose value is declining. Thus, the dollar-price of gold was rising as this exchange was taking place.

"By October 1976, the government dropped all reference to gold as the definition of a dollar. This is when any metalic standard ended and the international currencies were based on fiat money. The convertibility of dollars to gold by foreign governments was never resumed after August 1971."

This happened in '73, not '76.

https://www.youtube.com/watch?v=iRzr1QU6K1o

"When the price of gold was fixed at $35 per ounce in 1934, from $20.67, this was a devaluation of the US currency by some 40%."

Yes.

"It was intended to attract economic activity, investment, and gold itself, to the US during the Great Depression."

No. It was intended to re-capitalize the credit markets after the collapse of the US economy in the '29 crash. It did not work because Roosevelt maintained the 65% tax rate that Hoover instituted in a panic.

"The Federal Reserve, that you seem to believe was created to protect the gold standard, neutralized the expansionary effect of foreign gold flows to the US economy by contracting the money supply."

No. The Federal Reserve was charged with maintaining the gold standard of $20.67/oz. When the market crashed in 1929, the mass sell-off resulted in excess liquidity in the economy. The Fed, to maintain the purchasing power of the dollar, used the gold signal to mop up the excessive liquidity from the economy. It was tightening the money supply in the face of a market crash because, whenever money flowed into gold, the gold price increases, indicating too much liquidity, which means the Fed lowers liquidity by taking cash out of the market and adding bonds. This brings down the dollar-price of gold and maintains the value of the dollar.

Gold flowed into the US economy after this because it was a technical profit, especially since the US was still the world's biggest creditor.




Blogger eclecticme September 29, 2019 7:41 PM  

The problem is not just that the top 1 or 10% talk only to themselves. I note that the best jobs now are either govt or govt protected e.g. credentialed. Medicine is a good field. Being in the top 1% with the right school contacts and favor trading or being close to govt money with favor trading works as well.

Have you noticed the CVs of the various people involved in the swamp trying to take Trump down? Lots of top schools. Fed employment is the brass ring. How about all the money sloshing around govt?

If I read that a Philippine ferry sunk and killed 500 people I feel bad for a second and move on. If most people with govt protected jobs read that a plant just closed and laid off 5000 people they react the same way. My ex wife's family and her all work or retired from govt jobs. All but one are like that. My point is that the decision maker are oblivious or unfeeling to the damage they cause.

If green energy regs or removing tariffs put thousands out of work it just does not register with most govt protected people.

I have been reading the libs threatening to eat the rich for decades now. They never seem to follow through.

Thanks to Vox for putting me onto Michael Hudson. I am on my third book now.

Blogger dc.sunsets September 30, 2019 8:47 AM  

@5 Lab Manager: You describe "concentrated benefit, diffused costs" to a T. The Koch Bros, Walmart, et. al. profit by open borders, the costs are placed on the backs of others.

@16 Z: You highlight the difference between helping and enabling. Welfare simply enables self-destruction. The problem is that it takes a hell of a lot of hardship to make people NOT enable parents by "saving" the children. You cannot ameliorate the suffering of a child without enabling and amplifying the conditions that caused the suffering. All attempts to "help" fan the fire.

@24 Reason doesn't guide the path of the collective; the reasoning man thus harms himself by heeding his mind...at least for the years it takes for (R)eality to reassert.

@39 Hammerli: The USA left the silver and gold standard(s) because the masses wanted the post-WWII party to continue and the money-lenders knew that doing so was a necessary ingredient to pulling wealth into their own hands. An "elastic" currency made difficult comparisons-over-time. When the mass mind bottomed its bear market psychology (1974-1982 was the bottom) and began its historic rally, the demand TO LEND skyrocketed. Why? Because holding the long term debt of others was a capital gains money-tree, the gift that kept on giving.

As for "boomernomics," the notions of fiat money and precedence of debt before equity predate the post-war period. To the historically ignorant, everything is new.

If you lend Adam money (created from nowhere) so Adam can buy something, YOU own title to what Adam bought until he can pay off the loan. In a world drowning in debt, debt owners think they OWN the underlying "asset." In the case of government debt, debt holders "own" the future productive capacity of the citizenry. That's what collateralizes the loan.

The problem is, debt (as an investment asset) is INTANGIBLE. The supply-demand price system of intangible assets is NOT governed by Econ 101 models. The better system for understanding it is Prechter's Socionomics. It is pure mass psychology.

What happens when debt issuance warps the very structure-of-production of an entire world economy? It impairs capital formation, i.e., the future production on which the debts depend is crippled. We're there...in spades. Yet as long as the mass mind BELIEVES in the fad, the fashionability of borrow-to-spend [a condition revealed by insanely low interest rates (AKA high debt prices)], then this folie a plusieurs will continue.

Debt is money.
Debt in astronomical amounts was created these past 40 years, a credit inflation far larger than any ever previously recorded.
All this "moneyness" sloshing around created vast "bull market runs" in stocks, in metals, in land, in Beanie Babies and (paradoxically) in debt securities, too.

Everyone is in this matrix. If you think $1,500/oz gold isn't part of the matrix, I have a bridge to sell you. There are no means of sidestepping participation in this monetary madness, and it's monetary madness that underlies essentially all collective folly that surrounds us.

Until i rates begin to rise (and they may well skyrocket when they do, reflecting a sudden stampede to reprice debt from sky-high to less-than-dirt), we're still in Plan A.

I no longer think I have a clue what should be Plan B.

Blogger dc.sunsets September 30, 2019 9:14 AM  

@64 The Fed systematically lowered its lending rates during the deflationary period of 1930-32, so the notion that it "mopped up liquidity" is false. This was a perfect illustration of how, when too much credit/debt exists and its price begins to fall, adding credit (from the central bank) doesn't work. It amplifies the declining price of credit. Ooops.

The '20's witnessed a massive increase in credit creation, putting pressure on the peg for the dollar vs gold. 1930-32 was a period of monetary deflation as the excess CREDIT was washed out of the market via debt default. The Federal response was to fight "low prices" by artificially-created shortages, the effect of which was simply to make miserable people more miserable. Yet FDR was feted. Go figure.

Eliminating any relationship between money and something tangible (silver, which is what was RELEVANT to US citizens who could not own gold) took place in 1964. That was when the dollar domestically became fully fiat.

BTW, in technical analysis one common harbinger of trend change is underlying non-confirmations within or between related markets. The last 40-50 years of stagnation for the "masses" is a jaw-dropping scale of non-confirmation of essentially ALL asset markets. As Prechter noted, "It's all the same market." This was a recognition that the engine of it all was the Mother Of All Credit Bubbles. No known society has ever produced anything like this.

There is no historical precedent for a non-confirmation of this magnitude. We're coasting into an apogee at an altitude never before reached. The ensuing descent should be equally epic.

Blogger Dan in Georgia September 30, 2019 9:35 AM  

Wondering when China will begin reducing the population of the areas of Africa they colonize, and how will they do it. They’ve butchered their own people just to lower the population of people who are like them. What happens to people they consider to be useless eaters? I think they’ll work them to death mining gold, diamonds, lithium and put a few feet of dirt over them. They can show the UN how they care about the Earth and heal the land by planting rain forests over the mass graves.

Blogger Ominous Cowherd September 30, 2019 4:51 PM  

dc.sunsets wrote:Debt is money.

No, debt is currency. Our currency isn't money. Confusing currency with money just confuses the issues. Otherwise, I mostly agree.

Blogger map September 30, 2019 8:32 PM  

1) You wrote:

“The '20's witnessed a massive increase in credit creation, putting pressure on the peg for the dollar vs gold.”

No, this is not correct. First, what is credit creation? This is adding liquidity in the economy…that is the creation of cash as a non-interest-bearing security. The purpose of a dollar-gold peg is to use changes in the dollar-price of gold to signal when there is excessive or insufficient liquidity in the economy. Remember, gold is a constant. The change in the price of gold reflects the demand for cash, at the margin, in the economy. The 1920’s was one of the greatest periods of economic growth in US history. A massive increase in credit creation during this period would indicate a massive demand for liquidity, which means, at the margin, people would be selling gold to accumulate dollars. This is deflationary, meaning, an increase in the value of the dollar. It also means the dollar-price of gold is dropping. To get back to that level, the fed adds liquidity until the dollar-price of gold rises back to the peg. In other words, the credit supply matched the credit demand. Massive credit creation in the face of a dollar-gold peg means that the fed would be adding liquidity to maintain the gold standard.

2) You wrote:

“1930-32 was a period of monetary deflation as the excess CREDIT was washed out of the market via debt default. The Federal response was to fight "low prices" by artificially-created shortages, the effect of which was simply to make miserable people more miserable. Yet FDR was feted. Go figure.”

No. What happened was the credit markets seized…that is, they stopped functioning after the Great Depression. Again, there was no excess debt. In 1929, the US had a $103 billion economy and a $40 billion exposure to foreign debt. To accumulate money to pay back those debts, foreign entities had to sell goods in US markets. To guarantee that goods could be sold, they would usually sell them below production cost in the United States. Basically, the US was financing foreign dumping. This started popular support for tariffs, like the Ford-McCumbry and Smoot-Hawley. In 1929, the stock market was moving with every success and failure of Smoot-Hawley in Congress. The market understood that the tariff would force a default on $40 billion in international loans if it passed, because equity goes to zero during a default. Sure enough, the Smoot-Hawley passed, and the market sold off, matching and exceeding exactly the amount of loans the US had accumulated.

The act of a mass sell-off can lead to excessive liquidity in the economy if that money moves the dollar-price of gold upward. The fed would respond by removing liquidity from the economy. So…no…you would not have a monetary deflation from 30-32. Monetary deflations, like inflations, don’t happen under a gold standard. You are trying to protect the value of the currency as a unit of account.

3) You wrote:

“Eliminating any relationship between money and something tangible (silver, which is what was RELEVANT to US citizens who could not own gold) took place in 1964. That was when the dollar domestically became fully fiat.”

Well, by that meaning, the money was always fully domestically fiat since it was illegal to own gold in the US. In reality, Americans could own gold in foreign countries and foreign did nown gold in the US. It is why France and Spain asked for their gold back in 1965.

4) You wrote:

“BTW, in technical analysis one common harbinger of trend change is underlying non-confirmations within or between related markets.”

Yes, this is known as a failure swing.

5) You wrote:

“The last 40-50 years of stagnation for the "masses" is a jaw-dropping scale of non-confirmation of essentially ALL asset markets. As Prechter noted, "It's all the same market." This was a recognition that the engine of it all was the Mother Of All Credit Bubbles. No known society has ever produced anything like this.”

This is the drop in productivity that happened after we got off the gold standard.

Blogger elleCrombie October 05, 2019 10:57 PM  

A 20% down payment on a middle class house is a bit more than 3/4 of my household income. There's no way we could save up 20% in a reasonable time. We're hoping to get a "first time homebuyers grant" and aim for 5-10% down. I'm completely stuck in the system, but I see mortgaging to a house to be the best option if I want animals, a garden, etc.
(And while the down payment is difficult, the mortgage payments here are much less than renting a house)

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