Wealth – Page 4 – Wilder, Wealthy, and Wise

The More Things Change, The More They Stay The Same

“That’s them! They knocked us out and stole our space suits!” – Dude, Where’s My Car?

How does a crab cross the street? It uses a sidewalk.

The future isn’t what it used to be.

Going back in time, the future as envisioned by the 50s, 60s, and even the 70s was pretty cool. There were flying cars, jetpacks, and a world that was cleaner and more convenient filled with abundant energy that would be too cheap to meter – and humanity would soon be headed outward to the planets, at the very least. I believe that’s because that’s where the hot alien women in bikini space suits are kept.

That didn’t happen, or at least hasn’t happened yet. Pa Wilder was born after World War I, but still within spitting distance of the first time people flew in the rickety plane that Orville and Wilber tossed together. By the time he finished his government-funded all-expenses-paid European vacation in 1945, jet engines had already screamed over Europe, ballistic missiles had crossed into space on their way toward delivering urgent packages to London.

Jet airliners and satellites followed, and before Pa Wilder hit fifty, man was walking on the Moon.

And his favorite eel? That’s a moray.

Amazing progress, by any stretch of the imagination. But what (at the individual level) has changed since, say, 1981?

Let’s put computers aside (for a moment). I know that’s like wanting to talk about the life of O.J. Simpson but just skip that one little detail. Life in 2024 would be utterly comprehensible to Pa Wilder of 1981, especially if he never looked at a cellphone or a tablet or a computer.

The big advances in basic applied engineering seemed to stop around 1970. Heck, in some ways, they’ve regressed – it’s not really possible to get on an SST and jet to London in a few hours going faster than the speed of sound unless you’re in the .mil club. We’re also tinkering with going back to the Moon, but seemed to have lost the directions since Buzz Aldrin left them in his other spacesuit.

“I am Buzz Aldrin, I’ve been on the Moon. Neil before me!”

One of the reasons that progress in a lot of conventional technology has slowed down or stopped is that progress is always easiest at the front end. The Wright Flyer? It sucked. But after flight was proven, people lined up to improve it. Radio? It sucked, too, just dots and dashes until AM and then FM were plucked (by very smart people) from the aether, leading also to television in very short order.

Unfortunately, television also led to The View and Keeping Up With the Kardashians, so there’s at least some argument that Philo T. Farnsworth could be held liable for war crimes.

The biggest and most important refinements to a new technology often come soonest.

But that’s not the only reason technological development slows. Nowadays, experimenting has become too hard because failure is no longer an acceptable outcome. A prime example of this is Elon Musk’s SpaceX® versus NASA. Elon makes more progress in an “old” field in a month than NASA does in a year because he watches things blow up and smiles because he knows that his team will have learned something new about why stuff broke.

Space is hard, but it’s a thousand times harder if you have to continually guess what will go wrong rather than test, and that slows progress. Nuclear power may be an exception here, since we only need so many Godzillas® and Gameras™ to fight off dangerous kaiju, like Michelle Obama or Amy Schumer.

What do you find between Godzilla’s toes? Slow Japanese people.

As I mentioned, Pa Wilder of 1981 would be quite comfy and unsurprised by the world of 2024 with the exception of information technology and telecommunications, which, aside from financial shenanigans, has received the greatest amount of investment of any single industry since 1981.

What would the biggest changes be for him?

Well, duh, computers, telecommunications, and their influence on the world.

It has transformed businesses in fundamental ways. Walmart®’s secret sauce wasn’t just cheap Chinese merchandise – nope. It was also the information tech that allowed them to manage the purchasing and logistics of a business with a supply chain that spanned multiple continents. The time was ready for that particular innovation: if it hadn’t been Walmart©, it would have been some other company.

You can get Batman® shampoo at our Walmart©, but not conditioner Gordon.

Pa Wilder would not be very comfortable with the pace of social media. Also, I think that he would be very, very concerned with the advances in Artificial Intelligence, but enough about the chairman of the Federal Reserve®.

Pa was the president of a very small farm bank as computer terminals began to replace the paper ledgers that they used to track accounts, so he was familiar the changes that he was seeing in banking that in, but taking it from that level to the idea of “all the information anywhere, immediately available” was never something he quite got. Of course, it probably didn’t help that he used a 28.8kb modem and there were only something like 24 lines(!) from his county to the AT&T© office the next county over.

Yes. 28 lines. It wasn’t like everybody would be calling all at once, right? That was, however, the time that we ran for the phone in my house, since calls were rare, and you really wanted to see who it was. Now? I have the data equivalent of 10,000 old phone lines coming to my house.

We certainly don’t have jetpacks or flying cars, but we do have an information explosion that is unparalleled in history. That being said, we’re probably pretty near the limits for conventional computing power based on the limits of physics and energy density, and I’m not sure that quantum computing isn’t just a meme.

Is the next big field genetics?

What do you get when you cross a duck and a pig? A media exposé about the lack of ethics in genetic engineering.

Advances in things like CRISPR and genomic sequencing have come about because of the advances in information processing, and we are, perhaps, at the cusp of the A.I. world where things could get very, very interesting indeed in just a few years. Maybe the scientists and A.I. working together with CRISPR can even find a way to turn plant matter into protein. You know, like a chicken.

Or maybe they’ll finally locate the hot alien women in bikini space suits?

Forbidden Science: I.Q. And The Industrial Revolution

“For going against his forbidden rules of old!” – The Mist

Are protestants in love otherwise known as Popeless romantics?

I’m going to start off with a happy note, Concerned American, from Western Rifle Shooters Association isn’t done, and he’s up over at Cold Fury (LINK) until he gets things ironed out at his normal place (LINK) which is up periodically.

Last Monday when talking about Forbidden Science, I included the following paragraphs:

The Soviets started a fox breeding program to try to understand the interplay of genetics and behavior. Within six generations, there were foxes that actually liked people and wagged their tails. Now, this program is some 50 generations in, and the foxes actually seek people, and, though still foxes, behave and act like dogs.

The aboriginals in Australia were separated from the rest of humanity (mostly) for 2500 generations. It has been 101 generations since the birth of Christ, so imagine how living in cities has changed us from what we were? In Great Britain, virtually all of the poor people living 500 years ago died out due to economic selection, and the vast majority of folks are descended from the aristocracy.

I was questioned in the comments about the very last sentence, so I wanted to put it into context by making sure the rest of the “stuff” was around it, because the conclusion that comes from this is yet more Forbidden Science.

Do these genes make me look fat?

How do I know this? The book in question is A Farewell to Alms: A Brief Economic History of the World by Gregory Clark. How do I know that it’s Forbidden Science?

Despite many news articles at the time, it took a bit of searching to find the source – as the joke goes, where’s the best place to hide a body? On the third page of Google® results. (FYI, I don’t actually use Google™ since they censor me) After a bit, I finally found it.
On the Wikipedia® page about the book, there’s almost three times as much content attacking the book and the author as there is a description of the thesis of the book. There’s a line here about protesting too much . . . .

Since it’s Forbidden, Clark’s basic idea is this:

Back before the industrial revolution hit, Great Britain had no real safety nets for the poor. Have too many kids so you can’t feed them all? Guess you’d better start picking favorites. In real terms, however, if someone was poor, they were more likely to get sick.

But this man clearly plays bass.

Why? The food wasn’t as nutritious or plentiful for a poor person, same as forever. Houses (if they even had one) were cold and often filthy, unless they were too poor to even be able to afford filth.

I remember driving through some city with The Mrs. once, and I said, “Well, this would be a nice place to live, if you were rich.” The Mrs. responded to my stupid comment like a pit bull on a toddler: “John, any place is nice to live if you’re rich.”

Without a social safety net, everyplace sucks if you’re poor. Great Britain was no exception. There are, however, implications and consequences to being poor. The poor were less likely to marry – many bloodlines just evaporated because the men and women were too miserable or had such bad hygiene that they couldn’t get together and get it on.

The poor also die earlier before they have as many kids, and if they die earlier, their kids are maybe out of luck, since they can’t be sold into medical experimentation because medicine then consisted of bloodletting.

If you eat Ramen with ketchup for sauce, it tastes just like poverty.

So, the poor don’t have as many kids. But the poor kids also die more often. This isn’t the world of 2024 where we encourage poverty by subsidizing it, so pre-industrial Great Britain is the exact opposite of the movie Idiocracy: the rich and the successful have more kids and start replacing the poor people who didn’t show up. Thus, the poor that remain are getting smarter.

While being rich is not perfectly correlated to being smart, it’s close. It’s also not perfectly correlated to greater degrees of the ability to defer pleasure, but it’s close. The Stanford marshmallow experiment was a test where kids were brought in and offered one marshmallow now, but if they could wait 15 minutes, they’d get two marshmallows. Those who could wait had better SAT scores, education and income later in life. And, we all know the difference between camping and being homeless: marshmallows.

Crimes were also punished much more severely compared to today – and (unless you were on the wrong side of Henry VIII) most of them weren’t political, but were for theft. Yup, one estimate is that 70% plus of executions were for theft. And although the numbers were only 200 a year out of a population of 8,000,000 or so million (think 1770s) the children of those people didn’t show up, because they were never born.

If Henry VIII had invented the airplane, he would have been an alti-Tudor.

Up until the Industrial Revolution changed the game, the social pressures in Great Britain favored an increase in intelligence, and an increase in civilized behaviors. It’s very likely that these civilizational pressures made the Industrial Revolution possible by helping people in Great Britain become clever enough to start it.

The Industrial Revolution started to improve the lives of everyone in Great Britain, and the (now smarter) poor didn’t die so often, even after they were fired from clock factories for putting all those extra hours in.

As these pressures disappear, there is strong idea that IQ can go down. It looks like the world (and the United States) is in the midst of a reverse Flynn effect (LINK). To put it bluntly, we are very likely in the midst of the plot of Idiocracy. So, remember, Brawndo® has what plants crave!

Thanks for asking the question, and I hope this covered it.

Forbidden Economics: The GloboLeft Versus The Good

“Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium.” – Fight Club

My neighbor has had a bad financial crisis. He has to drive a car without a top and his car doesn’t have a roof.

Monday’s post was about Forbidden Science. These are inconvenient truths that simply don’t fit into the ideology of a GloboLeftist. In the tradition of the very best GloboLeftists, whenever this inconvenient set of facts conflicts with their ideology, they do what rational people have always done – they consult how the facts disagree with their ideology and change their positions. Nah, just kidding. Instead GloboLeftists ignore them and stick their fingers in their ears and yell loudly “I’m not listening to you! I’m not listening to you! I’m not listening to you!”

Wednesday is the day I typically post about economics and related issues, so what better topic than Forbidden Economics? Just like on Monday, I’ll start with things that the GloboLeft actually believes and then make fun of them, primarily because they deserve it.

Me? I say bring back the positive power of bullying.

I was a bully to this orphan kid in school. I mean, it wasn’t like he was going to tell his parents.

GloboLeftists believe that Modern Monetary Theory isn’t just made-up justification for “I spend what I want”.

Modern Monetary Theory (MMT) has quietly taken the place of any sort of rational thinking. When I first wrote about it, it seemed so fringe and tongue in cheek that I was shocked anyone smarter than AOC would fall for it. I know, I know, that leaves about 85% of the country, but the GloboLeft has willingly and enthusiastically embraced MMT.

What is MMT? It’s the theory that, since money is entirely made up in the first place, that it doesn’t matter how much you print. Yes, you read that correctly. The idea is that money is like points in a football game. When a team scores a touchdown, there aren’t some vat of points that are decreased to add points to that team’s score. Instead, they’re made up. The limit to the number of points that can be scored in a game is based entirely on the productivity of the teams.

If we reset to zero every day and all played NFL® football, well, that might make sense. In MMT, the idea is that extra cash is just soaked up via taxation rather than the game ending.

What happens when the score keeps going up from game to game.

But the GloboLeftElite really, really don’t like to be taxed. As much as Warren Buffett complains that he’s not taxed enough, the one thing Warren never, ever does is send more than he owes in taxes in voluntarily. In fact, he has fleets of lawyers working every angle possible so that he pays the least amount in taxes possible. (Note: If Donald Trump were to try this he would be tried for felony tax evasion.)

There are two types of people in this world: Those who can find an answer through simple deduction.

This is not a new thing. It really started under W., and has continued through Obama, Trump, and Biden.

But what could go wrong?

GloboLeftists believe that women are cheated in the workplace, earning less than men.

I’ll start by reminding everyone that GloboLeftists don’t even know what a woman is, to the point that a sitting Supreme Court Justice was unable to define what a woman was during her Senate confirmation hearings, and sits on the Supreme Court.

However . . .

The reality is that women actually make more than men when their wages are controlled for things like, oh, career choice, amount of overtime put in, time taken off to have children, et cetera. The idea is so simplistic in that it takes everyone, puts them in a bag, and says that the average man makes X, and the average woman makes 0.8X.

Yes. That’s true. But when I went to a college graduation several years ago and they called out the engineers, 90% plus were men in some fields, and in no engineering field were women even close to a majority.

And they both give sound advice.

I wonder if that could be partially a reason for a pay difference?

Nah. Sexism is easier, and if people will swallow MMT, they’ll swallow anything. I mean, we already knew that about Kamala.

GloboLeftists believe that increasing a labor supply won’t decrease wages.

Immigration is an amazing source of brain rot for GloboLeftists. They think that bringing in hordes of illegal aliens won’t drop the price of unskilled labor. Now, not for one minute do I believe that’s the case, and neither do the people (the GloboLeftElite) that are feeding those thoughts to the rank and file.

But lower labor costs mean higher profits, so why not bring in not only illegal aliens, but tons of people on H1-B visas to take the jobs that Americans had – the number of stories of people showing up to work only to be forced to train their replacements to “earn” their severance package is so common as to be boring. It doesn’t even make the news anymore.

Yet the flip side is that they also don’t think that raising the minimum wage will have any impact on prices?

As found.

The last belief that I’m going to touch on that the GloboLeft has is this: history has nothing to teach us about the danger of an irreligious society basted in feminism and socialism.

Hey, wait, do you hear someone yelling “I’m not listening to you! I’m not listening to you! I’m not listening to you!”?

I’m sure it’s not just me. You can hear that, right?

Oh, and as a follow up to Monday’s post, here is NASA’s Administrator. He believes the far side of the Moon is always dark. Really.

Zoomers And Pools Of Cash

“The pools of blood that have collected, you’ve got to soak that up. Now, Jimmie, we need to raid your linen closet.” – Pulp Fiction

How do you drown a programmer? Put up a sign that says, “no swimming”.

If I were to come up with a metaphor for today’s situation, well, it might be this . . .

While I was half asleep this morning I visualized in that gauzy dreamy sort of way, dark pools, sitting quietly behind a large earthen structure. At first, the surfaces of the pools were smooth and reflective like glass as they slowly filled.

It was calm, and serene. For now. But the level was coming up.

What was the defining moment of my generation in our youth? Probably the fall of the Berlin Wall. I can still remember the news stories piling up day by day as the Soviet Union and Warsaw Pact nations slowly turned away from communism and then someone said the Berlin Wall didn’t match the Iron Curtains, so, it had to go. What a time to be alive! Heck, women were still winning women’s swim meets!

If I were born a bit earlier, it would probably would have been the Iranian Hostage Crisis, or Carter’s Stagflation, both of which led to Reagan’s election and eventual conversion to MechaReagan®, who fought Godzilla® and Mothra™. But that’s another story.

Anyway, think about those defining moments, the defining events of Gen Z are still out there, and I wonder what that would be. In the case of the fall of the Berlin Wall, it was a story that, at the time, was filled with hope. Here was the collapse of a political system bent on the forceful subjugation of humanity. What’s not to celebrate?

What was the favorite song of East Germans before the Berlin Wall came down? “Under Prussia”

In the end, though, what was lost in that moment was restraint. Just like Gingrich restrained the worst (political!) impulses of Bill Clinton (“What, I can’t spend what I want to spend because of the way the bond market might react?”), the Soviet Union constrained the worst impulses of the people in power in Washington. That restraint really ended with Clinton who had to fight to save his political career after lying under oath about dallying with the help.

But after Clinton, after 9-11?

Bill Clinton will be remembered for the economy. Oh, and that one other thing . . . .

All restraint fell. Oh, sure, we needed to go and find Osama Bin Laden, but did we need to invade Iraq? In hindsight, almost certainly not. Did we need to stay in Afghanistan for 20 years? Again, almost certainly not. And these adventures cost trillions of dollars, all of which we didn’t have. But that’s okay. Cash isn’t for earning. It’s for spending. Like AOC said when asked where the money would come from for one of her socialist programs: “You just pay for it!”

She was, and is, serious about this, since her understanding of cause and effect is limited to her goldfish-like memory.

But those dark pools of my dreams, they were filling. And while they filled, they began to destabilize everyone tied to the United States. In Egypt, for instance, I think they eat nothing but rice, sawdust, and the occasional house pet, which is fairly inexpensive. So, a small change in the price of rice or a decrease in the availability of sawdust causes people, real people, to go hungry.

Does Biden look like he needs more fiber in his diet to you?

As Snickers® told us, “You’re not you when you’re hungry” and hungry people are the ones that overthrow Middle Eastern despots. But that’s okay. You just pay for it.

What does the Left think about all the illegal aliens that are teeming over the border in relentless streams? You just pay for them. And you have to. Even when we’re not stacking them like cordwood in Chicago or displacing vets to house them in New York or trying to teach them to ski in Colorado, there is one horrible fact about illegal aliens:

They cost more than they create. We can’t get a volume discount if we import them by the millions. No, they just cost billions more. The net annual value of an illegal to the economy is, at minimum, -$10,000 per year. NEGATIVE $10,000, and that’s after the work they provide.

I used to worry about the collapse of the United States because of the destruction of our nation’s values and economy by illegals, but that was too scary. Now I just worry about celebrities. (meme as found)

Where does the cash come from? If you’re AOC, “You just pay for them.”

And all that “you just pay for it” is what’s filling those dark pools of my dreams.

If all that cash would just sit, quietly, in those dark pools, there really isn’t a problem. If we pay Raytheon™ for a $4 million dollar Patriot® missile to destroy $20,000 Iranian drones, as long as Raytheon© just leaves that money in their bank account, filling up the pool.

But, oops, you have to pay people to make the missile. If it’s only the Chinese who keep the money in a bank account somewhere and never use it, that’s fine, too, because that’s just another dark pool of money.

When the Fed™ started out bailing out every bank, that’s really what happened. The banks kept the cash in deposit, and salted it away in their dark pools.

I think it’s the dark pools of cash that will ultimately be the defining moment for Gen Z. Well, not the dark pools themselves, but, rather, the mess they make when the levee breaks. We’re seeing the problem starting now, and Gen Z is aware – many of them have lived their teen years seeing nothing but inflation as the pools break loose.

I’m getting tired of Gen Z, always walking around like they can afford to rent the place.

The pools are up high, and have a great deal of potential energy. The destruction the flow will create as the cash spreads down through the economy has been bad, but it will be legendary. When the American Continental was issued it was backed by the same thing the dollar is today: nothing. The phrase “not worth a Continental” was no doubt on the minds of the framers of the Constitution as they wrote that no State shall make anything but gold and silver coin a tender in payment in debts.”

But that’s quaint thought, right?

(meme as found)

Weimar Germany followed the AOC “just pay for it” formula, and German bankers eventually (after some, um, events) became the most cautious in Europe about inflation.

So, after my dream of last night, I think we have a big dam problem.

It worked so well last time, right?

Rebuilding America: First It Will Fail

Rebuilding America

“Blown up, sir!” – Stripes

Raw materials for steel have gone way up in price. Producers say it’s a horrible ore deal.

When I was in 6^th grade, I remember driving to Capital City with Pa Wilder while he had a business trip. As part of the trip, we went through Industrial Town. The major feature of Industrial Town was a miles-long hulking rusted out steel plant complete with huge towers, big enough to hold Oprah’s breakfast.

To me, they looked like the discarded remnants of an ancient technological innovation. In fact, when I was reading a novel about explorers that had gone to some far-off world that had been littered with the technology of an incomprehensible civilization, I visualized that old steel plant.

It was rare to have one-on-one time with just Pa and I. He often worked long hours, but on longer trips, sometimes we’d talk about, well, whatever. As I’ve mentioned before Pa was a banker, and I think he was more amused by my early fixation on science than anything. But when it came to the steel plant, Pa Wilder knew a lot, and that day was the first time I ever heard “Bessemer Process”, and we talked about steel and history during the drive. He said that once upon a time, you could bring your ore, make steel, and sell it for a fee. Apparently “He who smelt it, dealt it” didn’t catch on as a business model.

I hate recycling aluminum cans. It’s just soda pressing.

Bad dad jokes aside, when we drove by, that old steel mill wasn’t doing so well. The major reason, oddly, was World War II.

During World War II, the United States and Britain, mostly did everything they could to blow up anyth8ing in Germany that could make a ball bearing or paper clip. At the end of the war, the country was in ru8ins. The same thing happened in Japan – the country was wrecked, and, unlike Germany, the Japanese didn’t have many of resources needed for steel production, things like iron ore or coal.

In both cases, Germany and Japan didn’t build back with the Bessemer Process, they built back with the newest technology. Japan, especially, had to focus on being efficient since Japan has fewer natural resources to work with to make steel than Kamala Harris has for use in a battle of wits.

Once Kamala though she might be pregnant. She asked the doctor, “Is it mine?”

To be clear, it was very hard to rebuild nations shattered by the Last Modern War, but once those countries did finally rebuild, they were the most efficient and highest quality steelmakers in the world.

But this took decades.

The infrastructure had to be completely rebuilt. Then people had to learn how to make the new technology – basic oxygen steelmaking was pioneered by the Swiss and the Austrians. Oh, sure, the Austrians and Swiss are so autistic that asking a girl out is a seventeen-step process that has to be memorized prior to execution, but that’s exactly the autism level needed when you’re going to change an entire industry.

In a rare screwup, the Swiss dude who invented the process wasn’t legally able stop the Japanese from using his process for free, and the Japanese licked it up without having to pay royalties. The Swiss, experts at chocolate, hoarding gold, yodeling, and engineering. At being attorneys? Maybe not so much. 80% of Japanese steel was made using the basic oxygen process by 1970, because it was far cheaper.

Oops.

But Baltimore is gr . . . oh.

Since the United States didn’t bother to innovate, US Steel©, once the biggest steel manufacturer in the world, was sold to Nippon Steel™ for the equivalent of what Elon Musk keeps in his couch cushions back in December, 2023.

What’s the lesson here?

To be clear, in many cases our economy is where Japan’s was after World War II. There are two major differences:

It’s not as obvious because the nigh-infinite ability of the United States to print cash and trade it for things like steel is still in effect, and
We were complicit in the destruction of our own industry via free trade, regulations, and financialization, and didn’t even need to use any bombs.

To rebuild an industry requires time. It also requires a lot of investment of money, but it also requires the best talent in the country. Silicon Valley became the information systems capital of the world because it brought together capital and talent over the period of decades. Taiwan became the semiconductor capital of the world because of the capital and talent it consumed over the course of decades.

Hey, that’s what Xi said.

What did New York do? Soaked up capital to loan and soaked up talent to figure out how to magic more cash into existence – by and large a waste of decades of some of the best and brightest in the world.

This is the game that we should have been playing, but stopped when the United States was the undisputed manufacturing giant of the world. Now, the reason we were the undisputed manufacturing giant of the world was because everyone else was blown up. What did we do with that success?

Rested. Relaxed. And began to believe that the economic success was a right, not a consequence of hard work, talent, and investment.

We have to learn to build things, not financial products. But we also have things to unlearn. Our liability system is horrific, but that’s because liability lawyers fund the Democratic party, so, they buy more bacon-wrapped shrimp than others.

The other thing to unlearn is zero impact. As long as humans live on the planet, we’ll impact it – the idea is to conserve and make wise use of our resources. The GloboLeftElite have taken their mask off when climate ideologs go after the United States, with declining carbon emissions, and ignore China and India with massive and growing carbon emissions, with China producing nearly three times the CO2 of the United States.

How dare you!

But have the GloboLeftElite complain about China or India?

Nah. They wouldn’t listen anyway.

The path forward requires that we fail. Great news! We’ve failed! We’re in a worse place than the Japanese after World War II due to our cultural inertia and the newfangled “all the Zoomers have a mental disorder” society.

The second part of the path is letting go of the financialization and making PowerPoints® in New York as the goal of society. If we want to be serious, we have to make stuff, not accounting irregularities.

There’s a reason that China’s buying gold, and that reason is simple:

They’re making steel.

How Transfer Payments Might Doom Us All

“Okay. Let’s just chew our way out of here.” – Big Trouble in Little China

The Andy Griffith show would have been a lot different if her name had been Aunt Tifa.

I like thinking about the economy and what we have in front of us, and I guess I’m not alone.

Recently I stumbled across a column in Zero Hedge® that originated from Mike Shedlock at his place (link below). Shedlock has been writing about economics for years, and was pretty far out in front of the Great Recession. When Shedlock starts to tease at the threads of the economy, he just might have something interesting to say.

How Much Do Food Stamps, Social Security, and Medicare Support the Economy?

Anyway, the column that caught my eye tied back inflation to the amount of money that the government spends that it doesn’t get anything for, or transfer payments – pulling from one source (taxes or printing) to give to another person or group. The examples of this are everywhere. Shedlock mentions:

food stamps,
Taylor Swift,
Social Security,
Late night television hosts,
Medicare,
PEZ® theft,
Medicaid,
Kamala’s vodka supply,
child tax credits, and
other “welfare” payments.

Okay, I’ll admit I might have added a few things to Mike’s list.

It’s been three months since I joined the gym and I’ve had zero progress. Tomorrow I’ll go in person to see what the problem is.

During the Great COVID Crisis, first Trump and then Biden threw money at the economy, and the amount of income that people got from the government in transfer payments DOUBLED as a percentage of income. That’s staggering. This isn’t an absolute number, but as a percentage, which actually makes it worse. Not to mention all the companies that got paid for not doing business, not selling beer, and not making good movies. Disney®, I’m looking at you.

Here’s an odd sentence: Missing Person Remains Found.

Part of the trouble with the economy has been masked, for years. That trouble is Social Security. In 2018, Social Security started paying out more in benefits than it received in taxes. This was supposed to be just fine because all of the payments from past years that were put into a “trust fund”.

Well, Congress didn’t just pile all of those tax dollars it was taking in under the mattress or in a Mason® jar buried back near the old outhouse behind the Fed®. Nope. Congress did what politicians always do with every available dollar: they spent it to buy nice things (things that lobbyists wanted) immediately when they got the cash in their appetizer-covered little fingers. Oh, and they borrowed more, too. The only thing the “trust fund” did was mask the true size of the deficit.

What if your trust fund has a negative balance?

It’s like that with most things the government does, but there is a limit to how much of the economy you can just make up before reality eventually catches up with you. Ask Enron™.

Regardless, things are going to get much, much worse. All of those illegals that are streaming across the border as fast as we can pay (yes, the United States is actually paying cash to them on the road) them to get here? Once they get here, they’re being paid thousands of dollars a year plus free chow and lodging and medical care. All of that cash is just printed at this point, and spent on something that adds no net productivity to the economy.

Well, he is called Bad Luck Brian for a reason. He also invested his life savings with Bernie Madoff.

And, where, exactly are these millions of people going to live? They’re staying 30 to a house, and buying up properties that used to go to Bobby and Becky when they got married, but now can’t afford them due to the massive competition and rising interest rates.

The Boomers? They’re retiring in droves right now, and Social Security and Medicare spending will only increase as they retire. This will, of course, come from spending rather than the non-existent trust fund.

None of the above counts how much more we’ll send to Ukraine or Taiwan or Israel or Haiti.

All of these transfer payments *plus* the increased interest on the debt that we took out to buy the things the lobbyists wanted in 1994 will result in stopping Congress from spending.

Ha! See! I made it through that with a straight face. Man, I should have used that line on April Fools’ Day. Of course Congress isn’t going to stop spending. They’re not even going to slow down. There are still appetizers to be eaten, and lobbyists to be massaged.

One lobbyist even lobbied to save the penny. He called himself a change agent.

And again, Congress got away with this quite well when the United States was the Sole Global Superpower™. Now? China is pushing us economically, and from a military standpoint, it’s looking pretty iffy: no one wants to sign up to fight Russia for Ukraine, or China for Taiwan. Additionally, unless the war(s) go nuclear, I question how prepared we are to fight a near-peer foe in 2024.

Like I said, I like thinking about the future of the economy. I always have enjoyed horror movies.

Maybe It’s . . . Evil?

“But I just changed my lifetime tune about thirty minutes ago, ‘cause I know that whatever is out there tryin’ to get in is pure Evil straight from Hell. And if there is a Hell, and those sons of bitches are from it, then there has go to be a heaven, Jacob, there’s gotta be.” – From Dusk ‘til Dawn

My friend gets offended when I tell her fat jokes. I told her, “Lighten up.” (Most memes are “as-found”)

I’ve been having a bit of question in my mind about what we’re seeing going on in the world today. I’ve written quite a bit about the physical trends in the world today, with energy being the number one roadblock I see into the physical future since the complexity of the world’s economy is based on cheap energy for manufacture, transport, and use of goods in our “modern” society. That might explain why people on unicycles are always so energetic compared to me on my regular bicycle. I’m two tired.

The second big challenge I see is the virtual world. By virtual, I include not only cyber-dependence, A.I., but also cash. Our current economic system uses an entirely made-up set of markers called “dollars” to buy and sell things. What’s a dollar? Once upon a time, it was some fraction of an ounce of gold. Now, a dollar is worth whatever someone will give you for it. As Biden has adopted the Binge Bucks Better strategy to try to get votes (I mean, besides the ones they print up) the deficit has reached a record.

Hmm, if Brandon is so awesome, why is no one wearing a “Build Back Better” hat?

All this spending? There’s no end in sight. So, this is a world that is having its own set of challenges in both the physical and virtual realm.

The third and (in my opinion) most important one is the spiritual realm.

Let me digress a bit – I think it will make sense in the end, but I haven’t written the end yet, so it could just end up with all of the coherence of Kamala Harris talking about quantum mechanics. Nah, nothing could be that bad.

I was half asleep recently (hypnogogic, to be technical). I often get a “clearing of the mind” when in that state, when issues that have been perplexing me sort themselves out. It’s like my mind is running a program in the background, but when I’m half asleep, all the pieces come together.

What was this puzzle?

Let’s talk about the pieces, first:

No one, literally even the GloboLeftists in the Deep Blue cities wants the massive hordes of illegals streaming across the borders. No one. It’s so bad that Biden is even attempting to blame the Republicans for not letting him close the border.

Yeah, pull the other one, Joe, and a bell will ring.

Biden 2024! 20 years for Joe, 24 for Hunter.

This is destroying the country. Quickly. Why are housing prices going up? Because we’re not building new houses because no one can afford them but yet we’ve brought in OVER 12 MILLION ILLEGALS in just three years. If Putin could have gotten that many Russians into the Ukraine, he could have taken it without a shot.

Hmmm.

I ordered a chicken and an egg from Amazon® today. I’ll let you know.

Ever wonder if Tyson® was a company designed to import illegal aliens so they could make cheap food so people would have heart problems requiring heroic intervention to keep the medical system going?

The second datapoint is the weird fixation of the GloboLeft on literally every freak sexuality that could possibly exist. Sexually aroused by toasters? Yeah, I know that naughty bagel-sized girl is a tease, but toaster fixation is . . . deranged. The current poster child for adding deranged sexuality to avoidance of reality is the transexual movement.

The public has, at every opportunity, rejected this. Yet, Joseph Robinette Biden decided to issue a proclamation that Easter should be known as Transexual Visibility Day. To be clear, most of the time that transexuals are visible is because they’ve snapped and tried to kill a dozen people or were engaged in really awful things with children or were parading their female penis inside a woman’s dressing room. I have seen zero positive things in the news about trans people. Ever. Each time it’s some new horror story that would have led all of our ancestors look for kindling so they could have a burning at the stake.

Yet, we have a presidential proclamation on the single holiest day of Christianity promoting this abomination.

This is the Cartoon Network®. Trust them with the minds of your kid?

I could keep going. In general, there appears to be a concerted effort put forth to break down and eliminate the impact of Christianity as the basic underlying moral virtue of the West in general, including the United States.

The fall of Christianity in the United States (and the West) will have several big, negative impacts. The concepts that there is centrality of the family, the idea that life has an ultimate purpose, and the belief that all humans can be one in Christ have shaped the world. Christianity has been the central, governing moral vision at the heart of the West.

As Christianity declines, there is a risk of losing the moral foundation it provided. The decline Christianity in society accompanied by various societal issues, including divorce, cohabitation, drug abuse, abortion, homosexuality, sexually transmitted diseases, mental illness, and suicide. People are born to be religious because it gives them stability and direction.

Yet, there has been a concerted war on Christianity for years, even though it makes society observably better, and observably more stable.

San Francisco is so woke, that even the homeless vaccinate themselves!

If I were an oligarch, all of these changes would be negative for me. I’d be an oligarch over a less stable society, that produced less wealth for me to leach off of, and, in every measurable way, including the amount of power I could have, I would be worse off.

There is the first answer: because they’re just sick inside, and want to watch it all burn. Someone like George Soros may very well be like that – if you look into his eyes it’s not like you’re looking at something healthy and good. Maybe he just wants to burn it all down because he can. Because his heart is filled with hate.

That’s a simple answer. It might even be right.

This is a math teacher, so you can tell she’s plotting something.

The other answer is more profound: the GloboLeftistElite might just be . . . Evil. Capital E. It’s a solution that the modern mind wants to find an alternative to. It wants to look to cultural factors, or mental illness, or poor parenting.

Oddly, the idea that these people really are Evil is perhaps (to me) more comforting. Just like William Peter Blatty felt about his book, The Exorcist, that it was a profoundly Christian book, and uplifting, since the end showed that it wasn’t Evil that won, it was God.

Watch this, and tell me that Evil isn’t at work.

We face amazing challenges in the near future – physical, virtual, and spiritual. I’d prepare for all three.

But that’s just me.

Next up? Kamala Harris explains the General Theory of Relativity using a banana and two meatballs as props.

Economic Systems, Not Religions

“The Pagans celebrated the solstice by cutting down holly and ivy and dragging it into their homes along with a giant yule log that they’d set fire to. It sounds rubbish, but with no app store to speak of, killing trees and plants was as good as entertainment got. Even at Christmas.” – Cunk on Earth

Or, as every person forced to live in communism called him at Christmas: “Hungry Santa”.

One of the things that I have done many times over the years is note that communism (Leftism) is a religion. It’s why the joke about “Real Communism has never been tried” is funny – the people who say that actually believe it. Beyond that, they actually believe, deeply, in communism.

It’s their faith.

Just like Christians believe in Christ returning to do stuff and then give us paradise, commies really believe that when Real Communism is finally implemented, the world will be safe for losers like them.

Communism depends on the rank and file believing that they’re not the problem, everyone else is. If everyone realized what a great talent they are, well, that stupid high school quarterback would be happy to clomp back into the mines and fields and factories humming the tune the loser wrote. The loser believes that centralized processes are better: if it works for me, it should work for everyone.

Apparently, the Soviets did one thing right: they made the best bread in history. Why, people would wait in line for days just for a single piece.

So what if a few million peasants starved? That’s a small price to pay for the coming workers’ utopia. There can be no compromise in our vision of the exact same prosperity for everyone, since our vision is perfection!

Yup, that’s communism in a nutshell. It has no real empirical evidence that it could ever work, yet it gets trotted out by the losers again and again. The problem isn’t with the plan, it’s that:

The people sabotaged it!
Foreign countries sabotaged it!
The time wasn’t right!
We ran out of people to kill!
I swear, the dog ate the economy!

The result is always the same, a priestly class who aims to reeducate (convert) everyone to the religion of materialism. The end result of this – unless it’s stopped by a Stalin – is the endless Leftist Purity Spiral where there is no Leftism so far Left that it can’t be exaggerated further Left, and anyone to the right of this Left position is a heretic. As I mentioned, this was happening in the Soviet Union until Stalin just shot all the people on the far Left to stabilize the nonsense.

I was going to tell an awful bowling joke, but I’ll spare you.

One side note: I was watching the comedy Silicon Valley several years ago, and one of the characters said he followed the “left-hand path” which is a loser way of saying, “Satanist”. Just noting, Leftist, left-hand path . . . I’ll leave that there for you to draw your own conclusions.

Regardless, a lot if not all, of the problems we face in society today is due to Communism or it’s kid brother, Socialism attempting to put a central control on everything we do and think to conform to their current Narrative.

But I’d like to take a step back, since often libertarians (or Libertarians) make the same error: they equate magical powers to the market.

I remember my parents telling me, “I’ll give you something to cry about” when I was a kid. I expected a spanking, but instead they ruined the housing market.

And, yes, I’ll agree. The free market is so much better than the planned markets put together by commissars in Central People’s Warehouse No. 49, and has historically provided an abundance of “stuff”. Milton Friedman famously said, “In capitalism, goods wait for people; in socialism, people wait for good.”

It’s true. It’s also true that, just as communism is a poor religion, so is capitalism. Capitalism isn’t a religion, it isn’t a force, it has no morality, it’s a mechanism for distributing points.

Capitalism doesn’t care what it creates, as long as the points are properly distributed.

Probably the most free-market period in the history of the United States was during the frontier. Don’t want money, well, you could move out west, fend mostly for yourself, farm, and not worry (too much) about needing money. If you wanted money, you could get it by mining, trapping, killing buffalo or making railroads. Nobody stopped you doing almost anything if you were far enough out in front of civilization. But after towns sprang up?

When I was leaving home today, I had the feeling I’d forgotten something. Then I remembered. The Alamo.

Your friends and neighbors had a vote. Capitalism and free markets were constrained by morality, specifically Christianity. Was there booze? Drugs? Prostitution? Porn? Yes, those things were with us and have been with us.

But society was more cohesive at that time, and would shun the immoral, if they didn’t deal with them in extrajudicial ways. Laws weren’t required to constrain capitalism, the morality of the people constrained capitalism – actual religion took the place of economic religion.

Real capitalism isn’t a religion, and it won’t solve problems. And, yes real capitalism has been tried and is very successful when practiced by a more-or-less moral people, though the version that we have here in 2024 isn’t real capitalism. Examples?

Regulations
Taxation
Labor Laws
Federal Reserve Interest Rates
Federal Reserve Cash Printing
Welfare/Transfer Payments
Government Spending (Education, infrastructure, defense)
Unchecked Immigration

The last one is favored by many Libertarians. They note that in a market free of all of the other bullet points, well, just let anyone in. My response is that most people in the world don’t really want to be free people living in freedom: Most people in the world would just rather have free stuff.

Boeing®, putting the “final” in final approach.

That means creeping centralization and an amoral government bent on taking from one group to give to another, and the same material god that is worshipped by communists everywhere. But no one can say that the far Left is in a hurry – they keep Stalin.

You Want Dark Ages? Well, That’s How You Get Dark Ages.

“In the world I see, you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You’ll wear leather clothes that will last you the rest of your life. You’ll climb the wrist-thick kudzu vines that wrap the Sears Tower. And when you look down, you’ll see tiny figures pounding corn, laying strips of venison on the empty car pool lane of some abandoned superhighway.” – Fight Club

I had to stop working in the granite industry: it was counter productive.

Grug want break rock. Grug grab other rock, smash rock. Rock eventually breaks. Grug happy.

Another example: Grug want break rock. Grug create iron ore mine. Grug create coal mine. Grug find tree. Grug mix use coal and iron to make steel hammer. Grug smash rock. Grug happy, much faster.

Yet another example: Grug want to break rock. Grug create iron ore mine, coal mine, chemical factory. Grug find trees, sulfur. Grug make hammer, drill, and dynamite. Grug break rock real fast. Grug very happy because Grug like blow stuff up.

I stole this example from Grugwig von Mises, the Austrian economist who thought about these things a lot. The indirect way to do something is generally more efficient. It’s most direct to break a rock with a rock, but it’s much, much faster to blow the rock into gravel and you can do a lot at one time. And it’s really cool.

What sound does a piano make when it falls down an ore well? A-flat miner.

The catch, of course, is that to do things indirectly, there have to be multiple industries and infrastructure supporting the indirect method. And, if any of them fail, the method becomes more difficult, if not impossible.

One big example of indirect work in our economy is the impact of the computer and the Internet. Paul Krugman, (who is always wrong) said that the Internet would have no more economic impact than the fax machine. Of course, since Krugman is always wrong, he was wrong this time, too.

The Internet is a vast communication web, moving data about everything, everywhere, all at once. It is now pervasive, and has been for decades.

Decades?

Krugman? More like Grugman.

Yes. Back when I lived in Alaska, one of the two fiberoptic cables to Fairbanks was cut by a backhoe operator, thankfully mostly cutting Fairbanks off from Paul Krugman’s stupid ideas. What was the backhoe guy digging for?

I have no idea. Everyone in Alaska has a backhoe, a skidsteer, and a dump truck. And they were always digging. I think they might be part mole. Maybe they were digging for this:

Meme as-found.

The result of this one fiber being cut, though, was apparent very quickly: couldn’t buy gas. At all. Even with cash. Credit card usage? Nope. And I think prescriptions were similarly impacted.

Now, at work and home, I still had Internet – it was like nothing had happened since my employer must have gotten Internet from the other fiber. But it was unusual to see so much dependency – I hadn’t realized how much infrastructure was hooked up and required the Internet. In Alaska. In 2005.

The reason is that the Internet allows information to move freely. Information used to be hard to move. Now, information moves at near lightspeed in many places. It used to be the way to get information from one place to another was the most direct – mouth to ear. Then writing, probably to let someone know the sad facts about very fat their mother was, was invented, and is probably carved under half the pyramid blocks.

When I got arrested for graffiti, I tried to deny it, but the writing was on the wall.

Then, books preserved information about many fat mothers through centuries and made it much easier to share from Rome to ancient China. Finally, we have Internet pages and ebooks that share stories about maternal adiposity around the globe in an instant.

But, one funny thing – the more direct methods such as carving in stone and the ancient legends of huge hulking mothers whose buttocks block out the sky remain. But books burn. The ephemeral website? It may reach 90% of the planet yet be gone in an afternoon. Think of the deprivation of the future world of all those unsung stories of mothers whose gravitational pull could disrupt the very alignment of the planets.

What brought this to mind was that a big chunk of the Internet disappeared today. I think it’s back, but I don’t go on FaceGram™ or InstaTok©, but I think those are both back.

To be clear, those cannibal tribes in the Amazon (the river basin, not the company) didn’t even notice. Why would they? Their methods, their lives are the most direct. They don’t depend on getting ammunition for their bow from Cabela’s®, rather if they need a new arrow, they make one out of the stuff that’s lying around.

I hear Dwayne Johnson is going to star as a time traveler who has to go back to ancient Rome to steal a document from Augustus. It’s called Rock, Paper, Caesar.

The upside of this communication is that I can see first person video of drone attacks in the Ukraine within hours of a strike. The downside is that by knowing, people feel a philosophical burden – they have information about something yet are (mostly) powerless to do anything about it. Think about Michael Collins, orbiting above the Moon. He had a contingency plan if the landing had failed and Armstrong and Aldrin were lost.

“I’d go home.”

Why? There would have been nothing at all that Collins could have done. He knew that, and so did Neil and Buzz. Many things are like that, best not to obsess about them.

Our modern economy has created a great deal of leverage using cheap information combined with cheap information processing – efficient supply chains and people working in far-flung areas.

These systems, just like the chemical factories that Grug made to make his Grug dynamite to break his rock are inherently more fragile than the direct. How fragile? Back in 2017 or so, a congressional report came out that predicted that up to 90% of Americans would die in the event of an EMP taking out the power grid.

I have to remember that the rhythm is to “Staying Alive” when I do CPR, and not “For Whom The Bell Tolls”.

Knowing congress, they’ve done nothing to make the systems better, with the potential exception of trying to make EMP proof margarita machines.

I’m in hopes that the looming competency crisis, where complex systems become unreliable due to being put in the hands of the unqualified while the competent people are shuffled aside, won’t bring the take down those same systems, and with it, our society.

We’ll leave that to your mom. I hear that, though, she’s old enough that when she was a kid with Grug, there was no history class.

(Irony – I lost all Internet at my house while writing this one.)

Kardashians And The Cult Of Growth

“A future of economic growth, freedom, and happiness.” – Robocop

I had a hen who wanted to study economics. She was something of a mathemachicken.

“The economy grew at an annualized rate of 4.9% in the third quarter of 2023.”

And my response: so what?

There is a Cult of Growth in the world. In the United States, at least, that growth was literally in the DNA of the young country – there was lots of space and it was only filled with some pesky Indians who didn’t have a lot of resistance to smallpox or lead, some buffalo, no zoning, and lots of empty land to build Blockbuster Video® stores.

So, off my ancestors went. The idea was simple – fill the country from sea to sea with farms and businesses, eventually mines and mills and railroads and factories and highways. No one really planned it, and there weren’t economists reporting on unemployment figures to Rutherford B. Hayes.

What does the “B” stand for? Babebandit.

The growth that the United States experienced was amazing, and it was real. People built those farms and businesses and mines and railroads and factories and highways. That sort of growth allowed the creation of amazing wealth and prosperity because it was enduring and built upon itself. In those decades of growth, the United States experienced not diminishing returns but increasing returns as the steel mills fed the oil boom which fed the creation of the automotive industry and interstates.

Add in a few thousand nuclear weapons, and this growth of actual productivity and wealth production allowed the country to achieve tremendous national prosperity during a time of relative safety. Some would maintain that this prosperity peaked in 1973, but when you look at the relative availability of exceedingly cheap “stuff” – it was probably later than that. Perhaps a good case could be made for the 1980s when Blockbuster Videos™ roamed the land like a great majestic beast, spewing properly rewound videotapes and Raisinets® to all.

Regardless of when that exact date is, it is likely past.

Your momma is so old she rewinds Netflix® videos before logging off.

What was once achievable on a single income now requires (in many cases) two incomes. People of the past always thought that new labor-saving devices would accrue benefits to the worker, and we’d see a two- or three-day work week. Instead, we see people working more hours for less (relative) pay.

Why is that? I mean, the economy grew, right?

Yes, it did. But the way the economy grew, fueled by illegal aliens contributed to lower wages. The argument could be made that that the economic activity, the growth from these added workers helped everyone. Well, no. Illegals are certainly a net negative when everything is accounted for – welfare, roads, schools, medical care, voting GloboLeft, and Kardashian body hair.

I think she’s got so much plastic in her that if she swims it’s technically littering.

And the “growth” that we saw in many cases was the productive bit of the economy being hollowed out and shipped off overseas. Why? Because regulation increased in the United States (it never goes down) and it was easier to start and run a factory in Malasia than it is in Maine. And if iMegaCorp® can ship the factory over and increase corporate profits by 2%, they’ll do it.

Why? They’re owned by the people who make bad growth.

What’s bad growth? Well, the financial sector. It should be set up not as a casino or a place where the businesses make money selling money.

Growth is not always good. And it’s not always desirable. Let’s take an example: if I decided I wanted to gain a pound of weight next week, the healthy way to do it would be to put on a pound of muscle through exercise. But the easy way to put on a pound would be to pound some beers and milk shakes.

I believe her pronouns are HerShey.

The United States could do the same – we could increase the size of the economy by producing more and better cars or computers or flat panel displays, or bulldozers. Or, we could increase the size of the economy by ChaseCitiFargo™ charging extra fees on overdrafts and GoldmanBlackRock© buying a company, loading it up with debt that it can’t pay, and then selling it piecemeal for a 15% profit.

One of these makes a more productive society. The other is the equivalent of two people selling a house back and forth for 10% more each time and talking about all the wealth that they created.

So, not all growth is good, and not all increased profit is increased wealth. One economy can make stuff, the other just makes magical made-up profits. I’ve made the argument for some time that China’s economy is fine. It is. They know how to make stuff, so they are fundamentally more stable than the United States because the growth in China wasn’t in financial shenanigans, it was in productive stuff.

Did you know it’s illegal to water your plants in China? It causes the microphones to rust.

Does China have all sorts of debt? Yes, yes they do. Have they produced a lot of suspect crap in the past, especially for internal consumption? Yes, yes they have, and probably still do. Doesn’t matter.

Their economy isn’t based on “growth” that occurs only on paper, and only due to paper even though people smoke in China to get fresh air.

They don’t worship the Cult of Growth.

Do I want to live there? Nope.

Again, there’s good news – this system can’t last, so it won’t.

The ride, however may be bumpy . . . as we get to rebuild it – on healthy growth this time.