Thursday, November 29, 2018

America Needs a New National Strategy

A productive national Strategy would systemically decentralize power and capital rather than concentrate both in the hands of a self-serving elite.
If you ask America's well-paid punditry to define America's National Strategy, you'll most likely get the UNESCO version: America's national strategy is to support a Liberal Global Order (LGO) of global cooperation on the environment, trade, etc. and the encouragement of democracy, a liberal order that benefits all by providing global security and avenues for cooperation.
This sounds good, but it overlooks the Endless Wars (tm) and global meddling that characterize America's realpolitik dependence on force, which it applies with a ruthlessness born of America's peculiar marriage of exceptionalism and naivete.
The happy UNESCO story also overlooks the rapacious incoherence of America's political system which is ultimately nothing but the Corporatocracy's advocacy of self-interest. This system is based on the bizarre notion that private-sector corporations with revolving-doors to central state agencies lobbying for state protection of their monopolies will magically benefit the entire populace.
This absurd idea that the single-minded pursuit of maximizing private gain by any means available will magically benefit society is the essence of neofeudalism: the financial and political nobility maximize their take and justify this exploitation with airy assurances to the politically impotent debt-serfs that this systemic predation magically offers up the best possible outcome for the peasantry.
Uh, not to put too fine a point on it, but if this is the best possible world for America's peasantry, let's switch places, Mr. Financial Noble: you take my student loan debt and $30,000 a year job and I'll take your $100 million private-wealth managed accounts in tax havens around the world, your private access to politicos and the Gulfstream on the tarmac.
The no-holds-barred pursuit of self-enrichment by the Nobility is America's real-world national strategy: a system of institutionalized greed lacking any actual strategy.
America's citizenry deserves better, and the place to start is to discuss a real strategy rather than justify self-serving elites' parasitic predation as "good for everyone" via PR magic.
Let's start by distinguishing force and power. This is a key discussion in my new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic.
It’s instructive to recall Edward Luttwak’s distinction between force and power in his book The Grand Strategy of the Roman Empire: From the First Century CE to the Third where he defines force as a mechanical input (expense) that doesn't scale; it takes a lot of people, effort and treasure to force others to comply with authoritarian edicts.
Power, on the other hand, reflects the total output of the nation-state: its productive capacity, resources, human and financial capital, social mobility and cohesiveness, shared purpose--everything. Technocrats take their authority to force compliance as power, but real power attracts cooperation; it has little need for force.
Brute-force diktats to maintain a surface stability of order only increase the brittleness and fragility of the system. This is the false promise of authority: we can force stability by forcing compliance. But sustainable stability is the output of adaptability, i.e. productive disorder, not force.
A national strategy that truly benefits all the citizenry starts with a simple principle: offer a secure level playing field for innovators, innovation and capital, and let that power attract opt-in cooperation of the most productive elements on the planet.
Simple principle #2: relinquish force and seek power, as defined above. In plain language: stop trying to run the world. Lead by example: there is no way authoritarian regimes can match the output of productive people and capital who are offered a low-cost entry to a secure level playing field free of parasitic predatory elites.
Simple principle #3: define American exceptionalism as the systemic elimination of the neofeudal dominance of financial and political elites (the New Nobility). The structure to do this is simple: A productive National Strategy would systemically decentralize power and capital rather than concentrate both in the hands of a self-serving elite.
My new book on these topics is available at a 28% discount for the ebook and 23% discount for the print edition through November 30 ($4.95 ebook, $9.95 print). Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.
My new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic is 23% off ($4.95 ebook, $9.95 print): Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, J.P. B. ($5/month), for your wondrously generous pledge to this site -- I am greatly honored by your support and readership.
Thank you, Erle H. ($52), for your outstandingly generous contribution to this site -- I am greatly honored by your steadfast support and readership.

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Wednesday, November 28, 2018

Bearish on Fake Fixes

This systemic vulnerability is largely invisible, and so the inevitable contagion will surprise most observers and participants.
The conventional definition of a Bear is someone who expects stocks to decline. For those of us who are bearish on fake fixes, that definition doesn't apply: we aren't making guesses about future market gyrations (rip-your-face-off rallies, dizziness-inducing drops, boring melt-ups, etc.), we're focused on the impossibility of reforming or fixing a broken economic system.
Many observers confuse creative destruction with profoundly structural problems. The technocrat perspective views the creative disruption of existing business models by the digital-driven 4th Industrial Revolution as the core cause of rising income inequality, under-employment, the decline of low-skilled jobs, etc.--many of the problems that plague the current economy.
I get it: those disruptive consequences are real. But they aren't structural: the state-cartel system is structural, because cartels can buy political protection from competition and disruptive technologies. Just look at all the cartels that have eliminated competition: higher education, defense contractors, Big Pharma--the list is long.
The fake-fixes to the structural dominance of cartels and entrenched elites come in two flavors: political reforms that add complexity (oversight, compliance, etc.) but never threaten the insiders' skims and scams, and monetary policies such as low interest rates and unlimited liquidity that enrich the already-wealthy by funneling whatever gains are being reaped to rentiers rather than to labor.
I explain how this neofeudal economy is the inevitable result of our system in my new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic.
Our political system, dependent on campaign contributions and lobbying, is easily influenced to protect and enhance the private gains of corporations and financiers. Combine this with the gains reaped by those with access to cheap credit and you have a financial nobility ruling a class of debt-serfs.
Cartels and quasi-monopolies eliminate competition by buying start-ups and political protection, raising barriers to entry around their rentier skim. This kills innovation and productivity, which are corralled to serve existing cartels.
The wealthy own productive assets, the poor own debt. Debt accrues interest which flows to those who own the debt--student loans, auto loans, mortgages, etc.
Wages have stagnated for the bottom 80% for decades for a variety of reasons, but quantitative easing and zero real interest rates haven't fixed this structural problem--rather, they've exacerbated wealth and income inequality:
Meanwhile, the highly profitable credit machine is no longer boosting growth:rising interest saps the economy of savings and perverse incentives to borrow vast sums to buy back stocks and other unproductive uses benefit the few at the expense of the economy as a whole.
Beneath the bullish narrative of eternal growth and ever-rising profits, the financial system's buffers have been thinned. As I explain in my book, the global financial system is now hyper-coherent, meaning that instability in one corner of the system quickly spreads to the entire system.
This systemic vulnerability is largely invisible, and so the inevitable contagion will surprise most observers and participants.
A funny thing happens in a fast-spreading financial contagion: markets go bidless, meaning there's no buyers at any price. The entire global financial system rests on this one assumption: markets will always be liquid, but liquidity vanishes in contagions.
The fake-fix of the past decade is for central banks to buy impaired assets to create an artificial market. That works if you throw trillions of dollars, yuan, yen and euros into the artificial market, but that process destroys organic markets.
Fake fixes don't fix what's actually broken. They're duct tape holding together a broken system.
My new book on these topics is available at a 28% discount for the ebook and 23% discount for the print edition through November 30 ($4.95 ebook, $9.95 print). Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.
My new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic is 23% off ($4.95 ebook, $9.95 print): Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Clyde D. ($5/month), for renewing your outrageously generous pledge to this site -- I am greatly honored by your steadfast support and readership.
 
Thank you, Wendell D. ($25), for your marvelously generous contribution to this site -- I am greatly honored by your support and readership.

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Monday, November 26, 2018

The Politics of Debt-Serfs and Tax Donkeys: Our Only Choice Is the Least Bad Option

The reality is there is no avenue left for advocacy, grievances or redress in a system dominated by global corporations and self-serving political insiders.
What's striking about the protests in Paris against higher fuel taxes is the universality of the protesters' expressions of being fed up with a status quo that no longer listens to them. Their commentaries of frustration are echoed around the world, from the U.S. to China: ‘People are in the red. They can’t afford to eat’.
The basic problem is obvious: wages have stagnated while taxes, interest on debt and costs of essentials have soared. When officialdom claims the higher fuel taxes are an expression of concern for the environment, it's difficult not to gag at the hypocrisy: where are the higher taxes on the corporate and private jets, and the bunker-fuel burning freighters that ply the seas in service of globalization?
People are frustrated because debt-serfs and tax donkeys don't have any real political options: with all the political parties mere variations of a sclerotic, self-serving elite, our only choice is to either not vote at all or vote for the least bad option.
In the original version of feudalism, peasants armed with pitchforks knew where to go for redress or regime change: the feudal lord's castle on the hill. Though you won't find this in conventional narratives of the Middle Ages, peasant revolts were a common occurrence; serfs weren't always delighted to toil for their noble masters.
In the present era of corporate dominance, where can serfs go to demand redress and financial freedom from the neofeudal system? Nowhere. The global corporations that own the land and the productive assets have no castle that can be stormed; they exist in an abstract financial world of stock shares, buybacks, bonds, lobbyists and political influence.
The reality is there is no avenue left for advocacy, grievances or redress in a system dominated by global corporations and self-serving political insiders.The castle on the hill doesn't exist; it is diffused all over the planet, and well protected by state minions who listen only to neofeudal corporate interests.
The problem for well-meaning politicos is the system cannot be reformed or repaired: the cartel-state socio-economic system is now the wrong unit size and the wrong structure. As I explain my my new book, the cost of buying political influence is a small fraction of the gains reaped from buying the influence.
Mere debt-serfs and tax donkeys cannot compete with campaign contributions and influence purchased with tens of millions of dollars in cartel profits. The system isn't simply rigged to benefit insiders--it's incapable of listening to debt-serfs and tax donkeys because their demands would collapse the system.
Corporate power and self-serving insiders destroy democracy. That is the heart of neofeudalism, which is the only possible output of the status quo.
My new book on these topics is available at a 28% discount for the ebook and 23% discount for the print edition through November 30 ($4.95 ebook, $9.95 print). Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.
My new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic is 23% off ($4.95 ebook, $9.95 print): Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Clyde D. ($5/month), for renewing your outrageously generous pledge to this site -- I am greatly honored by your steadfast support and readership.
Thank you, Wendell D. ($25), for your marvelously generous contribution to this site -- I am greatly honored by your support and readership.

Read more...

Saturday, November 24, 2018

The Two Paths to Collapse

The very structure of our systems guarantees their failure once conditions change beyond their limited ability to adjust.
As a general rule, there are two paths to collapse: gradual erosion and sudden crash. The two are intertwined, of course; in most cases, the system slowly loses vigor, resources, efficiency, etc. (erosion) which leaves it so weakened that a crisis that would have easily been overcome in the past triggers a catastrophic decline of production and order.
My new book explores these system dynamics in the present: Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic. As the title suggests, we've got a window to prevent the final descent, but it's years, not decades.
There are two basic drivers of systemic erosion, drivers that have little to do with leadership or policy. Our current delusion is that changing leaders and tweaking policies are enough to stave off systemic erosion, decline and collapse, but the two dynamics cannot be so easily thwarted.
The first is the gradual decline in the system's ability to adapt to changing circumstances. Life's core asset is the ability to evolve and adapt, and organisms, species and systems which fail to adapt fast enough and effectively enough to rapid change disappear.
Today's modern complex systems are typically optimized to specific conditions, meaning that they've evolved (or been designed) to maximize production and output given a certain set of inputs and processes.
If those conditions shift outside the expected parameters, the system's efficiency and output are heavily eroded. To take a real-world example: airliners are designed to cruise at specific altitudes to maximize the efficiency of the engines and aircraft design while maximizing the cruising speed.
If an airliner is forced to fly at an altitude of 500 feet instead of 35,000 feet, the optimizations are lost.
The vast majority of modern systems are heavily optimized in ways outsiders typically can't appreciate. The delivery of gasoline to service stations, for example, appears so streamlined that few even question that system's vulnerabilities to disruption. The system of delivery is optimized to high standards of transport and availability of fuel. Were anything to disrupt this system, most gas stations would run out of fuel in a matter of days.
This vulnerability is masked by the effectiveness of the system's optimizations.
The path to sudden collapse is paved by increasingly narrow optimization. The system works perfectly until change shifts from being gradual (linear) to non-linear, at which point the apparently robust system collapses in a heap.
Adaptability and optimization are on a see-saw: as a general rule, adaptability requires flexibility, buffers and redundancies that are costly to maintain. So in a world driven by efficiencies in service of maximizing profits, these costs have been ruthlessly eliminated from complex systems. The adaptability of optimized systems is very low unless they have been specifically optimized to be highly flexible and adaptive.
The second dynamic is the gradual rigging of the system to reward insiders, at the expense of its purported purpose and output. Insiders will naturally vehemently deny this (while accepting pay raises, higher benefits and bonuses even as the agency / institution fails), but this dynamic is the direct consequence of the structure of our dominant systems, which are virtually all centralized hierarchies.
Centralized hierarchies concentrate power and wealth in the hands of the few.Self-interest being what it is, these insiders naturally rig the system to protect insiders from criticism, reductions in budgets, etc. while increasing their own take of the spoils.
We can see this in everything from corporate stock buybacks to the relentless expansion of overpaid university administrators while the actual teaching falls ever more heavily on debt-serf non-tenured poorly paid adjunct faculty.
In other words, the very structure of our systems guarantees their failure once conditions change beyond their limited ability to adjust. We already see the consequences of these two systemic dynamics everywhere in America: systems no longer function effectively even as insiders continue to benefit at the expense of the public /patients / customers /taxpayers.
To avoid decline and collapse, we need to develop new localized structures optimized for resilience and adaptability--a flexible, decentralized, sustainable, democratic, opportunity-for-all nation.
My new book on these topics is available at a 28% discount for the ebook and 23% discount for the print edition through November 30 ($4.95 ebook, $9.95 print). Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.
My new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic is 23% off ($4.95 ebook, $9.95 print): Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Glenn T. ($10/month), for your outrageously generous pledge to this site -- I am greatly honored by your steadfast support and readership.
 
Thank you, Francois B. ($5/month), for your marvelously generous pledge to this site -- I am greatly honored by your support and readership.

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Thursday, November 22, 2018

Thanksgiving 2018: A Few of the Many Things I'm Grateful For

Lots to be grateful for.
Of the many things I'm grateful for, the most important are: after 50 years of work I still have my health and more work than I know what to do with; good friends; family; freedom, opportunity, the good fortune that a few of the many stupidly high-risk bets I've made actually paid off, and I have a garden and a library. ("The man who has a garden and a library has everything." Cicero)
It's a worthy exercise to list a few everyday things we appreciate:
1. My readers, correspondents, patrons and financial supporters: Of Two Minds exists because of you.
2. Everyone who supports independent thinkers and creators. On behalf of every independent creator of content, thank you.
3. Everyone who serves the public and maintains a friendly attitude despite the difficulties of their job and a general lack of appreciation. I've been there behind the counter, and I thank you for your service and positive attitude.
4. Opportunity. Life requires decisions, trade-offs, sacrifices and adaptation when things are no longer working. A reader who managed to extricate himself years ago from an oppressive, dictatorial regime and make his way to the U.S. submitted this comment a decade ago:
We live a very simple and happy life. It is amazing to see how most Americans do not have a clue of the unlimited opportunities we all have here. Most people want 'instant gratification' and they are not willing to sacrifice to get what they want, instead they choose to live above their means and go into debt for the rest of their lives.
5. Being average or below-average. It's really OK to be average, or even less-than-average, as in slow and untalented. Why? Because if you manage through discipline and effort to work up to average, you will have achieved far more than the talent-blessed individual or child of the elite who achieves success without developing tremendous self-discipline and without an appreciation, all too often, for the inner wealth of integrity and compassion.
6. Thrift: use it until it shreds / falls apart.
7. Inspiration:
8. When all seems lost... a dramatic reversal:
9. Wildflowers.
10. Rainbows. (Honolulu mauka)
11. Redwoods.
12. Magic.
13. Handmade leis.
14. homemade pizza.
15. Dessert.
16. Camping in national parks: Glacier National Park.
17. Yellowstone National Park: tent camping, first snow of the season.
18. Blue sky.
19. Harvesting and sharing fruit. (ohelo berries)
20. Undiscovered gems you zoom past a hundred times and then finally stop to enjoy.
21. "He that is without sin among you, let him first cast a stone at her."
And again he stooped down, and wrote on the ground. And they which heard it, being convicted by their own conscience, went out one by one, beginning at the eldest, even unto the last: and Jesus was left alone, and the woman standing in the midst. (John 8:7-9)


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition.
Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Richard H. ($50), for your splendidly generous contribution to this site -- I am greatly honored by your support and readership.
 
Thank you, Carl A. ($10), for your superbly generous contribution to this site -- I am greatly honored by your support and readership.

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