STVR/Airbnb Has Destroyed America's Resort Towns

It turns out society isn't just the sum total of the Fed goosing "maximizing shareholder value." People actually have to live in the corrupt, bifurcated, distorted ghetto the Fed and "maximizing shareholder value" have created.

It's an old story, manifesting now in new ways. The rich, buoyed by inherited wealth and access to credit, find a locale with the qualities they desire, and buy the choicest properties for their own use, and a surrounding band of nearby properties so they won't be bothered by the bottom 99%.

This story has a new far more destructive chapter, generated by the boom in STVRs--short-term vacation rentals. The uber-wealthy don't need more money but they're trained, like hamsters in a lab, to seek ways to maximize their income and capital gains. STVRs--Airbnb et al.--are highly attractive investments to the wealthy and their money-managers--the hedge funds, private equity managers, family-wealth advisors, et al.

Residential real estate that can be converted to STVRs is well within reach of the top 10% households, who own between 80% and 90% of all income-producing assets such as housing rentals, stocks, bonds and business equity.

As the Federal Reserve has distorted credit markets with historically unprecedented low interest rates and "excess liquidity," the resulting asset bubbles widened the income-wealth gap between the top 10% who already owned most of the assets soaring in value and the bottom 90% who at best owned a family home with a mortgage.

The top 10% saw super-low mortgage rates and the plump returns on STVRs and rushed to snap up any properties that could be converted from long-term rentals to short-term vacation rentals to get their share of the post-pandemic price-insensitive "revenge spending" we-need-a-vacation bonanza.

This mass conversion of long-term rentals for workers into vacation rentals has social and economic consequences. It's bifurcated America's desirable towns into luxe enclaves for the "haves" and ghettos for the working "have-nots." It was all fun and games seeking to "maximize shareholder value" and ride the next bubble to ever greater wealth and income, but the consequence is the destruction of the nation's social and economic fabric.

I asked longtime correspondent W.S., who has witnessed the transformation in Colorado over the decades, to describe the reality generated by the mass conversion of long-term rentals to STVRs. Here is his account:

"Airbnb has devastated Colorado's resort towns.

It's always been expensive to live in places that wealthy people decided they wanted to visit regularly.

Real estate speculators figure out where the money is quickly enough, buy up property, subdivide it and sell lots to their friends, who build second homes, like the single family castles in Beaver Creek and Vail. They build condos and duplexes and sell them to less wealthy folks who want to live in these places and to small investors who rent them to the people who do the actual work in these communities; our teachers, police and fire fighters, hotel and restaurant and small business operators and their staff, the 'essential services' folks that nobody thinks much about until one day, a pandemic comes along.

In Colorado, the attraction for the past 50 years has been downhill skiing and while rents always were higher than most places, the folks that moved up to the mountains and worked at the skico and surrounding small businesses generally skied for free - a season pass was a more common benefit than a healthcare plan - and the 'locals' lived to ride. Snowboards. Skis. It was a worthwhile trade off.

That era ended completely with AirBnb.

Over the past few years virtually all of the 'locals' housing in Vail, the duplexes in nearby Eagle Vail, the houses in Edwards - everything in the upper Eagle River Valley where locals lived - has been purchased - often sight unseen - by hedge funds, private capital and wealthy full and part time homeowners. It has all immediately been turned into short term rental properties (STVRs) - Airbnb, VRBO, etc.

Why rent a two bedroom apartment to a teacher for $1,500 a month when you can Airbnb the same 40 year old unit for $2,500 a week?

Except now, there are literally no housing units available.

Ok, a few pop up now and then but for $3,750 to $4,000 a month, since the work at home class has bid up the price of everything in resort towns with fast internet, and all of them have it. Even if they don't, Starlink is $120 a month for 50-200 MBPS connectivity. (I have it, it's flawless.)

Local teachers with masters degrees start at $45,000 a year, fresh out of school.

A $3,750 per month rental requires about $11,000 to move in, first and last plus the security deposit. The annual rent comes to $45,000. Thats the gross pay for new hires, which we need annually as our experienced educators retire, or sell their homes they bought a few years ago for huge gains and move elsewhere.

We can't hire teachers.

We can't hire snow plow operators, who are sort of essential in the high country.

Can't hire substitute teachers at $100 a day.

Can't hire bus drivers.

Nobody making under $250,000 can buy a house and live here anymore. Wendy's pays $19 an hour to start - but you can't work there unless you live with your folks or 4 roommates (maybe).

It's so bad in Eagle County that the school district is bringing new teachers, fresh graduates from the Philippines. The district is building 37 apartments for them to live in, dorm style. Teaching has become a job only workers imported from other countries can afford to do here, like picking vegetables.

Sure, house prices have gone up a lot because of the influx of work at homers. They'll probably stay, as heat refugees from the southwest begin to migrate to higher altitudes. But the 20-30 year old former rental units the locals started off in? Sorry. They're Airbnb.

With no working people to staff the grocery stores, these mountain towns might not be the refuge the heat refugees seek."

Thank you, W.S., for this insightful on-the-ground report. Is it really that surprising that those who still have to work for a living resent being crammed into ghettos while America's elite class enjoys their Fed-bubble generated wealth and soaring income?

Is it really that surprising that towns swamped with an influx of visitors and wealthy owners are being fouled as their infrastructure is overwhelmed and their natural wealth exploited / stripmined to "maximize shareholder value"?

The Wealthy Are Not Like You and Me--Our Terminally Stratified Society (8/3/23)

Development In A Wealthy Montana Boom Town Is Fouling A World-Class Trout River

There's Gonna be a War in Montana

It turns out society isn't just the sum total of the Fed goosing "maximizing shareholder value." People actually have to live in the corrupt, bifurcated, distorted ghetto the Fed and "maximizing shareholder value" have created.

---

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A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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Neither Comply Nor Resist

The decay of social norms and status quo systems triggering an authoritarian tightening of the screws is a well-worn pattern throughout human history.

What do I mean by Neither Comply Nor Resist? Let's start by noting society functions by our voluntary compliance with a spectrum of social norms--what's socially acceptable and unacceptable--some of which are institutionalized into legally defined rules that impose judicial consequences on those who break the rules.

Society breaks down when either set of social norms--the institutionalized judiciary or the cultural norms-- loses the voluntary compliance of the vast majority. This dynamic is illustrated by the "broken windows" phenomenon in which a neighborhood decays when windows are broken without enforcement or consequence (i.e. no enforcement of laws forbidding the destruction of others' property) and the broken windows remain unrepaired (i.e. the social-cultural norms have broken down--the owners and authorities no longer care).

We can observe what happens when so-called petty crimes have no enforcement consequences (crime soars) and social norms of politeness break down (rudeness begets violence).

There is also a spectrum of personal responsibility and choice, from obedience to active resistance. This spectrum applies to both laws and regulations and to cultural norms.

Obeying laws and regulations keeps us out of trouble and maintains social order. If some drivers decide that it's politically wrong that "red lights" mean stop, their "resistance" messes up life for the rest of us.

The problem, as we all know, is that when the Powers That Be (in any political system) feel threatened, they respond by becoming more authoritarian. They seek to tighten the screws on the populace to make sure nothing gets beyond their control, and they become hyper-vigilant about hammering down any nails that pop up as threats.

Before you know it, there are laws requiring everyone to wear their underwear on the outside of their clothing (an egregious Woody Allen reference). Regulations pile up to the point no one can even keep track or even be aware of them all. And penalties for law-breaking that is perceived as a threat to the Powers That Be increase.

Laws and regulations tend to be enforced asymmetrically along political lines. In the late 1960s and early 1970s, for example, a large percentage of federal law enforcement personnel and attention was focused on draft resisters, to the point that other criminal activity received less attention.

As authoritarian-political pressures mount, the agencies tasked with enforcing laws end up breaking laws to meet the demands of the Powers That Be. This was eventually laid bare in the congressional Church Committee hearings. It turns out institutions that are supposed to be above politics respond to political pressure when the Powers That Be sense their control is weakening / threatened. They turn up the heat on agencies and cashier bureaucrats who resist the politicization of enforcement.

In other words, The Powers That Be tighten the screws on law enforcement and the judiciary as part of the process of tightening the screws on the populace.

Render to Caesar that which is Caesar's makes excellent sense as authoritarianism increases. Obeying the laws that are supposed to be applied equally to all is both a civic duty (that some are corrupt and get away with it doesn't diminish our duty) and a strategy for avoiding needless trouble.

Active resistance is precisely what the system is hyper-vigilant about crushing. Trust me, getting called in by the FBI regarding "political crimes" isn't like TV. You're alone, and as for counting on being saved by Hollywood-movie heroic lawyers--it's best not to confuse reality with entertainment. By all means, visit your buddy in the pen after his arrest, but he's alone and you're free to leave. If conscience demands resistance, be aware the system loves open resistance because that saves them the trouble of identifying troublemakers.

If it's a matter of conscience, then be prepared to turn yourself in to start your prison sentence. This is what it takes, this is where it goes, especially for "political crimes," i.e. crimes against the state, not against individuals. Trust me on this, I have friends who did this, I've visited friends after their arrest and gone to their trials in federal court. It's not TV, it's real life, with real consequences.

The system incentivizes compliance that isn't legally binding. There's no law requiring people to borrow vast sums to attend college, or take out a crushing mortgage to own a house; those are social norms we're "encouraged" / pressured to comply with.

The point I'm making with Neither Comply Nor Resist is non-compliance and non-resistance are paths to personal freedom and responsibility that have no legal consequence. The individual who doesn't pop up as a nail (i.e. a threat to The Powers That Be) and who renders to Caesar what is Caesar's isn't going to attract a lot of official attention. Fading into the dull-gray background of millions of other people with similar profiles is a practical strategy as social norms break down and authoritarian responses increase accordingly.

It's called opting out, and it's been a successful strategy since the waning days of the Western Roman Empire. Don't want to pay high taxes? Then need less so you can make less money. Low income, low taxes. Start a self-employment enterprise that enables you to legally reduce your net income by expensing legitimate expenses. The less you need, the easier life gets. The healthier you are, the easier life gets. The more you produce and the less you consume, the easier life gets. And so on.

Decaying social norms and systems are more prone to breaking down. If things that were once reliable are no longer reliable or predictable, life gets less easy. The more Self-Reliant we are, the lower our exposure to risk and the downside of system decay.

The decay of social norms and status quo systems triggering an authoritarian tightening of the screws is a well-worn pattern throughout human history. It shouldn't surprise us to be living this dynamic in real time. We don't control the decay or the authoritarianism, but we do control our response.

Those who opt out or otherwise reduce their dependence and exposure to risk serve society in several ways. By reducing dependence and consumption, we lighten the load on institutions struggling to maintain services. By prioritizing production over consumption, we're adding goods and services and not just consuming them. By contributing to networks of other trustworthy, self-reliant people, we're maintaining positive social norms and setting an example of how life can still be worthwhile and rewarding even as social norms degrade and authoritarian pressures increase.

---

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Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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The AirBnB Bubble Popping Will Pop the Housing Bubble

This is how bubbles collapse: the "vital few" 4% sell at whatever the market will bear, pushing prices down, and the 64% awaken to the rapidly narrowing window for locking in bubble capital gains.

Here's how we can tell if a speculative bubble is a bubble: everyone says it isn't a bubble--the market has reached a "permanently high plateau" because valuations are now fairly priced, etc.

Housing globally is in a bubble (See chart below) which we're constantly assured isn't a bubble. As I discussed yesterday ( The Problem Isn't a Housing Shortage, It's the Concentration of Ownership by the Wealthy), this bubble is fundamentally an artifact of central bank and government policies that enrich the already-rich, who were incentivized to outbid each other with low-cost credit to snap up "investment properties" with their "surplus capital" that generate more income and capital gains that cash, which until recently was "trash" due to near-zero savings yields.

Many wealthy families collect multiple properties via inheritance, as second (vacation) homes or as long-term rentals. This hoarding is (as I explained) the only possible result of policies that asymmetrically distribute credit, and thus income and capital gains, to the already-wealthy rather than to the not-yet-wealthy. This policy-driven hoarding / concentration of housing in the top 10% is one factor driving rents higher due to artificial scarcity--a scarcity created by central bank and government policies, not the "market."

(Regulations and bureaucratic friction that push the cost of new constriction to the moon are another factor, but that's a topic for another post. I also want to stipulate that I am not talking about people of modest means who acquired rental properties by scrimping and saving their earned income and making sacrifices for decades--a strategy that is part of Self-Reliance; I'm talking about the already-wealthy who are seeking to "maximize returns" on their unearned "surplus capital.")

A systemic driver of this bidding war for rental properties is the "AirBnB" model of monetizing individual properties to compete with hotels and resorts for lodging. This model is called short-term vacation rentals (STVR), and the already-rich have been pouring their wealth into STVRs for the past 15 years.

This has led to an artificial scarcity of housing in popular tourist destinations. It's not uncommon to visit tourist-magnet cities and see entire buildings with only a few lights on, as many units are owned by the wealthy and left empty, as rents are not as important as having a safe place to "park surplus capital." Thousands of other units have been pulled from the long-term rental market to reap the higher returns of STVRs.

Many cities and locales are finally pushing back against the housing hoarding of the global wealthy, taxing empty units and limiting and/or licensing STVRs.

As I explained yesterday, the flood of post-pandemic price-insensitive "revenge spending" pushed tourist lodging rates to the moon as resorts and STVRs competed on exploiting price-insensitive tourists.

What's often forgotten about real estate is prices are set on the margin. The Pareto Distribution is a handy tool for understanding how an entire neighborhood's home prices are re-set by a mere handful of sales.

The Pareto Distribution is often summarized as the 80/20 Rule. The 80/20 rule can be distilled down to 80% of 80% and 20% of 20% to the 64/4 Rule: the "vital few" 4% exert outsized influence over the 64% mass. So 4% of sales can re-set the valuation of 64% of all neighboring houses.

So 40 houses selling for around $450,000 will re-set the valuation of 1,000 nearby homes from $800,000 to $450,000. This is why an apparently modest number of fire sales of money-losing STVRs will dissolve the floor under bubble valuations.

The STVR bubble was entirely an artifact of 1) historically absurdly low mortgage rates and 2) post-pandemic price-insensitive "revenge spending". Both are over. There is no way the bottom 90% can afford homes at today's bubble valuations, so the pool of buyers is limited to the top 10% already-wealthy, whose appetite for owning "surplus capital" rentals vanishes once the lofty weekly rates and low vacancies reverse into high vacancies and collapsing rental rates.

The bottom 90% have tapped out their pandemic windfalls and their lines of credit. The erosion of the global economy will deflate bonuses, capital gains and all the other sources of the top 10% "wealth effect," and credit will tighten as risk aversion and higher rates turn the spigot of easy credit off for the already-wealthy.

The collapse of the STVR bubble will topple a line of dominoes as corporate owners will awaken from their fantasies and realize they better sell now to lock in their gains before they vanish. Wealthy households who "land-banked" properties for capital gains and places to park "surplus capital" will also awaken to the the need to lock in gains by selling.

This is how bubbles collapse: the "vital few" 4% sell at whatever the market will bear, pushing prices down, and the 64% awaken to the rapidly narrowing window for locking in bubble capital gains. This rush for the exits triggers a strike in buyers, who realize there is no way to know how low valuations will fall, and so waiting for a bottom makes much more sense that playing "catch the knife," i.e. buying as a bubble deflates, hoping you don't get burned by prices falling after overpaying.

---

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A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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The Problem Isn't a Housing Shortage, It's the Concentration of Ownership by the Wealthy

This concentration of housing ownership by the wealthy is the direct result of Federal Reserve and federal policies that benefit the wealthy.

We're told that sky-high rents and home prices are the result of a shortage of housing. The solution is simple: build more housing.

This sounds obvious, but the reality is the problem isn't a shortage, it's the concentration of housing ownership in the top 10%, the same 10% who own the majority of other income-producing assets like stocks and bonds.

The problem is the wealthy are hoarding housing as just another income-producing asset to accumulate because the central bank / economic-financial policies of the past few decades have favored capital over labor and the already-wealthy who bought assets when they were cheap.

The trillions of dollars in new credit have been asymmetrically distributed: the most creditworthy with the highest incomes and collateral are the top 10%, so they scooped up most of the credit. Since real estate is so heavily dependent on credit (20% down and 80% borrowed, not like stocks and bonds), this massive influx of low-cost credit led to the top 10% accumulating investment housing.

In other words, the asymmetric distribution of credit concentrated ownership of housing in the hands of the few at the expense of the many. The wealthy entered bidding wars for "surplus housing" with other wealthy, a bidding process based largely on who had access to the lowest-cost credit and whose existing wealth had ballooned up more in the central bank-generated Everything Bubble.

Those without existing credit-bubble-collateral or the free money issued by the Bank of Mom and Dad couldn't compete.

Given these asymmetries in credit, collateral and family wealth, there was no way the wealthy wouldn't end up with the lion's share of "surplus housing," just as they ended up owning the lion's share of stocks, bonds, precious metals, cryptocurrencies, artwork, etc.

There are many sources of housing-hoarding. One is inheritance. The parents move into assisted living or pass on, and since the family was wealthy enough to help the kids buy their own homes at an early age, the parent's home is "surplus capital" that stays in the family.

Another is corporate buying of rental properties. Steadily rising rents (see last chart below) make rental housing a low-risk, attractive investment, so corporations tapped their credit lines or the corporate bond market to snap up tens of thousands of rental homes. Since corporate costs of capital and management are lower than those available to households, corporations can afford to be less price sensitive. Individual buyers could be outbid by corporations.

A third source is the recent "investment craze" for short-term vacation rentals (STVR) as the wealthy heard stories of other wealthy people getting $10,000 a month from homes that fetched $2,000 a month as long-term rentals.

This differential unleashed a tsunami of home purchases by the wealthy seeking to maximize their gains on cheap credit and "excess capital" stagnating in their accounts earning near-zero interest.

In classic fashion, this land-rush frenzy to capture the outsized profits from STVR gobbled up all the housing inventory, creating credit-induced scarcity. Also in classic fashion, wealthy bidders began basing their bids not on $3,000 a month via long-term rental income, but $12,000 a month (in peak season) income from price-insensitive tourists via STVR.

The deluge of "revenge spending" unleashed after the pandemic lockdowns ended supercharged the greed and acquisition of housing for short-term vacation rentals. $12,000 a month was now chump-change; the price jumped to $15,000, and soon enough, this was a "bargain" that needed another boost higher.

Those desperate for vacations regardless of cost were the perfect customer base for rampant price-gouging, a.k.a. "maximizing return on investment."

The true scale of this land-rush by the wealthy into STVRs is difficult to assess for various reasons. To get preferential mortgage and property tax rates, some new owners may have claimed residency or listed the new purchase as a second home. The only way to accurately assess the true scale is to tote up STVR licenses in locales that require STVR owners to obtain permits and pay annual registration fees.

Consider the facts displayed below. The current housing bubble arose as a direct result of the flood of stimulus issued by the Federal Reserve and Treasury post-pandemic. Note the massive spike in investment purchases that resulted.

The third chart shows that the US population rose by 4 million 2019-2023 while housing expanded by 5 million units. Um, OK, where is the scarcity when housing per capita (per person) is at record highs?

The fourth chart shows that the prime home-buying cohort (ages 25-54) has flatlined since 2008, along with the number employed and thus able to obtain and pay a mortgage. What skyrocketed wasn't the number of employed home buyers--what skyrocketed was credit and central bank / government stimulus: the Fed balance sheet and holdings of mortgage-backed securities skyrocketed (fifth chart), directly goosing housing via lowering mortgage rates, and federal deficit spending.

The wealthy are hoarding housing because the system has incentivized dumping "excess capital and credit" into housing. This concentration of housing ownership in the wealthy is the direct result of Federal Reserve and federal policies that benefit the wealthy.

As longtime correspondent Suzanne S. put it: "I'm not sure we have a housing crisis as much as an ownership crisis."

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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No, Central Banks Won't Save Us This Time

So hey, central bank cheerleaders, lackeys, toadies, apologists, apparatchiks and sycophants: no, the central banks aren't going to "save" your precious asset bubbles from popping.

There's a fanciful confidence afoot that central banks will once again coordinate a global "save" as markets careen out of control. They won't. There are many reasons for this:

1. There is no incentive to coordinate efforts, as each nation/region has vastly differing interests. Each faces a different mix of real-world inflation / deflation of assets, stagnation, currency issues and competing domestic / global interests.

On top of those diverging interests, a low-level "economic warfare" is being waged between dysfunctional co-dependents China and the US, which are like a co-dependent couple who want a divorce but need each other to pay the bills, all the while pridefully (and falsely) claiming they can easily do without the other.

2. The era of low inflation has ended, and so has the era of ZIRP (zero-interest rate policies). The central banks are now perched on the horns of a self-inflicted dilemma: to boost flagging growth, they need tp lower interest rates (their "one weird trick" they picked up off a spam site somewhere), but since they let inflation become embedded and geopolitics is jacking up real-world costs, the usual tricks of dropping rates to near-zero and flooding the financial system with "free money for financiers", a.k.a. liquidity, will reignite still-simmering inflation.

3. The statistical gaming can't hide the fact that inflation is still crushing wage earners. The statistical game is that inflation is measured year-over-year, as if it magically resets every year. But it doesn't reset; all the inflation of the previous years is still present, burdening wage earners.

Consider residential rents. The financial media is slobbering all over itself in its rush to declare that "rents are softening" and rent inflation is dead. You mean rents have fallen back to where they were in 2020? Of course not; all those gargantuan rent increases (and other manifestations of inflation in other sectors) of the past few years are still strangling renters.

As the chart of asking rent below shows, even after "softening," rents are still 20% higher.Those increases are still crushing wage earners.

4. Wages have not caught up with either real-world inflation or asset bubble inflation. The chart of rent and household income reflects the unhappy reality that wages have lagged for 45 years, and continue to lag.

All the central bank-stimulated "growth" ended up in the wealth of the top 10%, not the populace's earned income. This reality has finally entered the public awareness, and so central banks can't goose the wealth of the top 10% under the guise of "stimulating economic growth."

I've posted the chart of the stupendous expansion of the wealth of the top 1% many times: it is the one fundamental restructuring result of central bank stimulus / intervention.

5. The destabilizing extremes of wealth-income inequality generated by central banks are now shackles on its policy options. All the central bank tricks did was ignite a rocket under wealth-income inequality that then bled into the housing market, poisoning it by concentrating ownership of the housing stock in rapacious slumlord corporations and the top 10% who scooped up hundreds of thousands of dwellings as short-term vacation rentals, investment properties and speculative dumping grounds for their "excess capital."

Note my question on the chart of the Fed's ownership of mortgage-backed securities (MBS) which shot from zero to $2.6 trillion in a few years: how did we survive before constant Fed stimulus / intervention on behalf of corporations and the top 10%?

So hey, central bank cheerleaders, lackeys, toadies, apologists, apparatchiks and sycophants: no, the central banks aren't going to "save" your precious asset bubbles from popping. Every central bank "save" further distorted the financial system and the economy, to the detriment of the populace and social stability.

The costs and consequences of central bank distortions have finally come home to roost. The vultures are circling the asset bubbles, awaiting their opportunity to pick over the carcasses of all those who reckoned "central bank saves and asset bubbles are forever."

As for everyone else: you're on your own. Nobody's going to "save" us. The good news is that this is a tremendous opportunity to expand our self-reliance and reduce our exposure to risks we don't control.

Those edging toward the exits are murmuring, "I Have a Very Bad Feeling About This."

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters

Podcast with Richard Bonugli: Self Reliance in the 21st Century (43 min)


My recent books:

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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I Have a Very Bad Feeling About This

Unexpected things tend to happen when the real source of problems are papered over and then suddenly reality intrudes.

What an interesting juncture we've reached. We're constantly assured all is well with what matters--the economy--as the all-powerful Federal Reserve has managed not just the hoped-for "soft landing" but a resurgence of growth: yowza, no recession.

The list of good things is striking: unemployment is low, wages are rising, the wealth effect from explosive increases in housing prices has fattened the home equity of households and the soaring stock market has pushed the economy to giddy heights of wealth and confidence.

The spot of bother with inflation has receded and everyone anticipates interest rates will soon follow inflation back towards zero. China has entered a rough patch but it won't affect us. And so on.

Despite all this uniformly good news, something about the situation is setting off alarms: I have a very bad feeling about this.

Perhaps the root of the feeling that danger is far closer than we discern is the universal confidence that finance can always fix any and all real-world problems. Whatever the problem, central banks can solve it by lowering interest rates and flooding the financial / banking system with liquidity, i.e. monetary easing, making it easier and cheaper for enterprises and households to borrow more money.

On the government-spending side, the central state can fix any and all problems by borrowing and spending however many trillions are needed--fiscal stimulus.

In other words, we don't need to suffer any inconvenient sacrifices or systemic changes, we simply need to borrow more and spend more. This is certainly a tidy solution to all problems: borrow more and spend more. Everything in the real world can be fixed with monetary and fiscal easing and stimulus.

What's interesting about this solution is there is no feedback at all: it's a clean trajectory: borrow and spend more, and real-world problems go away. There is never any feedback from the real-world--for example, borrowing and spending don't actually solve the problem-- nor is there any consequence for continually borrowing more and spending more: we can keep borrowing and spending more without any limit or consequence.

But does this confidence in financial fixes actually map reality? In actual lived experience (as opposed to happy narratives and cherry-picked data), there are problems that aren't solved via borrowing more and spending more, and consequences of borrowing more and spending more.

But the real-world consequences of relying on finance to fix everything are given short shrift in the "everything's wunnerful" narratives and policies. In the real world, flooding failing systems with trillions in borrowed money doesn't actually solve problems, it makes them worse--much worse. Insiders are incentivized not to fix the problems but to skim the "free money" and keep the problem active, so the 'free money" keeps flowing.

Throwing more money at the problem generates diminishing returns and unintended consequences as the endless flood of "free money" distorts incentives and extinguishes the discipline of scarcity required to force actual solutions rather than paper them over with PR.

Complexity is easily added--more layers of management, more compliance, more regulations--and throwing more money at this source of inefficiency and decaying productivity only causes it to expand even more.

Then there's the funny thing that comes with borrowing: interest payments. The more we borrow, the mnore interest we have to pay as the hill of debt grows into a mighty mountain. This rising cost of debt service crowds out other spending, forcing us to borrow even more (perish the thought of tightening our belts and cutting expenses!) and to invest less and consume less.

In other words, relying on borrowing more so we can spend more eventually makes us poorer. That's impossible, of course, because all this borrowing and spending is "investment" that magically "grows the economy" so we "grow our way out of debt." It's a very pleasant thought, but as the borrowed money increasingly goes to paying interest and consumption rather than investment in productivity, the economy stagnates rather than grows.

The "one weird trick" to solve this problem is to lower interest rates to near-zero so debt service takes only a modest slice of income. But all this ever-expanding borrowing more and spending more eventually generates inflation, i.e. money and wages lose purchasing power. Once inflation arises from its slumber, the "one weird trick" goes from being a solution to the source of the problem.

Then there are the perverse incentives generated by reliance on easy money and deficit spending: credit-fueled asset bubbles inflate as most of this "free money" flows to the top of the pyramid, where the top 10% use the low-cost money to buy assets that will increase in value as more and more stimulus is dumped into the economy. As assets soar in value, the not-yet-wealthy are outbid and left in the dust as neofeudal serfs.

This asymmetric distribution of the easing and stimulus straps a rocket booster under wealth and income inequality. Since those who've become much, much richer run the economy, this strikes them as a remarkably positive result.

But beneath the happy-story surface (since I'm doing great, everyone must be doing great), soaring wealth and income inequality is dismantling the foundations of society: the social contract, the ladders of upward mobility, the legitimacy of the government and financial system (it's all rigged to benefit the few at the expense of the many), and the legitimacy of the media and institutions that are supposed to be objective (if we tell you everything's wunnerful, then believe us, because your compliance benefits us.)

The rich not only get richer and the slice of the wealth owned by the poor shrinks, moral hazard is optimized: since there will always be more "free money" available, there's no incentive to limit risk, as the consequences of higher risk will always be offset by more central bank / central state "saves," stimulus, backstops, etc.

So go ahead and make incredibly risky bets, and leverage up those bets: if you win, the winnings are yours to keep (with a slice deducted for taxes, of course); and if you lose, the Fed and / or government will bail you out. What's not to like?

These distortions become problems that borrowing more and spending more only accelerate. The supposed "solution" becomes the "problem" that the "solution" cannot solve.

Unexpected things tend to happen when the real source of problems are papered over and then suddenly reality intrudes. One thing that always surprises the top 10% who own 90% of the income-producing assets is markets suddenly crashing after years or decades of lofting higher on the endless easing and stimulus. After all, everyone knows that assets never go down for long, they only loft higher.

This is true until the easing and stimulus that inflated the assets become the problem. The feedback loops that were ignored or diminished with financial trickery suddenly become self-reinforcing, and all the tricks that worked for decades now push the system into instability and chaotic collapse.

So by all means, retain supreme confidence in the empire of debt and deception and its one "solution," borrow more, spend more. Some of us have a very bad feeling about this, and we're no longer kneeling at the altar of the Fed or mumbling prayers to the false idols of easing and stimulus. When the idols fall, the world they supposedly rule crashes around them.

An economy that's dependent on financial "fixes" is fatally distorted. Beneath the artifice, it has lost the capacity to actually solve real-world problems.

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters

Podcast with Richard Bonugli: Self Reliance in the 21st Century (43 min)


My recent books:

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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The Peculiar Unreality of Spectacle

Isn't AI just a shoddy facsimile of authentic expertise that "serves the state and the media" in a new theater of Spectacle?

Longtime correspondent Zeus Y. recently shared this thought-provoking article: Guy Debord's Warning of 'The Role of the Expert:' A Philosophical Perspective on the Rise of Fact-Checking.

The article sheds light on the current phenomenon of fact-checking and reliance on "experts" by referencing French philosopher Guy Debord's 1967 book, The Society of the Spectacle. (This is a PDF of the entire text.)

Here are some insightful excerpts from the article:

"Because spectacle replaces real life with a mere mediated representation of life that cannot be experienced directly, it provides a framework where mass deceptions and lies can consistently and convincingly appear as true.

It has recreated our society without community, and it has obstructed the ability to communicate in general. Such processes and their ramifications ultimately mean people cannot truly experience life for themselves: they have become spectators, bound to an impoverished state of unlife.

In The Society of the Spectacle, Debord explains that the economy subjugating society first presented itself as an 'obvious degradation of being into having,' where human fulfilment was no longer attained through what one was, but instead only through what one had. As society's capitulation to the economy accelerated, the decline from being into having shifted 'from having into appearing.'

With respect to knowledge, therefore, experts no longer have to be experts or have expertise, they only need to take on the appearance of expertise."

Here is how Debord described his 1967 book in his 1988 follow-up work, Comments on the Society of the Spectacle:

"In 1967, in a book entitled The Society of the Spectacle, I showed what the modern spectacle was already in essence: the autocratic reign of the market economy which had acceded to an irresponsible sovereignty, and the totality of new techniques of government which accompanied this reign."

In my view, Debord is laying out a way to understand how society has become subsumed by economic forces, specifically neoliberal markets.

This arrangement manages the populace by turning everything into a spectacle which in Debord's view is not "real life," it's a representation that we passively accept without understanding how it transforms our identity and social relations from "being" to "having," i.e. consuming and owning stuff that is a representation of who we are and our role in society.

This representation is managed by technocratic expertise--the source of "fact-checking.".

What we refer to as propaganda, marketing and narrative are for Debord all aspects of spectacle.

Spectacle as a simulation or facsimile of "real life" speaks to a profound alienation: we passively watch spectacle and take that passive consumption as "real life" without understanding it's all managed to maintain the dominance of those benefitting from the neoliberal economic arrangement.

This echoes many related ideas (for example, The Matrix films), the post-modern view of simulacra being passed off as the authentic "real thing," and Marx's concept of alienation in which the worker has been disconnected (alienated) from the product/value of their labor.

The core idea here is that Spectacle is inauthentic, a simulacrum or facsimile of reality, a substitution of representation for substance, that creates a peculiar unreality.

The entire appeal of social media can be seen as personalizing Spectacle, as we each gain audience and influence by making ourselves and our lives into unreal representations, i.e. spectacles.

Here are some illuminating excerpts from Dubord:

Debord: "All experts serve the state and the media and only in that way do they achieve their status. Every expert follows his master, for all former possibilities for independence have been gradually reduced to nil by present society's mode of organisation. The most useful expert, of course, is the one who can lie."

Debord: "The vague feeling that there has been a rapid invasion which has forced people to lead their lives in an entirely different way is now widespread; but this is experienced rather like some inexplicable change in the climate, or in some other natural equilibrium, a change faced with which ignorance knows only that it has nothing to say."

This reminds me of a comment French writer Michel Houellebecq made in an interview: "I have the impression of being caught up in a network of complicated, minute, stupid rules, and I have the impression of being herded towards a uniform kind of happiness, toward a kind of happiness that doesn't really make me happy."

This strikes me as an apt description of "spectacle as faux reality."

I am not sure this reliance on spectacle to create a peculiar unreality is solely modern.

If we think of late Rome's extravagant spectacles--staged battles in the Coliseum, chariot races, etc.--they were representations of a Roman power that was no longer real.

In the real world, Rome's power flowed from its vast importation of wheat from North Africa, its lucrative trade with the Mideast and India, its silver mines in Spain and its well-trained and provisioned legions.

Once these decayed or collapsed, the spectacles in Rome were no longer manifestations of power, they were mere representations of a power that was rapidly dissolving in the world beyond Rome.

Those within the bubble of Rome had no grasp of the tenuous instability of the Empire beyond the city walls.

As a final thought, consider how AI is being presented as automated expertise. But isn't AI just a shoddy facsimile of authentic expertise that "serves the state and the media" in a new theater of Spectacle?

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters

Podcast with Richard Bonugli: Self Reliance in the 21st Century (43 min)


My recent books:

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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2021 to 2024: From "Revenge" Splurging to Forced Frugality

After all, "they can always print more money." That's always the solution until it becomes the problem.

What we call economics is best understood as:

1. A mechanism that distributes resources asymmetrically: some benefit more than others.

2. The running of the herd: humans are a social-herd species.

3. Everyone seeks a windfall: something for nothing, or grabbing more while doing less.

4. Everyone seeks to make windfalls permanent by rigging the mechanism to favor their interests.

5. The mechanism is a system of self-reinforcing feedback loops that generate diminishing returns, blowback and unintended consequences.

This perspective helps us understand the progression of the economy from 2021 to 2024. In a nutshell:

2021: massive stimulus, "meme stock" bubble

2022: "Revenge" splurging, inflation

2023: AI stock bubble, "soft landing"

2024: Forced Frugality

So massive stimulus initially triggers the locked-down herd into meme stocks, inflating a bubble. Once the lockdowns end, this massive stimulus unleashes "revenge spending" where price no longer matters, we need a vacation, a new wardrobe, etc., never mind the cost.

Unsurprisingly, this tsunami of price-insensitive spending while the distribution mechanism was still struggling to reconnect disrupted global supply chains leads to 1) rampant price gouging / profiteering and 2) rampant inflation as costs are passed up the food chain.

Many costs are "sticky" and rarely decrease: taxes, fees, wages and benefits, healthcare, rent, insurance, childcare, etc. typically only ratchet higher. Any ratchet lower is rare and modest, and eventually reversed.

The net result is self-reinforcing inflation, as stimulus never really stops: windfalls are rigged to be permanent, even as broad-based stimulus dries up.

Two things happen when windfalls are rigged to be permanent: 1) the distribution of resources ("money," entitlements, tax breaks, subsidies, goodies of all kinds) becomes increasingly asymmetric (the already-rich get much richer at the expense of those barely holding their ground) and 2) the source of the supposedly permanent windfall generates self-reinforcing feedback loops that lead to diminishing returns, blowback and unintended consequences.

In other words, the asymmetric distribution either self-corrects or enters run to failure feedback. Either way, the sources of the windfall cease functioning, and the result is forced frugality. Windfalls that were presumed to be permanent are revealed as temporary asymmetries whose own dynamics generate decay, diminishing returns, blowback and run-to-failure.

And always, of course, the gravy train ending is "impossible" because recency bias encourages us to think the distribution mechanism has god-like powers and permanence. Bur frugality ends up being forced one way or another, even if the stimulus appears to increase. Bubbles deflate and windfalls shrink and then reverse into doing more to get less.

After all, "they can always print more money." That's always the solution until it becomes the problem.

---

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters

Podcast with Richard Bonugli: Self Reliance in the 21st Century (43 min)


My recent books:

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free


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Why Rome Collapsed: Lessons For the Present

No nation clinging to the current "waste is growth / landfill economy" will survive the emergent global polycrisis.

Identifying why the western Roman Empire collapsed in 476 AD has been a parlor game for at least two centuries, since Edward Gibbon published his monumental The History of the Decline and Fall of the Roman Empire (Abridged). Gibbon concluded Christianity had a major role in weakening the Empire, a view few today share.

Part of the fun of the parlor game is trying to identify the one thing that pushed it over the cliff: poisoning from lead pipes and wine goblets being a famous example that has been discounted by modern historians.

New research is more holistic, considering factors that were ignored or dismissed in the past, such as climate change and pandemics.

The word polycrisis captures this basic view: there wasn't just one thing that toppled the empire, it was a confluence of crises that together nudged the empire to the breaking point. The empire was still robust and adaptive enough to handle any one crisis, but the onslaught of multiple, mutually reinforcing crises overwhelmed the resources of the empire.

The book The Fate of Rome: Climate, Disease, and the End of an Empire does an admirable job of explaining the polycrisis of reduced crop yields and pandemics.

Another approach is that of Peter Turchin and other historians, who look at social and economic cycles. Turchin holds that the overproduction of elites leads to elite conflicts that weaken the leadership and soaring wealth-power inequality undermines the social coherence of the state/empire. Ages of Discord: A Structural-Demographic Analysis of American History (2016)

End Times: Elites, Counter-Elites, and the Path of Political Disintegration (2023)

Historians such as David Hackett Fischer, author of The Great Wave: Price Revolutions and the Rhythm of History and Thomas Homer-Dixon, author of The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization, examine the role of resource depletion, higher costs and diminishing returns for those doing the work of propping up the empire.

Historian Michael Grant makes the case for moral rot unraveling social coherence in his classic The Fall of the Roman Empire.

Having read all these works and many others on the subject, it seems clear that all of these factors were part and parcel of the polycrisis that brought down Rome. Each factor added to the empire's already immense burdens while reducing its wealth and resources.

I would highlight three such consequential factors among many:

1. The depletion of the silver mines in Spain, fatally reducing Rome's money supply.

2. The Vandals conquering the North African breadbasket of Rome in 435 AD. The loss of this major wheat supply doomed Rome to scarcities that could not be made up elsewhere.

3. The decline of trade with India through Egypt as silver and gold supplies diminished, as this trade provided 20% of all Imperial revenues. The Roman Empire and the Indian Ocean: Rome's Dealings with the Ancient Kingdoms of India, Africa and Arabia

The view substantiated by Peter Heather argues that the Roman Empire was neither on the brink of social or moral collapse, nor fatally weakened by resource depletion. What brought it to an end were the barbarian invasions from what is now Germany and Eastern Europe. The fall of the Roman Empire: a new history of Rome and the Barbarians.

Heather argues Rome's great success eventually led to its undoing, as the small, loosely organized Barbarian tribes learned from the Romans how to form larger, more cohesive and thus more powerful social and military organizations. Rome's immense wealth was a magnet that attracted the Barbarians in two ways:

1. They wanted a piece of the rich Roman pie

2. In order to get that slice, they adopted Roman values and methodologies.

As a result of what they learned from Rome, the Barbarians became so formidable that Rome could no longer defeat them militarily, as they could when the tribes were smaller-scale and less cohesive.

Heather points out that late-era Rome faced multiple existential military threats, especially from the resurgent Persian Empire that Rome had battled for centuries. Despite its unwieldy size and bureaucracy, Rome managed effective adaptations that resolved the Persian threat.

Heather notes what other authors have focused on: Rome weakened itself by drawing an artificial distinction between "Barbarians" and "Romans." Barbarians were anyone not within the Imperial borders, which were well-defined and defended, a point made by Edward N. Luttwak in his classic study, The Grand Strategy of the Roman Empire: From the First Century CE to the Third.

This distinction discounted the Barbarians and elevated the Romans, generating a fatal hubris in the Roman elites and squandering an opportunity to recruit the Barbarian tribes as stable allies. As with all human groups, if the rewards of alliance outweigh the risky gains of conquest, then leaders and their followers will pick alliance over conquest, the success of which is far from guaranteed.

So-called Barbarians became the core of the Roman army, and many of the most competent generals were either from the Roman hinterlands or they were Barbarians.

Rome had long exercised a military-diplomatic policy of defeating the Barbarians when they invaded Roman territories, but then making treaties with the Barbarian leaders that allowed the Barbarians to trade (and thus share the wealth) with Rome and settle within its borders.

In effect, Rome Romanized many Barbarian tribes over the centuries, mostly with "soft power" (diplomacy, sharing the wealth, cultural absorption) rather than "hard power" (military force).

As Luttwak documented, Rome maintained relatively modest-sized armies, but these armies were professional: very well-trained and armed, highly disciplined, and well-supplied. It staggers the imagination to read that a Roman army on the move constructed a wooden barricade every night to enable the troops to sleep secure from surprise attack. Rome also built a remarkable number of permanent masonry forts throughout its vast territories that acted not just as fortifications but as supply depots, administrative headquarters and towns with commerce and conveniences.

Heather observes that Rome made a fatal mistake in allowing the re-settlement of not-yet-Romanized Barbarians and then not policing them and not honoring the agreed-upon terms. This unleashed a marauding army within Rome's borders.

To show how polycrises work, Heather also noted that this massive influx of Barbarians was largely driven by pressure from Eastern nomads like the Huns who originated in Central Asia. (Attila the Hun wreaked havoc from 434 until his death in 453 AD.)

There is persuasive evidence that tribes from Central Asia moved westward into Europe in response to climate change--reduced rainfall led to less fodder for horses and less food for humans, forcing the move to the relative abundance of Europe.

In effect, climate change doomed Rome by unleashing such massive waves of Barbarian migration that it could no longer manage or repel the Barbarian armies.

In summary, Rome became dependent on the Barbarians for its military might while treating them with social distain, and mismanaging the integration of Barbarians, a task it had handled so admirably in an ad hoc but practical manner.

What can we learn from this complex history of unfolding polycrises?

We can start by observing how climate change (regardless of its source), pandemics, mass migrations, the hollowing out of the money supply, over-extended military commitments, the rise of new threats, declines in harvests and grain supplies, the hubris of ruling elites and extremes of wealth-power inequality all feed off of and reinforce each other.

Put another way, polycrisis is endemic to complex, interconnected systems. If the problems were limited to 1+1+1+1+1=5, the empire could maintain its coherence and adapt in ways to resolve the multiple overlapping crises.

But emergent systems--that is, complex, interconnected systems--are not just a collection of dynamics; the resulting polycrisis has its own dynamics and unique features that are distinct from the features of the five sub-crises. In other words, 1+1+1+1+1=15, and the system / empire is overwhelmed and collapses.

This is why polycrises are different from existential crises: the system could handle one, two or even three crises with its existing resources and structures, but a fourth anf fifth crises changes the nature of the threat.

As a thought experiment, consider how World War II might have gone for the US if:

1) the US hadn't been the world's leading producer of oil, steel, etc.

2) a pandemic had ravaged the young generation needed to expand the military.

3) The Dust Bowl had expanded to include the entire grain-growing Midwest of the US.

Even the most capable leaders still need a productive workforce, a population youthful and healthy enough to staff a military, access to essential resources and cooperative weather / food supplies.

Roman emperor Marcus Aurelius had to auction off the imperial treasure to raise desperately needed cash to fund an expanded military, but he had the treasure, manpower, resources, legacy organization and values to manage the multiple crises he faced as emperor. It was no easy task, hence his Stoicism.

But he still had the foundations of Roman power, both soft and hard power, and enough remained of traditional values and stored wealth to support the necessary adaptation and mustering of resources.

As resources are depleted and climate change disrupts the few breadbaskets of the world, which nations will have the foundations of values, organization, resources, human capital and wealth to survive polycrises?

In my book Global Crisis, National Renewal, I argue that no nation clinging to the current "waste is growth / landfill economy" will survive the emergent global polycrisis. Only those nations that embrace degrowth and a set of values other than maximizing financial gains for the elites will have the means necessary to adapt and emerge not just as survivors but as more adaptable and resilient.

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