Thursday, October 10, 2019

America 2019: Even the Wealthy Are Poorer in Everything That Matters

The price we're paying to keep our heads above water steepens while the pay-off is dropping off a cliff.
A good friend related a story that goes directly to the heart of what's broken in our way of life. My friend went to a reunion in Silicon Valley attended by the most successful cohort in America: super-smart, highly educated people in their mid-40s who have achieved the highest levels of professional accomplishment and built enormous financial wealth, with net worths not just in the millions but in many cases in the tens of millions of dollars.
These are people at the apex of the American economy and society, those who did everything right, worked hard and grasped the brass ring of conventional success.
Yet when the meeting broke into small groups and individuals were asked to speak briefly about their lives, more than a few people teared up and began weeping. My friend was struck by the disconnect between their tremendous success and their personal misery--of failed marriages, of being trapped in their jobs, in feeling their sacrifices weren't worth it and in sensing the shallowness of their success and the poverty of their inner lives.
Not every super-successful person was miserable, of course; some had shifted gears to lower-paid work they found more fulfilling and others still loved their careers. But what was near-universal was the desire to get the heck out of Silicon Valley and leave its pressure-cooker lifestyle in the dust.
It takes a great deal of honesty and inner strength to admit in public that conventional success hasn't delivered the glorious fulfillment and happiness we're scripted to expect.
Ours is a culture of forced optimism. The scripts of forced optimism are repeated daily in endless loops: the "fix" for misery is gratitude (hence everyone interviewed after a "win" must express gratitude and humility) and a menu of self-help tricks: mindfulness, better management of our productivity, etc., in a near-infinite profusion of "5 things you can do to improve your life" lists that gush out of America's prodigious self-help industry.
All of this is intended to obscure the reality that even the wealthy are poorer in everything that really matters. We measure "wealth" in financial terms, but as the super-successful and super-wealthy discover, financial wealth doesn't translate into well-being, fulfilling relationships, agency, health or the other forms of intangible capital that make up "real wealth."
I've just completed a book that explores these topics in depth: Will You Be Richer or Poorer?: Profit, Power and A.I. in a Traumatized World.
The book also examines the constantly hyped faith that technology will inevitably make us all richer, the implicit premise being that every technological advance is automatically making our lives better in every way, every day.
A corollary of this forced technology optimism is that robotics and artificial intelligence (AI) will inevitably generate trillions of dollars in profits that will enable us all to 1) quit working because robots will do all our work and 2) draw a substantial monthly "dividend" from this endless gusher of tech-generated profits.
Nice, except every one of these assumptions is demonstrably baseless. AI might enrich the few who own the platforms and monopolies, but even that is unlikely, given that these technologies are rapidly being commoditized.
These are difficult dynamics to understand, but if we want to become wealthier in meaningful ways (including sustainable financial wealth), we have to understand these concepts at the deepest level. If it was possible to explain these complex realities in a 200-word list of 5 easy tips, I would, but alas, it took 38,000 words just to manage a modestly comprehensive overview.
As all the costs we don't even measure pile up, we're all getting poorer whether we are able to admit it or not. A society / economy that's fragmenting and failing is not making us all richer, despite the signaling device of a rising stock market and gamed statistics (unemployment at a 50-year low, etc.).
This book is also the result of my personal journey through burnout, a topic I discussed earlier this year in Burnout Nation. The price we're paying to keep our heads above water steepens while the pay-off is dropping off a cliff. While we're constantly told to focus on the rising value of our stocks and homes (if we have any meaningful equity in either one, which many do not), our well-being, health, social mobility, agency, trust in institutions, non-financial capital and security are all declining.
Burnout forces us to re-assess costs, sacrifices and pay-offs in a wrenching reckoning that can no longer be put off. The recession that is slowly but surely unfolding will increase the stress on many of us, and force all sorts of personal reckonings on people who have spent years avoiding just such a reckoning.
My goal in writing this book was to help everyone going through a personal reckoning understand the impoverishment meted out by our broken socio-economic system, an impoverishment that may be invisible even as we sense it weighing more heavily on us every day.
How do we turn around this decline in everything that matters? The first step is to recognize and measure all forms of capital, tangible and intangible alike, and make a personal balance sheet of all the forms of capital we own or have access to, and prioritize which ones are the most important to us.
There's much more in the book. Please take a look at the first section for free (PDF). There's a 15% discount on both the digital and print editions through the month of October.
A note of thanks to those who buy the book: As an independent writer, book sales are a substantial part of my livelihood. I receive no funding from any trust fund, university, philanthro-capitalist foundation, think-tank, shadowy C.I.A. front, media giant or government agency.


My recent books:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


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.

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Wednesday, October 09, 2019

Will the Clintons Destroy the Democratic Party?

History is full of ironies, and perhaps it will suit the irony gods for The Donald to take down the Republican Party and the Clinton dynasty to destroy the Democratic Party.
Let's start by stipulating my bias: I would cheer the collapse of both self-serving, venal political parties, which have stood by for decades as the rich have become immeasurably richer and the politically powerful few have disempowered the many. The transparent "populist" bleatings of both parties--"we serve the people!"--sound increasingly like stale, pathetically disconnected from reality Soviet-era propaganda.
Let's say I'm a relatively disinterested observer other than my fervent wish that both corrupt, self-serving parties slide into the dustbin of history, the sooner the better.
The Republicans were hijacked by Donald Trump and given a binary choice: accept Trump as their candidate and have a chance of winning, or reject him and guarantee losing. After surveying the wreckage left by the Bush dynasty and Romney's loss, the Repubs swallowed their distrust and distaste for The Donald and chose winning over losing--the easily predictable choice for all politicos.
The Democrats chose to enact a Greek tragedy featuring off-the-charts hubris. Despite Hillary's private email server, the Clinton Foundation's shameless shakedowns for millions of dollars in "contributions" (the polite word for influence peddling), and her delight in mocking those who chose not to vote for her as "deplorables," the Democrats were supremely confident that the Clinton dynasty would sweep them to an easy and overwhelming victory.
As the Greek dramatists understood, hubris doesn't just invite disaster, it welcomes disaster. The Democrats were then handed a binary choice: either cast the Clintons adrift with a few provisions and a hearty cheer and move on, or set the course of the Party for the next four years to the Clintons' Ahab-like obsession: we wuz robbed, and the terrible error of history (Hillary losing the 2016 election) would have to be corrected regardless of the cost.
To aid their mono-maniacal campaign, the Democrats partnered with the most anti-Democratic and corrupting force in America, the alphabet agencies of Imperial Pretensions, the CIA et al., who are institutionally bound to view the citizenry's right to choose its government and its government's policies with utter disdain: we rule the Empire, and democracy is only acceptable as long as it rubber-stamps our rule.
This aligned perfectly with the Clinton dynasty's view, and so the unending campaign to unseat The Donald was launched.
For better or worse, this unholy alliance put the Democratic Party's legitimacy on the gambling table. The Democratic Party, whether it accepts or understands this reality or not, has devolved to an absurdist cable-channel devoted exclusively to unseating The Donald, regardless of the cost and regardless of the sacrifices required to pursue what is increasingly a quixotically misguided venture.
Wittingly or unwittingly, every institution allied with the Democrats has also put its legitimacy on the gaming table, the most important of which is the mainstream media, including the quasi-public Propaganda Broadcast Service (PBS). The corporate media and PBS have been reduced to late-night TV programming, selling the same flimsy gadgets with the same tired pitch: "But wait--there's more!"
All of which leads us to the question: will the Clintons destroy the Democratic Party, or perhaps even more saliently: have the Clintons already sealed the fate of the Democratic Party?
We won't know the voters' judgment until November 2020, but judging by campaign contributions, the delegitimizing ill-will being generated by the Party's transparent suppression of Tulsi Gabbard, its Ahab-like obsession with impeachment and its bad-karma reliance on the FBI and CIA's most treacherous operatives, the Party's leadership might not hold a winning hand.
History is full of ironies, and perhaps it will suit the irony gods for The Donald to take down the Republican Party and the Clinton dynasty to destroy the Democratic Party.
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. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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.
 
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Tuesday, October 08, 2019

Our Time/Labor Is Finite, But Money Is Infinite

Once we understand this mechanism, we understand that labor can never get ahead.
I've been pondering a comment longtime correspondent Drew P. emailed me in response to my post, What's Holding Up the Market?"Our time/labor is finite, but money is infinite." Drew explained that creating new fiat currency and injecting it into a closed system (our financial system) controls and restrains the value of our time and labor, past, present and future.
This is a profound insight into why our financial system is inherently exploitive and why it is unsustainable.
As citizens of Venezuela and other nations have discovered, the power to create infinite sums of currency devalues the fruits of our labor in the past, present and future. As new currency is injected into a stagnating economy, the purchasing power of labor's earnings declines. The only way to keep from sinking is to borrow money, which siphons off labor's earnings via debt service to those who get the new fiat currency: the banks, financiers and corporations.
The near-infinite creation of new currency devalues past labor by destroying the value of pensions and savings, devalues the value of today's labor and of labor's future earnings.
Labor is stripped of value in two ways: the purchasing power of labor's earnings are steadily devalued, and much of the remaining earnings are devoted to servicing debt that was taken on to stay afloat financially.
Meanwhile, those receiving the central banks' free money for financiers can use this new currency (i.e. low-cost credit) to buy up income-producing assets and leverage speculations that reap enormous capital gains, as assets are never allowed to drop in value because "the Fed has our backs."
And why does "the Fed has our backs"? Because the system implodes once debt and currency creation stop expanding.
Once we understand this mechanism, we understand that labor can never get ahead. No matter how hard one works, or how much one saves, the amount of "money" (fiat currency) that can be created and distributed to those at the top of the wealth-power pyramid will always be near-infinite, and the more credit / debt / currency that's issued, the greater the loss of labor's purchasing power.
This simple mechanism--labor is finite but money is infinite--is driving the world's social, political and financial unraveling. Global debt now totals $246 trillion, a staggering 320% of global GDP, and there is nothing restraining it from climbing to $300 trillion, $400 trillion and $500 trillion, while labor's earnings are stealthily and relentlessly stripped of purchasing power.
Here's America's debt binge, rising geometrically in near-infinite expansion:
Here is global debt, a jagged line that moves ever higher:
Drew reminded me that without finite money, i.e. sound money, labor will continue to be enslaved to debt and a steady depreciation of the purchasing power of labor's earnings.
Thank you, Drew, for reminding me with such an impactful, succinct explanation: "Our time/labor is finite, but money is infinite."
My proposed solution is a labor-backed cryptocurrency which can only created by labor and only distributed to labor. I outline how this would work in my books A Radically Beneficial World and Money and Work Unchained.


Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): 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.


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. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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.
 
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Sunday, October 06, 2019

What's Holding Up the Market?

The Fed's nearly free money for financiers policies in support of the Super-Rich do not exist in a vacuum--the disastrous consequences are already baked in.
What's holding up the U.S. stock market? The facile answer is the Federal Reserve ("the Fed has our back," "don't fight the Fed," etc.) but this doesn't actually describe the mechanisms in play or the consequences of a market that levitates ever higher on the promise of more Fed money-for-nothing injected into the diseased veins of the financial system.
As Gordon T. Long and I discuss in our latest half-hour video program, What's Holding the Market Up? (34 minutes), the primary prop under stock valuations are corporate buybacks, which total in the trillions of dollars since the 2008-09 Global Financial Meltdown and the Fed's "rescue of the rich," which continues to this day.
Rather than risk capital in productive investments, U.S. corporations have borrowed trillions of dollars and used the cash to buy back their own shares. The Fed's suppression of interest rates has incentivized stock buybacks in several ways:
1. When it's cheap to borrow billions, the biggest bang for the buck is to use the borrowed bucks to buy back shares, which creates an illusion of growth as per-share sales and earnings both rise as shares are withdrawn from the public market.
Let's say a company has a million shares outstanding and earns a net profit of $1 million. The per-share net profit is thus $1 per share. If the company borrows money and buys back 500,000 shares of its own stock, the per-share net earnings double to $2 per share.
Presto-magico, the company appears to be more profitable, and so its valuation based on its price-to-earnings ratio (P-E) adjusts higher, even though revenues and earnings have remained stagnant.
2. If a corporation piles up cash, it becomes an attractive target for acquisition. The way to avoid being taken over is to pile up debt (borrow money or sell corporate bonds, swapping debt for equity) and use the funds to buy back shares. As the corporation's remaining shares soar in value, the company can use its own shares to acquire rivals.
These perverse incentives are the heart of the Federal Reserve's policies, as depicted here: as real economic growth has slowed, the Fed's largesse of cheap money has flowed into corporate buybacks because that's what's incentivized.
The Fed's nearly free money for financiers policies in support of the Super-Rich do not exist in a vacuum--the disastrous consequences are already baked in. As Gordon's chart shows, Fed policies effectively replace capitalism (investing capital productively and accepting risk) with creditism, a debt-dependent speculative system that transfers risk to the Fed and the taxpayers (i.e. profits are private, losses are socialized).
Needless to say, this doesn't end well, as expanding credit and borrowing to fund speculation and consumption inevitably ends in a currency crisis that devalues the currency for everyone, rich and poor alike.
There's much more in our video discussion:
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. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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, Jason C. ($10/month), for your outrageously generous contribution to this site-- I am greatly honored by your support and readership.
 

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Friday, October 04, 2019

Democracy Is Now a Hindrance to the Imperial State

Democracy is the coat of paint applied for PR purposes to the Imperial State.
If we step back from the histrionics of impeachment and indeed, the past four years of political circus, we have to wonder if America's democracy is little more than an elaborate simulation, a counterfeit democracy that matches our counterfeit capitalism (Matt Stoller's term).
If we review the mechanics of our "democracy," we find that swapping which party controls Congress doesn't really change the policies of The Imperial State, the central state that oversees America's global commercial and geopolitical empire.
Next, consider the high return rate of incumbents. Once in power, politicos can skim the millions of dollars in campaign contributions needed to win re-election.
Then there's the some are more equal than others nature of the judicial system that serves the interests of financial and political elites: Bernie Madoff was free to continue his Ponzi scheme for years despite whistleblower attempts to instigate a federal investigation, and pedophile /schmoozer / "intelligence agency asset" Jeffrey Epstein was free to exploit underage teens and pile up $200 million after a wrist-slap conviction.
The corporate mass media is the PR machine for the Imperial State. If the state seeks to sell the public a war of choice, the media dutifully pounds the drums of war. If the Imperial State decides to disempower a president or other elected official, the media will hound the elected official until he/she is disgraced or buried, too busy fighting off the ceaseless media propaganda to function. The mass media excels at ruthlessly mocking political targets, reducing their stature in the public eye and undermining their "soft power."
As for presidents: as long as the prez follows the Imperial minders' orders, everything will be fine. Cross the minders and you're out. The perfect presidential candidate from the perspective of the Eastern Establishment / National Security State was Bush I: Eastern Establishment blue-blood, Yale, combat military service, and stints in high offices, including high-level diplomacy and the CIA.
Bush I famously lacked "the vision thing," but presidents only need "the vision thing" during the campaign--witness Obama's "hope and change" slogan. Once elected, they just need to follow the Imperial script, which includes a permanent PR campaign touting "democracy" as a necessary facade for the actual workings of the Imperial State.
Bush I was the ideal Imperial State president because he understood the need for the velvet glove of diplomacy, the most important element of which is an orchestrated demonstration of Imperial restraint. This also includes healthy dollops of PR about the sanctity of our alliances, which are heavily promoted as the acme of win-win cooperation, etc. He also understood the essential role of America's commercial Empire: the US dollar, US banking and US corporate interests around the world.
Imperial State handlers cannot tolerate loose-cannon presidents, those who keep their own council and who act outside the "recommended guidelines," for example, trying to make peace with rivals and enemies that the Imperial State cultivates as "enemies" for its own purposes.
John F. Kennedy appeared to be the ideal Imperial State president: wealthy Eastern Establishment, Harvard, combat military service, informal diplomatic experience via his father's connections, an enthusiastic supporter of the Imperial State's Cold War and a youthful politician with superb communication skills who the mass media fell for hook, line and sinker.
Once Kennedy soured on the CIA, things got dicey. The ideal president quickly became less ideal as his independence grew.
The Imperial State and mass media always feared and hated Richard Nixon, a poker player who kept his cards hidden and who surrounded himself with loyalists and outsiders, a rogue politician who could upstage the Imperial State's agenda by private diplomacy (opening relations with China) or expanding wars of choice (the invasion of Cambodia).
Nixon's cabinet was well-stocked with Establishment pros, but they were largely figureheads when it came to the bold private diplomatic moves Nixon favored. In other words, Nixon was the Imperial State's nightmare president.
Just to show that the Imperial State plays no favorites in party affiliations, the State and its media organs also hated Jimmy Carter, another independent who wandered outside the "recommended guidelines" and had to be destroyed via endless mockery and the undermining of his initiatives.
(Maintaining the circus entertainment of party politics is a core function of the mass media.)
The Imperial State was deeply distrustful of Reagan, hence the constant media mockery and the attempt to unseat him via the Iran-Contra Affair. But Reagan was smart enough to surround himself with insiders (Cap Weinberger, James Baker et al.) and popular enough to fend off the constant media attacks, much to the media's intense frustration (hence their mocking description of Reagan as the "Teflon president." How dare he survive our campaign to undermine and destroy him!)
Bush II was no Bush I, but he followed orders and never strayed from the "recommended guidelines." The same can be said of Bill Clinton and Barack Obama, telegenic communicators in the Kennedy mold.
Needless to say, the Imperial State and its media organs loathe Trump, the loosest cannon imaginable. Hillary Clinton had proven herself a reliable water carrier for the Imperial State, and so her election was elaborately planned and staged: potentially loose cannon Bernie Sanders was shivved in the primaries by the Democratic Party, and the champagne was chilled for Hillary's victory.
Alas, the party was crashed in a most unforgivable fashion, and the Imperial State's war on Trump has been unremitting and ham-handedly obvious.
Democracy is the coat of paint applied for PR purposes to the Imperial State. "Democracy" is only tolerated if it follows the approved script. The Republic is good PR, but the Empire makes the rules and the scripts that elected officials follow, and woe to anyone who wins an election they were supposed to lose or who strays too far from the "recommended guidelines." (Imperial enemies must remain enemies until the Empire decides otherwise.)
Democracy has always been a "problem" for the Imperial State to manage, but now it is a hindrance to Imperial pretensions and power that is setting up an existential crisis unlike any other in American history.
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. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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, Theodore C. ($75), for your stupendously generous contribution to this site-- I am greatly honored by your steadfast support and readership.
 

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