Friday, December 07, 2018

Are We in a Recession Already?

The value of declaring the entire nation in or out of recession is limited.
Recessions are typically only visible to statisticians long after the fact, but they are often visible in real time on the ground: business volume drops, people stop buying houses and vehicles, restaurants that were jammed are suddenly sepulchral and so on.
There are well-known canaries in the coal mine in terms of indicators. These include building permits, architectural bookings, air travel, and auto and home sales.
Home sales are already dropping in most areas, and vehicle sales are softening. Airlines and tourism may continue on for awhile as people have already booked their travel, but the slowdown in other spending can be remarkably abrupt.
All nations are mosaics of local economies, and large nations like the U.S. are mosaics of local and regional economies, some of which (California, Texas, New York) are the equivalent of entire nations in and of themselves.
As a result, there can be areas where the Great Recession of 2008-09 never really ended, and other areas that have experienced unprecedented building booms (for example, the San Francisco Bay Area where I live part-time.)
Changes in sentiment are reflected in different sectors of the economy: people become hesitant about big purchases first (autos, houses) and then start deciding to save more by spending less (Christmas shopping, eating out, vacations, etc.)
Given the structural asymmetries of our economy (a few winners, most people lucky to be losing ground slowly), each economic class also responds differently. The lower 60% of households don't have the disposable income of the top 10%, so "cutting back" for them might be buying fewer fast-food meals per week.
The top 10% have the majority of the nation's disposable income, just as they own two-thirds of the wealth. If the sources of their income tanks (tech bubble pops, etc.), then signs of recession in this class will be a decline in high-cost consumption: luxury store sales, fancy restaurants, etc.
In other words, different classes, sectors and regions of the economy can be recession while others are still doing fine.
s a result, the value of declaring the entire nation in or out of recession is limited. While national conditions such as mortgage rates and Treasury yields are consequential, the recessionary effects will likely be as asymmetric as the economy: the effects will vary considerably depending on how each sector, class and region are doing.
To summarize: the top 10% may never experience a recession that guts the bottom 90%, who depend on wages rather than earnings from capital. As this chart illustrates, wages (employee compensation) has been in structural decline.
My new book Pathfinding our Destiny is available at a discount for the ebook and the print edition through December 15 ($5.95 ebook, $10.95 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 discounted ($5.95 ebook, $10.95 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.
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Tuesday, December 04, 2018

The View from the Trenches of the Alternative Media

What's scarce in a world awash in free content and nearly infinite entertainment content?
After 3,701 posts (from May 2005 to the present), here are my observations of the Alternative Media from the muddy trenches.
It's increasingly difficult to make a living creating content outside the corporate matrix. The share of advert revenues paid to content creators / publishers has declined precipitously, shadow banning has narrowed search and social media exposure and the expansion of free content and competing subscription-based publishing has made subscription services an increasingly tough sell.
The most effective ways to silence critics and skeptics is to 1) de-monetize their sites / platforms and 2) restrict their access to the public via shadow banning and search algorithm "adjustments." The two are related, of course; as audiences dwindle, so do revenues and opportunities to sell subscriptions or promote patronage.
The corporate media's lumping of all alternative media in with "fake news" and troll-farms has intentionally tarnished all alternative media, as undermining independent journalism and commentary is an essential part of unifying public opinion behind "approved" ideologically uniform narratives.
Significant swaths of the public get their "news" and commentary solely from social media (Facebook and Twitter, and to a lesser degree, Instagram) or a handful of corporate media (which included PBS/NPR). As these channels limit / delegitimize alternative media voices, the public's access to alternative analysis and commentary diminishes even further.
A few quasi-monopolistic corporations have effectively become gatekeepers: what's approved is allowed to be viewed / heard / read, what raises eyebrows effectively disappears.
It's become increasingly difficult to make a living writing books. Advances for established authors have fallen from $10,000 or $20,000 to $2,500 or $1,000, and in the academic publishing world, $1,000 may be the entire sum paid to the author for writing a book.
Are people reading fewer books as video and entertainment content expand exponentially? Perhaps. Or are people reading whatever is free rather than buying ebooks/print books? There are likely multiple factors at work, but the bottom line is the Pareto Distribution is visible in the "long tail" of thousands of content creators who receive very little in the way of earnings and a handful at the top of the distribution who capture the lion's share of all royalties and other income.
What's scarce in a world awash in free content and nearly infinite entertainment content? Fresh, independent insight is eternally scarce, and in a world in which almost everyone is selling a cover story to secure their spot at the corporate-state trough (or win the approval of their social-media "tribe"), authenticity is also scarce.
The economic-financial value of insight and authenticity are unknown; the market doesn't price these as it does commodities such as "news". It's left to individuals to assess and establish the economic-financial value independent journalism and commentary.
My new book Pathfinding our Destiny is available at a discount for the ebook and the print edition through December 15 ($5.95 ebook, $10.95 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 discounted ($5.95 ebook, $10.95 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.
 
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Sunday, December 02, 2018

Truth Is What We Hide, Self-Serving Cover Stories Are What We Sell

The fact that lies and cover stories are now the official norm only makes us love our servitude with greater devotion.
We can summarize the current era in one sentence: truth is what we hide, self-serving cover stories are what we sell. Jean-Claude Juncker's famous quote captures the essence of the era: "When it becomes serious, you have to lie."
And when does it become serious? When the hidden facts of the matter might be revealed to the general public. Given the regularity of vast troves of well-hidden data being made public by whistleblowers and white-hat hackers, it's basically serious all the time now, and hence the official default everywhere is: truth is what we hide, self-serving cover stories are what we sell.
The self-serving cover stories always tout the nobility of the elite issuing the PR: we in the Federal Reserve saved civilization by saving the Too Big To Fail Banks (barf); we in the corporate media do investigative reporting without bias (barf); we in central government only lie to protect you from unpleasant realities--it's for your own good (barf); we in the NSA, CIA and FBI only lie because it's our job to lie, and so on.
Three recent essays speak to the degradation of data and factual records in favor of self-serving cover stories and corrosive political correctness.
"It’s not just that isolated individuals are unmasked as corrupt or self-interested (something that is as old as politics), but that the establishment itself starts to appear deceitful and dubious. The distinctive scandals of the 21st century are a combination of some very basic and timeless moral failings (greed and dishonesty) with technologies of exposure that expose malpractice on an unprecedented scale, and with far more dramatic results.
Perhaps the most important feature of all these revelations was that they were definitely scandals, and not merely failures: they involved deliberate efforts to defraud or mislead. Several involved sustained cover-ups, delaying the moment of truth for as long as possible.
(The selective coverage) "generated a sense of a media class who were adept at exposing others, but equally expert at concealing the truth of their own behaviours.
Several of the defining scandals of the past decade have been on a scale so vast that they exceed any individual’s responsibility. The Edward Snowden revelations of 2013, the Panama Papers leak of 2015 and the HSBC files (revealing organised tax evasion) all involved the release of tens of thousands or even millions of documents. Paper-based bureaucracies never faced threats to their legitimacy on this scale."
From the Late Founder and Editor Robert Parry of the Consortium for Independent Journalism (via John S.P.)
When I was a young reporter, I was taught that there were almost always two sides to a story and often more. I was expected to seek out those alternative views, not dismiss them or pretend they didn’t exist. I also realized that finding the truth often required digging beneath the surface and not just picking up the convenient explanation sitting out in the open.
But the major Western news outlets began to see journalism differently. It became their strange duty to shut down questioning of the Official Story, even when the Official Story had major holes and made little sense, even when the evidence went in a different direction and serious analysts were disputing the groupthink.
Looking back over the past two decades, I wish I could say that the media trend that we detected in the mid-1990s had been reversed. But, if anything, it’s grown worse. The major Western news outlets now conflate the discrete difficulties from made-up “fake news” and baseless “conspiracy theories” with responsible dissenting analyses. All get thrown into the same pot and subjected to disdain and ridicule.
In truth, facts today are deemed controversial if they deviate from accepted narratives, and professors must self-censor out of fear of being condemned and losing their jobs.
Based on conversations I’ve had with colleagues still working in academia and from what I can tell about recent cases of censorship, the antagonism is primarily from left-leaning colleagues attacking other liberals.
These instances are indicative of a larger, worrisome trend – instead of debating contentious ideas, those in opposition to them throw words ending in “-phobic” around, shutting the conversation down and pretending they don’t exist.
For those who say ideas that denigrate members of society shouldn’t be entertained, silencing the debate doesn’t make hateful beliefs go away. In many cases, it isn’t controversial findings that pose a threat; the threat comes from the possibility that others will use these facts to justify discrimination. But it’s important that we distinguish between an idea and the researcher putting forth that idea, and the potential for bad behaviour.
With academics avoiding entire areas of research as a result, knowledge currently being produced is constrained, replaced by beliefs that are pleasant-sounding but biased, or downright nonsensical. The recent “grievance studies” investigation, led by academics Peter Boghossian, James Lindsay and Helen Pluckrose, laid bare how bad the problem has become. The trio managed to get seven fake papers (but oh-so politically correct and hence "good to go"--CHS) accepted in high-ranking humanities journals.
In a consumerist-based culture accustomed to 24/7 selling of one self-serving story or another, the fact that lies and cover stories are now the official norm only makes us love our servitude with greater devotion. I've noticed a new twist on self-serving propaganda: an alternative opinion isn't debated, it's debunked, as if questioning the official narrative is by definition a "conspiracy theory" that can be "debunked" by repeating the official self-serving cover story enough times.
Of related interest:
Orwell and Kafka Do America (March 24, 2015)
The Ghosts of 1968 (February 14, 2018)
My new book Pathfinding our Destiny is available at a discount for the ebook and the print edition through December 15 ($5.95 ebook, $10.95 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 discounted ($5.95 ebook, $10.95 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.
 
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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.
 
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