Is Real Food Expensive in America?

Please don't claim real food is "too expensive" to eat. What's "too expensive" is unhealthy processed and fast foods.

It is a truism that food is expensive in America. What if we ask, "is real food expensive in America?"

Let's define "real food" as unprocessed or minimally processed: raw fruits and vegetables, whole grains, unprocessed meat. Minimally processed would include rolled oats, 100% whole wheat bread, tofu, etc.

Exhibit #1: I recently bought this real food, here in America, for less than $5: 9 oranges, large bag of mustard cabbage, large bag of Shanghai bok choi and a large bag of malabar spinach. It was not in the "half off" bin; I paid the full retail price:

Exhibit #2: all of the above, plus 30 eggs and a hand of bananas: total less than $10:

Each of these vegetables makes 4 to 6 servings, and the 2.5 dozen eggs provides plenty of protein for multiple meals. I could have added some excellent frozen fish for under $2 a pound, and cooked a few ounces per serving--a typical serving in traditional Asian cuisine, where one piece of chicken is thinly sliced and added to vegetables to feed four people.

$10 in fast food might get you two "value meals" of saturated-fat burgers, fries and sugar-water drink. $10 in packaged food will buy an assortment of fake-food: frozen pizzas, snacks, sugar-bomb breakfast bars, etc.

Is real food expensive in America? As a percentage of median household income ($49,777), no. Is processed or fast food expensive? If the "value" is measured in nutrition and well-being, yes, the cost is very high indeed.

Apologists often cite four reasons why people (and more particularly, low-income people) tend to eat so poorly in America. One is the high cost of "real food." This is not quite true, as shown above: if you shop at Asian or Latin markets, you will find prices for fresh produce and other real food is typically much lower than in conventional supermarkets.

The second reason offered is that there are no grocery stores in low-income areas. This is also not quite true, as the aforementioned ethnic markets are typically only found in low-income immigrant-friendly areas.

The third excuse is that low-income people lack a proper stove/oven. The majority of Indian, Chinese and southeast Asian cuisine is prepared in one saucepan or wok that only needs one burner, a cutting board, one knife and a stirring/serving tool. The variety and healthy qualities of these cuisines are well-known. You only need one burner and a single saucepan/wok to make a huge range of healthy meals.

The fourth reason given is that people work long hours and have no time to cook, especially low-income workers with long commutes on public transport.

I routinely prepare a healthy meal with the above vegetables or equivalent (green beans, etc.) and a few ounces of meat in about a half hour. With a pressure cooker (widely available at garage sales, etc.), you can prepare a pot of beans or lentils (dal) in less than an hour.

Compare these modest investments of time with surveys that routinely find Americans of all incomes and ethnicities watch up to four hours of TV or equivalent "entertainment" (web-surfing, videogaming, etc.) a day. Some surveys put the total even higher than four hours.

So the apologists are claiming that people find four hours to watch TV, etc., but they have to stop at fast food outlets for dinner because they have no time to prepare a meal with real food.

None of these excuses hold water. Even more absurdly, some apologists claim that "people don't know how to cook." With dozens of cooking shows being broadcast and thousands of recipes available to anyone with a smartphone or Internet connection, this strains credulity. There are even these useful things called cookbooks that can be borrowed from a public library.

Let's also recall that up to 40% of all food in the U.S. is thrown in the garbage. Do you throw away what is costly? No, you throw away what is cheap.

What it boils down to is convenience, marketing and engineering: processed food and fast-food are engineered to "taste good" (i.e. salty, fatty and sweet), marketing hypes them 24/7 and Americans have been brainwashed to worship convenience above all else.

So please don't claim real food is "too expensive" to eat. What's "too expensive" is unhealthy processed and fast foods.

NOTE: I will be taking a few days off from online work, so I will be unable to respond to email. Thank you for your understanding. 

---

SPECIAL OFFER ON GREEN COFFEE BEANS FOR LONG-TERM STORAGE FROM EVERLASTING SEEDS: Here is a note from ES's founder: "I've successfully stabilized green coffee beans for a period of six years and still had them roast up to within 90-95% of their 'new' bouquet, smoothness, and flavour characteristics. We've finally got all of the odds and ends together, along with the best 'stove top' roaster {Whirley Pop} that we're found. The coffee beans are all 100% Organic: Peruvian, Colombian, and Guatamalean in two sizes, 1 lb. And 5 lbs. the sealed cans contain a small 'Roasting Guide' that gives basic instructions, roasting times and temps, etc. This is, by necessity, only a brief intro with the essential information, as it has to fit into our smaller, 'chowder' size can.

It's taken me nearly ten years to experiment, wait, and finally find a method that would preserve the bean's natural flavours and oils. The other thing that suggested itself to me is that I can think of few things, outside of the obvious 'necessities' {Bible, beans, bullets} that would be more valuable, command a higher price, and be virtually instantly 'tradeable' anywhere, anytime after an 'event': coffee is, in a multitude of ways, our latter day 'comfort food.'"

---

My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart:

1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economyComplex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.

10% discount on the Kindle edition: $8.95(retail $9.95)       print edition: $24 on Amazon.com
To receive a 20% discount on the print edition: $19.20 (retail $24), follow the link, open a Createspace account and enter discount code SJRGPLAB. (This is the only way I can offer a discount.)

Thank you, Edward H. ($5/month), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.

Thank you, Robert E. ($5/month), for your superbly generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

The Obesity Puzzle

Obesity and well-being are not just a matter of carbs/no-carbs; the causal chain is not that simple.

There are almost as many theories about why obesity has exploded in America and the world since the 1980s as there are researchers compiling data.

The rise in Body Mass Index (BMI) appears to correlate with the rise of high-fructose corn syrup (HFCS), a simple carbohydrate.

Let's begin by comparing two charts from the Centers for Disease Control (CDC) which depict obesity levels on a state by state basis: the first in 1985 and the second, a generation later in 2008.

Clearly, obesity has exploded into a pandemic in just a single generation.

Interestingly, all the usual explanations--the rise of fast foods, women joining the workforce and thus the decline of the home-cooked meal and the decline of physical labor jobs--fail to explain the dramatic increase for the reason that all these conditions were already present in 1985.

Women had already joined the workforce en masse, fast-food outlets were already on every corner and jobs requiring hard physical labor had already dwindled to a small percentage of our post-industrial, service-dominated economy.

So what is different between 1985 and the present? At least one factor is the increased consumption of sugary beverages--soda, specialty coffees, iced teas, fake "juices" (colored sugar water with 10% actual fruit juice)--and the addition of HFCS to everything from snacks to breakfast bars to canned soups.

As a consequence, consumption of fructose (both "natural" and high-fructose corn sweetener, HFCS) has skyrocketed.

Reader R.W. recently submitted this account of his own family's experience, and what they discovered by consulting with one of the nation's leading experts in Pediatric Endocrinology.

I’ve attached a YouTube film of a lecture by Dr. Robert Lustig, head of Pediatric Endocrinology at UCSF Medical School. This is an explanation of the biological--and political--mechanism that causes obesity and Type 2 diabetes, and why they’ve become an epidemic.We were fortunate to find Dr. Lustig when my younger son, Pat was an adolescent. Pat was a very heavy boy who gained weight despite being vigorously active (for example, he played water polo year round) and really not eating that much. I finally persuaded Pat’s pediatrician that there was something wrong with the boy’s metabolism. Pat’s blood test showed he had cholesterol and triglyceride counts that would be extreme for an obese 60-year-old--into the high 300’s. 

There were no pediatric endocrinologists in our area at that time, so we were sent to UCSF. Dr. Lustig enrolled Pat in a study which I think is still ongoing. The upshot: cut out all fructose, and obesity and all its symptoms subside.
Pat, now 20, weighs 25 pounds LESS than he did in the 8th grade, although he is six inches taller. People literally do not recognize him. It is a very gratifying and amazing transformation. It was simple, but not easy. Pat worked very hard, and for a while was assisted with metformin. (He is now off the drug, and shows no ill effects or relapsed weight gain or high cholesterol or triglycerides.) But mostly it was about shunning all fructose, especially in drinks. 

Fructose is addictive for the same reasons, by the same mechanisms, and producing many of the same pathologies as alcohol, as Dr. Lustig explains in the lecture. One of his catch phrases is: “Fructose is alcohol without the buzz.”
It’s 90 minutes. Stick with it. It’s a little dense in spots, but overall, it is a compelling story. Dr. Lustig puts it all in context. I know he and Michael Pollan are aware of each other, though when I asked him he said they haven’t had any formal collaboration. But their views of our food delivery system are totally aligned.
I’m hoping that once you see this, you will feel that it deserves a wider audience.

Sugar: the Bitter Truth (University of California TV)

Here is the puzzle: Everyone agrees that "empty calories" contribute to obesity, and many see simple carbohydrates as the key cause of obesity.

On the other hand, I personally know many slim, healthy Asians whose diet is based on white rice and processed-flour noodles--the very sort of simple carbs that are supposed to make us all fat. Yes, they also eat small portions of fish and meat and significant quantities of vegetables, but you can't get away from the fact that much of their caloric intake comes from processed carbohydrates.

The famous Mediterranean Diet is based on pasta as well as olive oil, fish, vegetables and wine: The Island Where People Forget to Die:

She found that her subjects consumed about six times as many beans a day as Americans, ate fish twice a week and meat five times a month, drank on average two to three cups of coffee a day and took in about a quarter as much refined sugar — the elderly did not like soda. She also discovered they were consuming high levels of olive oil along with two to four glasses of wine a day. 

Social structure might turn out to be more important. In Sardinia, a cultural attitude that celebrated the elderly kept them engaged in the community and in extended-family homes until they were in their 100s. Studies have linked early retirement among some workers in industrialized economies to reduced life expectancy. 

In Okinawa, there’s none of this artificial punctuation of life. Instead, the notion of ikigai — “the reason for which you wake up in the morning” — suffuses people’s entire adult lives. It gets centenarians out of bed and out of the easy chair to teach karate, or to guide the village spiritually, or to pass down traditions to children. The Nicoyans in Costa Rica use the term plan de vida to describe a lifelong sense of purpose. As Dr. Robert Butler, the first director of the National Institute on Aging, once told me, being able to define your life meaning adds to your life expectancy.

If carbs were the sole cause of obesity, then the Asians I personally know who probably get up to 60% of their calories from white rice or white-flour noodles should be grossly obese--instead, they're thin. (They only get fat if they live in the U.S. and start eating an American-style diet.) How do we explain this paradox?

I recently corresponded with David B. Collum, Professor of Chemistry at Cornell University, who noted two potentially important factors:

I was in Germany a month ago and noticed (1) the grocery stores no longer look like markets but rather supermarkets with all the brightly colored packages of processed food, and (2) the Germans are getting fat. 

I am wholly convinced now that hidden carbs--not the potatoes and rice but the carbs in the processed foods--are what is putting on the pounds. After months of pondering why I was struggling to control weight despite some effort and listening to an econtalk podcast on the evils with carbs (and containing a nice dose of real biochemical flavor to the discussion), I dropped the carbs and dropped 30 lbs within 6 months. 

In this Econtalk podcast (time: 1:20) Taubes on Why We Get Fat, author Gary Taubes presented some interesting rat studies along with the following model: (1) carbs trigger insulin, (2) insulin triggers fat deposition, (3) insulin with carb depletion triggers carb craving (after dinner foraging). I think the complex vs simple carb issue finally makes sense to me also. Simple carbs spike the insulin but the complex carbs are released more slowly and thus spike the insulin less. We eat carbs AND fat with the carbs sending the fat to the muffin top. The Asian diet may be carb-rich/fat poor.

I think there is plenty of evidence to support these two points:

1. That there are significant amounts of simple carbs (HFCS etc.) "hidden" in the processed foods Americans consume in quantity, and

2. It is the ratio and type of fats and carbs that generates weight gain, not carbs alone--that is, a carb-rich, low-fat diet based on legumes and vegetables typical of traditional Asian diets does not lead to obesity, even though the carbs consumed are simple/processed white rice and white-flour noodles.

I would add a third factor, which is the paucity of vegetables, fruits and legumes in the American diet. Just avoiding carbs does not make one healthy.

It's not just avoiding carbs that counts, it's avoiding all processed foods and sugar-laden beverages.

Lastly, let's not forget exercise, which dramatically alters our metabolism, blood sugar and psyche. Cutting our processed foods and simple carbs (empty calories) is only the first step--the second equally important step is getting fit via daily or almost-daily exercise of the sort that builds muscle mass and endurance. People who live long healthy lives are always on the move, and are doing so with purpose.

Resources:

Gary Taubes' books:

Why We Get Fat: And What to Do About It

Good Calories, Bad Calories: Fats, Carbs, and the Controversial Science of Diet and Health

This book presents evidence that vegetables and complex carbs are essential, meat less so:

The China Study: The Most Comprehensive Study of Nutrition Ever Conducted and the Startling Implications for Diet, Weight Loss and Long-Term Health

These articles were written by a physicist who decided to investigate/experiment via his own weight loss program:

The Physics Diet

On Gluttony

NOTE: I will be taking a few days off from online work, so I will be unable to respond to email. Thank you for your understanding. 

---

SPECIAL OFFER ON GREEN COFFEE BEANS FOR LONG-TERM STORAGE FROM EVERLASTING SEEDS: Here is a note from ES's founder: "I've successfully stabilized green coffee beans for a period of six years and still had them roast up to within 90-95% of their 'new' bouquet, smoothness, and flavour characteristics. We've finally got all of the odds and ends together, along with the best 'stove top' roaster {Whirley Pop} that we're found. The coffee beans are all 100% Organic: Peruvian, Colombian, and Guatamalean in two sizes, 1 lb. And 5 lbs. the sealed cans contain a small 'Roasting Guide' that gives basic instructions, roasting times and temps, etc. This is, by necessity, only a brief intro with the essential information, as it has to fit into our smaller, 'chowder' size can.

It's taken me nearly ten years to experiment, wait, and finally find a method that would preserve the bean's natural flavours and oils. The other thing that suggested itself to me is that I can think of few things, outside of the obvious 'necessities' {Bible, beans, bullets} that would be more valuable, command a higher price, and be virtually instantly 'tradeable' anywhere, anytime after an 'event': coffee is, in a multitude of ways, our latter day 'comfort food.'"

---

My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart:

1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economyComplex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.

10% discount on the Kindle edition: $8.95(retail $9.95)       print edition: $24 on Amazon.com
To receive a 20% discount on the print edition: $19.20 (retail $24), follow the link, open a Createspace account and enter discount code SJRGPLAB. (This is the only way I can offer a discount.)

---

Thank you, Erle H. ($36.72), for your wondrously generous contribution to this site -- I am greatly honored by your support and readership.

Thank you, Michael V. ($60), for your superbly generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Read more...

Have Tax Revenues Topped Out?

Efforts to collect more taxes fail because people adjust their behavior accordingly.

Amidst all the "fiscal cliff" talk of raising tax rates, few dare to ask: have tax revenues topped out?

How could tax revenues decline as rates go up? Easy: people modify their behavior in response to whatever incentives and disincentives are present.

Make mortgage interest deductible and people will rack up huge mortgages. Reduce the yield on savings to near-zero (thank you, Federal Reserve) and people will save less.

Raise tax rates and people will lower their income or move to low-tax locales. As the saying has it, "Money goes where it is treated well."

Supporters of higher rates tout studies that find upper-income taxpayers shrug off higher rates, staying put in high-tax states: Do High Taxes Chase Out The Rich? and Superrich stay put in high-tax states like California.

On the other side of the ledger is this study from Britain: Two-thirds of millionaires left Britain to avoid 50% tax rate.

Which view is correct? Both, as a result of different dynamics. There are at least four separate dynamics in play.

1. The professional class is often "captured" and cannot move. For tax purposes, households with incomes of $500,000 and up are considered wealthy, i.e. above middle class incomes. Many of these people are self-employed or professional such as doctors and attorneys.

In theory, they could move to lower-tax states or nations, but their practice or enterprise is often local--pulling up stakes would mean sacrificing their high income which is the result of years or decades of networking and building local social capital.

Many of these high-earners are also trapped by their demographics: their kids are relying on their high incomes to pay their college costs, and aging parents may rely on their proximity and income.

Moving away is simply not an option for these high earners. So it's not that these professionals approve of higher taxes, they just don't have any practical alternative.

2. What self-employed high earners can do is lower their earnings. If the threshold is $250,000 each, then they will lower their taxable income to $245,000. Those with S corporations, limited liability corporations, etc. have legal ways to lower their taxable income while retaining the benefits of their entity's income.

For example, maybe the corporation will buy a live/work loft as an office, eliminating the owner's personal mortgage. The corporation effectively pays the mortgage, meaning their earned income can drop significantly.

Others will choose to work less. Why work so hard just to pay more taxes? Refuse work, cut your hours, enjoy life more.

3. The super-wealthy have the means to transfer income and wealth to lower-tax nations and pursue legal loopholes in the U.S. tax code. Those households making a mere $500,000 rarely have the financial wealth or firepower to justify the costs of hiring big-bucks tax attorneys and moving their assets and operations overseas.

This is the primary difference between high earners and the truly wealthy: the merely well-paid have fewer incentives to establish a legal enterprise overseas and deal with the complexities of the U.S. tax code, which considers all income from all sources to be taxable U.S. income.

For example, a wealthy U.S. citizen may earn $10 million a year, but by buying a villa and establishing a corporation in a low-tax nation, they can legally lower their tax rate on income earned or declared in the low-tax nation. By expensing all sorts of things against their U.S. income, they can effectively pay the U.S. rate on a small portion of their earnings while sheltering 90% overseas in perfectly legitimate ways.

Shifting assets and income streams to shelter income is de rigeur. The wealthy have more opportunities to do so, and so it is unsurprising that they would take those opportunities.

The wealthy and corporations are used to juggling tax code complexities and international assets/declared income; they have to do this to maximize shareholder value. Jacking up rates basically impacts the "captured" professionals and small business owners who have large earned incomes.

At some point many of these people will decide to sell out, retire, or drastically trim their enterprise to avoid working hard just to pay more taxes.

4. These basic avoidance strategies--earning less money and moving income and assets to lower-tax nations--are already common and relatively easy for those with control of their incomes and assets. Tax avoidance is universal, which is why tax increases always raise less money than linear projections anticipate.

If the sales tax or VAT goes up, people buy less retail and buy more on the cash-black market. The wealthy are simply doing the same thing on a larger scale.

Those with an interest in technical analysis may discern a topping pattern in this chart of tax receipts. It looks like the resurgent tax receipts of the QE/stimulus era will top out and roll over as the global recession deepens in 2013, forming a lower high.

We can anticipate a stairstep down pattern as tax receipts decline, new tax increases bump up revenues for a brief time and then people respond with more tax avoidance and tax revenues will resume their decline.

Various studies have found that Federal tax revenues top out just above 20% of total household income, regardless of the era or nominal tax rates. Recall that in many high-tax economies, up to 50% of the economic activity occurs in the informal/black market.

When tax rates are high, people move their consumption and enterprise into the cash informal economy and only pay taxes on half their total income. This is one way that people limit the amount of taxes they pay to around 20%, regardless of the nominal tax rate.

Efforts to collect more taxes fail because people adjust their behavior accordingly.Linear projections of rising tax revenues always fail to account for this easily predictable behavioral response.

I have addressed these issues many times:

Will "Tax the Rich" Solve Our Deficit/Spending Crisis? (December 28, 2011)

The Future of America Is Japan: Runaway Deficits, Runaway Debts (October 15, 2012)

About Raising Taxes as the "Solution" to the Fiscal Cliff.... (October 26, 2012)

The Fiscal Cliff and the Grand Bargain (November 28, 2012)

NOTE: I will be taking a few days off from online work, so I will be unable to respond to email. Thank you for your understanding. 

---

SPECIAL OFFER ON GREEN COFFEE BEANS FOR LONG-TERM STORAGE FROM EVERLASTING SEEDS: Here is a note from ES's founder: "I've successfully stabilized green coffee beans for a period of six years and still had them roast up to within 90-95% of their 'new' bouquet, smoothness, and flavour characteristics. We've finally got all of the odds and ends together, along with the best 'stove top' roaster {Whirley Pop} that we're found. The coffee beans are all 100% Organic: Peruvian, Colombian, and Guatamalean in two sizes, 1 lb. And 5 lbs. the sealed cans contain a small 'Roasting Guide' that gives basic instructions, roasting times and temps, etc. This is, by necessity, only a brief intro with the essential information, as it has to fit into our smaller, 'chowder' size can.It's taken me nearly ten years to experiment, wait, and finally find a method that would preserve the bean's natural flavours and oils. The other thing that suggested itself to me is that I can think of few things, outside of the obvious 'necessities' {Bible, beans, bullets} that would be more valuable, command a higher price, and be virtually instantly 'tradeable' anywhere, anytime after an 'event': coffee is, in a multitude of ways, our latter day 'comfort food.'" 

---

My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart:

1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economyComplex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.

10% discount on the Kindle edition: $8.95(retail $9.95)       print edition: $24 on Amazon.com
To receive a 20% discount on the print edition: $19.20 (retail $24), follow the link, open a Createspace account and enter discount code SJRGPLAB. (This is the only way I can offer a discount.)

Thank you, Hugh W. ($5/month), for your most-excellently generous subscription to this site -- I am greatly honored by your support and readership.

Thank you, Steven C. ($120), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Read more...

Pursuing Opportunities of the Past

Pursuing opportunities of the past only speeds the dissolution of any Status Quo that depends on spent models of growth.

If we had to summarize the global effort to reflate various debt and asset bubbles to "restart growth," we might say the Status Quo is pursuing opportunities of the past.

Let's start with investing in real estate. Retail space is in massive oversupply. Others have done an excellent job describing the overcapacity, high vacancy rates and cannibalizing of sales at existing stores by adding stores: Are you seeing what I'm seeing?

Suffice it to say that an era of deleveraging, declining household income and aging populace is not a good foundation for retail expansion.

The wave of creative destruction unleashed by the Internet has yet to envelop commercial office space--but it's already reached the front steps. Just as online retail has decimated retail sectors such as bookstores, the Web is busy revolutionizing white-collar work, the mainstay of office towers and business parks.

Real work can now be done offsite/remotely at a home office, café, or anywhere but a cubicle at headquarters, and the cost advantages of this flexibility will not be going away. Yes, there are still powerful reasons to meet in person, but there are equally powerful reasons to permanently downsize travel and office costs.

Structural changes in the economy are increasing self-employment and contract labor and shrinking the scale of new enterprises. Millions of well-educated American workers already work at home, and since the average U.S. house has grown in size over the past 50 years, free-lancers and self-employed professionals have plenty of space rent-free.

High-growth companies which once hired thousands of employees and rented entire buildings are increasingly offer highly automated products and services. New-tech juggernaut Twitter recently leased more space in San Francisco as it was expanding its staff by--gasp!--200 employees. Will Twitter be filling that empty office tower near you? No, because its "service" is largely automated software. It now requires less than 1,000 employees to operate a global tech juggernaut.

Many global companies no longer need a headquarters; their senior staff work just like junior employees, from home, hotel room, cafe, etc. Airbnb, Coursera and Uber: The rise of the disruption economy.

The "recovery" in housing is limited for structural reasons. Household formation is in a multi-decade downtrend, household income is also in a structural decline since 2000 and trillions of dollars in subsidies and giveaways have barely budged the needle of housing sales, starts, etc.

Buy and hold stocks: adjusted for inflation, returns on the "buy and hold stocks forever" strategy since 2000 registered a 14% loss, as we see in this chart, courtesy of master chartist Doug Short:

The "buy and hold bonds" strategy is also running out of air. Now that interest rates are zero or negative when adjusted for inflation, there are limits on how much bond yields can decline. This game may run for for awhile but the returns from here until the day rates rise in a "credit event" are modest. Not only have the low-hanging fruits been picked in the 31-year bond bull market, those buying now are stripping the last fruit from the top of the tree.

What happens to those who buy into opportunities of the past? As a guide, we can see what happened to household net worth since the 2007-8 global financial meltdown ended the financialization era: American Households Hit 43-Year Low In Net Worth.

Pursuing opportunities of the past only speeds the dissolution of any Status Quo that depends on spent models of growth. 

---

SPECIAL OFFER ON GREEN COFFEE BEANS FOR LONG-TERM STORAGE FROM EVERLASTING SEEDS: Here is an explanatory note from ES's founder: "I've successfully stabilized green coffee beans for a period of six years and still had them roast up to within 90-95% of their 'new' bouquet, smoothness, and flavour characteristics. We've finally got all of the odds and ends together, along with the best 'stove top' roaster {Whirley Pop} that we're found. The coffee beans are all 100% Organic: Peruvian, Colombian, and Guatamalean in two sizes, 1 lb. And 5 lbs. the sealed cans contain a small 'Roasting Guide' that gives basic instructions, roasting times and temps, etc. This is, by necessity, only a brief intro with the essential information, as it has to fit into our smaller, 'chowder' size can.It's taken me nearly ten years to experiment, wait, and finally find a method that would preserve the bean's natural flavours and oils. The other thing that suggested itself to me is that I can think of few things, outside of the obvious 'necessities' {Bible, beans, bullets} that would be more valuable, command a higher price, and be virtually instantly 'tradeable' anywhere, anytime after an 'event': coffee is, in a multitude of ways, our latter day 'comfort food.'"

---

My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

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Things are falling apart--that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart:

1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economyComplex systems weakened by diminishing returns collapse under their own weight and are replaced by systems that are simpler, faster and affordable. If we cling to the old ways, our system will disintegrate. If we want sustainable prosperity rather than collapse, we must embrace a new model that is Decentralized, Adaptive, Transparent and Accountable (DATA).
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.

10% discount on the Kindle edition: $8.95(retail $9.95)       print edition: $24 on Amazon.com
To receive a 20% discount on the print edition: $19.20 (retail $24), follow the link, open a Createspace account and enter discount code SJRGPLAB. (This is the only way I can offer a discount.)

Thank you, Venkatesh P. ($5/month), for your extremely generous re-subscription to this site -- I am greatly honored by your continuing support and readership.

Thank you, Scott C. ($120), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

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Part 29: An Allergic Change of Plan

Here is this week's chapter of my serialized comic novel "Four Bidding For Love."(Those who find absurdist humor and adult situations offensive, please read no further.)

     "This is how friends treat you in your hour of desperate need," he scowled as Kylie drove away. "Dump you on somebody else."
     Ross's snarling ingratitude pushed Robin's mood over a cliff, and he snapped, "Look, if it wasn't for Kylie, I wouldn't be offering you a place to stay. Maybe you'd like the homeless shelter better."
     "Nice," Ross sneered. "I'm burned out of the only home I have and because I'm not all warm fuzziness, I get a lecture from Mr. Minivan."
     "Wait til you see the spacious luxury Mr. Minivan lives in," Robin replied hotly. "You'll find out first-hand because that's where you'll be staying: my studio."
     "Excellent," Ross said, brightening. "I thought I was being stuck in a spare bedroom."
     "No, I'm being stuck in the spare bedroom."
     Ross glanced at the dejected face of the younger man and clapped his hand on Robin's shoulder. "Hey, I'm sorry. I didn't realize you were putting yourself out for me. Kylie's a good egg, but she didn't tell me anything,"
     "She doesn't know anything," Robin said tartly.
     "Well, Great Zeus, let's get my collections packed up and get a move-on. If we hurry, maybe we can leave before Vonda comes back from the market."
     As the two mounted the steps, Robin asked, "How did you manage on her sofa?"
     Ross flashed a wary grin. "I slept like a baby. I woke up every hour and cried my guts out. No, Vonda was very nice. She talked half the night, and her voice was very comforting. It drowned out everything."
     With the sharp incentive of avoiding Vonda, the two men made quick work of loading Ross's kitchen appliance collection, plastic-bound magazines and what few items of clothing had been salvaged from the waterlogged remains of his room—his Chinese smoking jacket, a canary-yellow shirt, a pair of black jeans and little else— and headed across the bridge to the big Victorian on Green Street.
     "I understand you don't like cats," Robin said as they carried the first load of belongings up the walkway to the stately home's steps.
     The gardener had just mowed the tiny patch of sideyard lawn, for the air was scented with freshly cut grass. Setting his boxes down, Ross leaned over to smell the Lady Banks climbing yellow roses which were blooming in mad profusion on the trellis beside the house. "It's not that I don't like them," Ross explained. "I'm allergic to cat hair, and none of the allergy medications help."
     Robin swung open the door to his modest studio and Ross nodded favorably. "This is wonderful. About the same size as my room." Robin wanted to add, Without ten tons of junk, but held his tongue. "Hello, Dorothy," he said, and the long-haired black cat emerged from behind his sofa bed to peer in wide-eyed curiosity at the stranger.
     "She's very undemanding," Robin said reassuringly, and then returned to his van for another load of Ross's possessions.
     Opening his phone, Ross punched a saved number and then sneezed while awaiting the response. "Hi, Kylie," he said. "Guess you're still in the interview. I just wanted to invite you over to see my temporary quarters. It's at Robin's place, the first floor door by the front staircase. You already know the house. Come by this afternoon—it's Friday, let's celebrate. Oh, and bring some wine."
     Ross snapped the phone shut and went out to the van to help Robin. As he followed Robin into the studio with another armload of plastic-wrapped collection-quality Liberation magazines, he sneezed again—not once, but again and again in an uncontrollable fit of immune rejection.
     Ross withdrew outside and turned in red-eyed misery to Robin. "I'm sorry, but it looks like I am horribly, irrevocably allergic to your dear little cat." As if to emphasize his point, Ross sneezed so violently that the spray caught a thoroughly disgusted Robin full in the face.
     "I'm allergic to some things, too," Robin replied, and then thought, well, here we go; this whole misadventure is already bollixed.
     "How about if I move into the spare bedroom upstairs, like you originally planned?" Ross asked.
     "There's a cat upstairs, too—Hanover. I'm taking care of him while the owner is gone."
     "Is Hanover short-haired?"
     "Yes."
     "If the bedroom has a door, then I'll be fine," Ross declared. "So when does the owner return?"
     "In about two weeks," Robin replied glumly, for he was pondering just how furious Alexia would be to discover her toaster tormentor was happily ensconced in her spare bedroom.
     "Don't worry, I'll be out in ten days," Ross assured him, and then sneezed with frightening force. "Great Jupiter, I hope I don't bust a rib," he moaned, and Robin cringed, thinking, Yes, by all means, let's add a medical emergency to this disaster. And all to impress a girl who's already dumped me.

Next: "I have a huge weak spot for sexy neurotics." 

To read the previous chapters, visit the "Four Bidding For Love" home page.

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My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts. 

Read more...