Choose One: Housing Is Shelter, or Housing Is Just Another Asset in a Bubble Economy

Those seeking housing as shelter cannot compete with wealthy households and entities seeking places to park credit-generated capital for income and/or appreciation.

This will get massive pushback because it's true: either Housing Is Shelter, or Housing Is Just Another Asset in a Bubble Economy--it can't be both. This reality gets pushback because the conversion of housing from shelter into just another asset bubbling higher in a bubble-dependent economy has been so profitable for those inflating the bubble.

The basic pushback goes like this: housing has always been an investment, nothing has changed. This is classic misdirection. This is like saying "stock market options have always been a way to hedge positions" to justify the transition from hedging to extremes of gambling, i.e. zero-day expiration options (ODTE).

Whenever I suggest that housing is being hoarded by the wealthy and corporations as a low-risk asset to park credit-generated capital, I get pushback: no, I'm told, the percentage of housing that's empty most or all of the year owned by the wealthy and corporations is tiny, as is the percentage of housing owned as short-term vacation rentals (STVRs).

The problem with these claims is they're based on completely fraudulent / inaccurate statistics. There is no regulatory system that audits whether owners who obtained "owner occupied" mortgages actually live in the dwelling, or whether owners (especially those hidden behind LLCs and other cloaking mechanisms) are "owner occupants" as claimed.

Owner-Occupancy Fraud and Mortgage Performance (Philadelphia Federal Reserve) Occupancy fraud has been suggested as a contributor to the housing bubble. We show it was pervasive and remains present.

In other words, even the most cursory audits find significant percentages of "owner occupied" housing is vacant most or all of the time or is an unregistered short-term vacation rental. Anecdotally, many upper-middle class households own not just vacation / second homes in rural locales but "investment" homes that are empty or they use occasionally in urban areas, which due to high demand / valuations are hoarded because selling them in a bubble economy means the sellers will be unable to buy back into the market in the future.

The "monetize your empty room" AirBnB idea that began the short-term vacation rental market has transmogrified into a monster consuming the housing market in resort locales. Surveys have found that 15% or more of all available housing in resort locales is now absentee-owner short-term vacation rentals, and two-thirds of condominium buyers are out-of-state.
STVRs Have Destroyed America's Resort Towns

Some argue this doesn't matter because resort housing tends to be in rural regions with few jobs. It matters to local residents who are priced out. But "investment" housing isn't limited to resorts; there are an unknown but consequential number of vacant / STVR "investment" housing units in urban areas with jobs and strong demand for permanent housing.

Cities with rent control such as San Francisco and New York have renters who keep their low-cost flat vacant while living abroad. Since the rent-controlled apartment cannot be replaced once it's surrendered, it makes sense to hoard the rental for future or occasional use. Again, there is no system of auditing who actually lives in a dwelling as a permanent resident, as this is viewed in the US as an invasion of privacy.

(In Japan, local authorities keep close tabs on who is actually living in every dwelling as a matter of course. When we stayed in a friend's temporarily vacant flat for a few days, officials came to the door to check on who we were.)

The monetary policies of suppressing interest rates and expanding credit have favored the wealthy who have the income to support additional mortgages and the need to park their expanding capital somewhere. Housing is attractive because it's less volatile than the stock market and offers higher appreciation in a bubble economy than bonds.

Those seeking housing as shelter cannot compete with wealthy households and entities seeking places to park credit-generated capital for income and/or appreciation. In a bubble-dependent economy, there's no need to go through all the trouble of renting an empty dwelling, as the appreciation alone makes the investment worthwhile. Renting out an "investment" incurs risks and costs that are best avoided--unless the property generates a hefty profit as a remotely managed unregistered short-term vacation rental.

Once again, the pushback is pushback against inconvenient truths that threaten the ownership class that has reaped gains from housing as an asset class in a bubble economy. It's now evident that large corporate owners of thousands of rental units have used predatory pricing--oops, I mean dynamic pricing--to jack up rents in markets they are dominant players in; once the price point is set higher, small landlords push up their rents to the new "market price."

In a non-bubble economy, credit is scarce and expensive, and so asset bubbles can't be inflated as credit inflates. As credit inflates, the pool of money sloshing around seeking a low-risk home for safety and appreciation expands, and this pool sloshes into housing, driving home prices and rents out of reach of those whose income is wages, not wages plus capital-generated income.

Bubbles in housing generate artificial scarcity, scarcity not in the total number of dwellings but in the number of dwellings available and within reach for those seeking shelter, i.e. whatever is left after wealthy households and corporations with access to credit snap up housing as a low-risk place to park capital that offers tax benefits and appreciation.

Housing affordability has reached historic lows.



Housing payments have reached historic highs.



The wealthiest 10% have used their income and credit to bid up assets which bubble higher in bubble-dependent economies.



So here's the truth: we can choose housing as shelter or housing as an asset in a bubble economy, but we can't choose both. Housing as an asset in a bubble economy pushes housing out of reach of those seeking shelter.

And of course there's pushback against the truth that ours is a bubble-dependent economy. For a definitive answer, let's see how well the economy is doing after all the credit-asset-speculative bubbles pop and decline back to their starting point.




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AI Data Centers Are Not the Railroads of Today

The AI boom shares all the risk profiles of previous speculative manias but lacks society-wide benefits while generating fast-metastasizing negative consequences and costs.

The idea that the current bubble in AI data centers is an echo of the railroad-construction bubble of the 1870s is appealing--but only half-right. The completion of the first transcontinental railroad in late 1869 sparked a speculative mania of raising capital to build railroads, which were seen as "can't lose" investments in a technology that lowered transport costs from $1 to ten cents.

But not all routes had the potential to become profitable, and the resulting collapse of the railroad bubble devastated the developed-world economies, triggering a deep economic downturn from 1873 to 1879 that was called "The Great Depression" at the time (or "The Long Depression").

The term for speculative frenzies channeling vast sums into investments with difficult-to-assess risk profiles is mal-investment, and mal-investment on a large scale triggers financial panics and economic depressions in a well-understood feedback loop.

Money invested in digging a mine that doesn't yield any gold can't be recovered. That capital is gone. There is an opportunity cost to every investment: that capital could have been invested in something else that was more productive than the speculative bet on something with unclear risks and payback.

As the scale of losses become apparent, credit tightens and the pool of capital available shrinks. Short-term loans that can't be rolled over into longer duration loans trigger bankruptcies which quickly lead to bank runs (financial panics) and layoffs as businesses close. This decline in wages, revenues and the velocity of money is self-reinforcing, and the recovery process--being both financial and psychological--takes years.

The parallels with the AI speculative investment mania are obvious. Just as any railroad was viewed as guaranteed to be immensely profitable because railroads generated enormous efficiencies that reduced costs, all AI is guaranteed to be immensely profitable because AI generates enormous efficiencies that reduced costs. But in the real world, use cases for specific railroads and AI applications are stretched along a spectrum which isn't visible in the early stages of a speculative boom.

Individual use cases don't automatically guarantee an entire class of use cases will be successful. That one railroad--or application of AI--profitably reduced costs does not necessarily extend to all railroads or AI applications.

Nobody wants to wait around for the long process of sorting which use cases are actually beneficial and which are mal-investments, as the big money is made by making big bets in the early days. Human greed is a remarkable force, especially when combined with self-serving hype and the euphoria of the herd running.

In the current confluence of greed, hype and euphoria, the possibility that the inevitable aftermath of vast mal-investment is a Great Depression doesn't exactly resonate. AI isn't a railroad, it's the most amazing force in the Universe, etc. This is Wetware 1.0 in action: the psychology of speculative frenzies doesn't change, and so here we are--again.

Those are the parallels of the railroad mania of the 1870s and the current AI mania. But that's only half the story. Railroads did dramatically lower costs, turning unprofitable ventures into profitable ventures not by reducing production costs but by reducing transport costs, which prior to railroads might equal production costs.

The differences between railroads and LLM / generative AI are significant. While many railroads went bankrupt when the bubble burst, those that actually served expanding markets were eventually put to use as the tracks were still useful many years after being laid. A new locomotive type might enter service decades later, but the tracks remained useful and valuable for decades--with proper maintenance. The rails were not obsoleted every few years, nor did the the entire rail lines have to be replaced every few years.

AI is not permanent. It is constantly being obsoleted. A new class of lower-power consumption chips could obsolete the current class of AI chips, requiring a mass replacement of the entire processing foundation of AI. Innovations in software could reduce the processing demands, turning existing data centers into expenses rather than profit generators. AI software that users download onto their own computers negates the need for "renting" data centers (i.e. buying processing power with tokens) by generating models from the user's own data. These are just a few potential forces undermining the utility, lifespan and profitability of the current build-out of data centers.

While the cost structure of railroads were relatively straightforward, the costs of AI are complex and difficult to assess as initial costs are not total ownership costs, as maintenance expenses are still unfolding and future costs of resources and energy are trending higher.

While the cost reduction and efficiency benefits of depending on AI are as yet unclear, the costs of sorting "good AI" from "bad AI" are already mounting as real-world expenses. The market continues to underestimate the AI slop problem and what it means for enterprise adoption and spending.


Create enough hallucinated legal arguments, flawed engineering calculations and backdoor-ridden code, and the slop vats fill faster than our capacity to tell good work from bad, writes Tim Harford. How can we tell good AI from bad? (Financial Times)

Cedar Owl recently published a comprehensive overview of the Total Costs of Ownership of AI / Robotics and concluded they may exceed the costs of human employees. Will the cost of an AI Robot be higher than the salary of a Human Employee? AI Robot vs. Human Worker Total Cost of Ownership (cedarowl.substack.com)
"AI didn't remove cost--it changed where the cost lives."

As for profitable use cases, it's too soon to tell. Individual cases don't necessarily scale to the entire sector or economy. The hype is AI is scalable and applicable everywhere, but this isn't what real-world experience is finding.

Unlike railroads, whose cost-reduction benefits were immediate and measurable, the sum total of AI benefits is not just unclear but potentially negative. The negative effects of AI slop and malicious applications are already visible but the full consequences of their expansion cannot yet be determined.

Recent polls reveal a profound skepticism in the younger generations whose lives will be most impacted by AI. Gen Z Is Using A.I., but Doesn't Feel Great About It. Only 15 percent said they saw A.I. as a net benefit.



The structural limits of AI are equally visible but the full consequences of these multi-factor limitations cannot yet be determined. A recent article in Scientific American summarized one key limitation: the illusion that AI is "thinking," "understanding" and "reasoning": AI and human intelligence are drastically different--here's how:
"They are extraordinarily powerful tools when used as what they are: engines of linguistic automation, not engines of understanding. They excel at drafting, summarizing, recombining and exploring ideas. But when we ask them to judge, we unintentionally redefine judgment--shifting it from a relation between a mind and the world to one between a prompt and a probability distribution."

There are many other structural limitations whose nature limits "quick fixes." "To grow skills, people need to go through hardship. They need to develop the muscle to think through problems," he said. "How would someone question if AI is accurate if they don't have critical thinking?"

"This is the contradiction that has many AI boosters talking out of both sides of their mouths: The use of coding agents is actively diminishing the very skills needed to effectively manage the coding agents." (via Manoj S.)

CEOs are quietly realizing the AI replacement plan has a problem. Two problems, actually.
"One: the token costs for running AI agents are now exceeding what they were paying the employees they fired.

Two: when the tokens run out, the AI stops. Just stops. No continuity. No workaround. Just a spinning wheel where your workforce used to be."

AI coding frontloads one form of productivity by backloading the entire system with higher maintenance costs down the line. These costs are not visible in the initial phase, and by the time they're piling up, it's too late to reverse these structural costs.



The sums invested in AI data centers--and committed to planned data centers--are on a large enough scale that even the most robust economy is vulnerable to disruption when the revenues needed to justify these extraordinary sums fail to materialize and the total operational costs and costs of ownership become measurable.



Matt Stoller offered an apt analogy of AI data center capital investments:

But in a sense, the entire AI narrative is a bit like selling huge amounts of picks and shovels as everyone rushes to the mines, and then betting there will be gold when they all start digging. Much of the stock market is made up of investor speculation that pick and shovel companies are about to hit the motherlode. But we don't actually know how much gold there is, or even if there is any gold at all. So far, every powerful and rich person has insisted that there's so much gold we can't imagine it all, and anyone who thinks otherwise is a Luddite Marxist loser."

Perhaps most importantly, once we subtract the hype, there is no evidence-based answer to the question: will our society / the public benefit from AI? Or are all the proposed benefits of reducing costs and generating innovations concentrated in the hands of AI's owners and corporate users?

Cui bono--to whose benefit? What's being touted as beneficial to all--equivalent to railroads--is at this point only beneficial to owners and monopolistic-cartel corporations, the very asymmetry that is fast undermining the foundations of our social and economic systems.

Put another way: is AI actually solving the core problems undermining our society and economy--systemic asymmetries of costs, wealth, power, agency and opportunity--or is AI adding new problems--brain rot, dependence on black box systems owned by a handful of tech corporations, AI slop, deepfakes, and a tsunami of malicious AI?

For all these structural reasons, AI data centers are not the railroads of today. The AI boom shares all the risk profiles of previous speculative manias but lacks society-wide benefits while generating fast-metastasizing negative consequences and costs.


My book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free)


Become a $3/month patron of my work via patreon.com

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Could Instability Trigger Radical Change In Your Life?

I propose that the world is upside down, that the way we live is the opposite of what we're told it is: we don't experience Progress, we experience Anti-Progress.

My five most recent essays (listed below) lay out an account of the present era that is radically different from the conventional narrative.

It's worth noting that my writing is not "validated by credentials so you should listen to this person" or by data-based claims that "he called the exact top and bottom of the market and has beaten the market indices for 27 years." The foundation of my work is the text either validates or invalidates itself by its sources and reasoning and is best read as "written by anonymous."

If you decide on the validity of the text based on the author's credentials and investment track record, there are hundreds of PhD economists to follow and thousands of accredited financial advisors to consult--or consult Warren Buffet's annual reports, as his investment track record speaks for itself.

The trust we place in these validations based on credentials and past data rests on a continuation of the conventional status quo, i.e. recency bias, the belief that the recent past is a trustworthy guide to the future because everything is stable and predictable.

And since everyone making their livelihood off the status quo has a built-in incentive to assume it's stable and predictable, there is no advantage to entertaining possibilities outside this context.

This is the basis of assessing texts and ideas on their own merits rather than trusting the author will be correct this time because they are certified experts and/or they were right about things in the past. Trusting recency bias and credentials works well if the system is indeed stable and predictable. If it's not, then letting the ideas speak for themselves becomes the way to widen our survey of potential futures.

I propose that the world is upside down, that the way we live is the opposite of what we're told it is: we don't experience Progress, we experience Anti-Progress. We don't live in an economy that optimizes value to compete for our dollars; we live in an economy that optimizes eliminating competition to maximize extraction. All the technologies of AI aren't additive and liberating; they're powerful tools that optimize centralized control and extraction. The claim is that AI will help us but the real goal is to use us. The system we inhabit isn't transparently fair, it's transparently corrupt, the perfection of self-service passing itself off as manifesting the noble ideals of "capitalism" and "democracy."

Rather than being victims of powers beyond our control, we accepted the erosion of fairness--the foundation of all human societies--into a rigged casino that favors the few at the expense of the many because we accepted the promise that this unfair, corrupt economy, society and political system enabled us to get ahead: who needs fairness if we have a seat in the rigged casino?

In the conventional telling, ours is a system of innovation, growth and opportunity. The reality is the opposite: the "innovation, growth and opportunity" are all concentrated in a vast credit-asset bubble that has richly rewarded those who own the assets that have skyrocketed in value and left everyone who doesn't own these assets behind.

This structure--the real world is the opposite of what we're told--is a civilizational psychosis that benefits those at the top of the wealth-power pyramid. We go along with this psychosis because denial is our defense against a reality too painful to bear: our progression from a society of systemic fairness to a society of systemic unfairness.

But denial, unfairness and credit-asset bubbles are all inherently unstable, and so once the bubble pops, denial will crack and be replaced by anger, an anger at ourselves and those we trusted that will seek expression by focusing on those who glorified the rigged casino the loudest because it enriched them so immensely.

The alternative accounts touted by many are simply different flavors of the conventional narrative.

One is that the Powers That Be are instituting a techno-financial web we cannot escape of tokens, blockchains and stable coins that will digitize every transaction and enable the Powers That Be to switch our financial lives on or off as the means of an ironclad control.

If we change our money, the narrative holds, then we can escape this perfection of Orwellian control.

The problem is that changing the money in a rigged casino doesn't unrig the casino; all it means is those in the casino start using another form of money.

Another narrative holds that technology and system dynamics can be wielded to reverse the decay and fulfill the fantasies of super-abundance and technological Progress.

Neither narrative acknowledges that humans are hard-wired to live in a moral universe, as our sensitivity to fairness--which includes transparency, integrity, truth, honesty, duty, obligation and reciprocity--is the foundation of our social skills, which are our core selective advantage as a species.

The moral universe isn't some concept that isn't "real"--we're constantly told that what's "real" is finance, money, the economy, technology, data and systems--the moral universe is the foundation of all civilization. In dismissing this innate sensitivity to fairness as inconsequential in the "real world" of systems and data, we dismiss an understanding of our civilizational psychosis and our own denial of this psychosis.

There is a place for technology, finance, systems and data, but by measuring "progress" solely by technological standards, measuring "value" solely by financial metrics and measuring "understanding" (i.e. what's being "optimized") by data and systems--all reductionist left-hemisphere functions-- we cut ourselves off from the moral universe that enables our primary selective species advantage--our social experience.

We are not social creatures like ants that self-organize by instinct and pheromone trails: we self-organize in a moral universe in which our exquisite sensitivity to fairness and unfairness in all its intuitive, right-hemisphere width and breadth has been hard-wired as the essential foundation of our primary selective species advantage.

All of which leads to a question we ask ourselves: could instability trigger radical change in our own life?

A health crisis offers an analogy many of us have experienced.

We're living our lives, doing what we always do, and suddenly we experience a health emergency that calls how we've been living into question: how did I become ill? We realize we weren't really paying attention to our diet, our fitness, our sources of stress, our conflicting goals or our doubts or anomie. We never thought of ourselves as being in denial, but we were in denial--a denial that included denial itself.

Faced with a condition that could prove fatal or debilitating, we realize our old way of living wasn't healthy, even though we made excuses and told ourselves that we were generally living a healthy life. Stripped of excuses and rationalizations, we realize we were eating out a lot and that these meals weren't necessarily healthy, even though we ordered the salad instead of the fries. The meals were optimized to trigger our dopamine receptors--this tastes good--and generate a profit for a highly competitive, cost-sensitive business.

We realize that if we truly want to have a healthy diet, we have to prepare real, highly nutritious food at home, with very occasional exceptions. We realize that our stress levels cannot possibly decline unless we make radical changes in our employment / work lives, our home lives and perhaps in our entire understanding of what our life is actually about.

The point here is health crises force us to reassess things we were content to leave as-is prior to the crisis. We weren't actually living a very healthy life, but we told ourselves it was healthy enough because we had no symptoms of illness. That the causal chains of an unhealthy life--stress, diet, fitness, unresolved conflicts--were steadily undermining our well-being was invisible, until something snapped and we experience a health crisis.

Simply put, we avoid radical change until there is no other option left. Denial is comfortable, and we do what's comfortable until it's no longer possible to do so.

Financial matters can also force radical change on us. Our home equity is a "savings account" we can tap until the bubble pops and suddenly we have no equity at all--we only have debt. Equity comes and goes but the debt remains unchanged: that's the problem with debt.

The system we inhabit is inherently unstable because it rests on artifice, not authenticity, on financial bubbles, not value, and Anti-Progress, not Progress. Denial is comfortable and facing all that undermines the quality of our lives and our well-being is not just uncomfortable, it's extremely troubling, for we sense that once we strip away our denial, excuses and rationalizations, we'll be forced to make radical changes in our lives, changes we're not prepared to make until there is no other option left.

If what I've laid out in these five essays is an accurate account of what's really going on, the intrinsic instability of a system that depends on our acceptance of civilizational psychosis for its continuity and coherence will crack wide open. And when that happens, our denial will crack wide open, and many of us will become angry that the rigged casino didn't work out for us as promised.

Many are confident that any crisis is 10 or 15 years away, and so we'll all have plenty of time to prepare. Their forecast may prove to be correct, but their confidence is a form of denial of what an unstable state means: an unstable state is unpredictable and prone to sudden phase changes.

To be confident that any crisis is 10 years away is akin to gazing at an unstable mountainside and declaring that an avalanche is safely in the future. Any confidence in a prediction about an unstable system is a tacit denial of the way that instability is hidden beneath a surface stability that is reassuring due to recency bias but misleading.

When the latest polls find that only 18% of Gen Z see AI as a positive development, this is the equivalent of a tremor shaking an unstable mountainside. Is assuming we'll all have decades to prepare for instability reality-based, or is it denial dressed up in data?

Many of us will be forced to make radical changes in our own lives once the unstable system we inhabit cracks wide open. Those who recognized the fragility of our civilizational psychosis and acted before the avalanche will do better than those who waited until it was too late. My point here is: asking ourselves what it will take to make radical changes in our own lives now, not in some distant future, is a worthwhile exercise.

Anticipating that we might be thirsty in the future is a motivation to start digging a well now, as "once we're thirsty, it's too late to dig a well."

From the point of view of stability, any radical change is needlessly risky. When a crisis takes away stability and predictability, then everything reverses: clinging on to what caused the crisis is what's risky and making radical changes is what offers hope for solutions.

Even when we're in a situation that's undermining our well-being, we cling to the status quo. When we're finally forced to undertake radical changes, it's a kind of relief, for we are forced to jettison what wasn't working but was working just well enough to keep us frozen in place.



Please read these essays as if they are anonymous and therefore must be judged on their own merits.

>When Unfairness Is Systemic, the Consequences Are Flight, Resistance, Revolt

We've Optimized Fragility, Failure, Denial--and Rage

Inequality, AI and Digital Life Are Undermining Society

Remember: In a Crisis, Everyone Will Consider Themselves 'The Good Guys'

Chaos Unleashed: When "Irrational" Makes Perfect Sense

New short video: Could Instability Trigger Radical Change In Your Life? (2:16 min)

Read more...

Why Is Consumer Sentiment at Record Lows?

Consumer sentiment is at record lows because there is zero visibility on any real-world trends that would be positive for the bottom 90%. Vague promises of super-abundance are not visibility.

Why is consumer sentiment at record lows while the stock market is at record highs? The media / social media are ablaze with coverage and commentary on this K-shaped economy, for example: The Stock Market Has Never Been So Good When People Have Felt So Bad: Stocks are partying like it's 1999. Americans haven't been this gloomy in 70 years. (wsj.com)

While much commentary focuses on the rising cost of living (i.e. inflation) and the potential disruption of jobs by AI, these miss the larger dynamic of visibility, i.e. what is visible looking forward. If the horizon is clouded by uncertainty and unaffordability, then the core investments in the future--a family home and a family--are no longer in reach except for the lucky few inheriting wealth while they're young. A high-paying job that isn't secure is not a foundation, it's a temporary raft in a tempestuous sea.

Why So Few Babies? We Might Have Overlooked the Biggest Reason of All.
What unites these disparate cultures, policy environments and demographics, researchers are now realizing, is young people's inescapable and crushing sense that the future is too uncertain for the lifelong commitment of parenthood.

The future has never been assured, but it feels as though we are living in a time of spectacular uncertainty. The Gen X writer Astra Taylor calls ours "the age of insecurity"; the Gen Z writer Kyla Scanlon has described "the end of predictable progress." Gen Z-ers' uncertainty about the future can't be captured by the usual metrics or entered neatly into a spreadsheet. But it may be the X factor in the global parenting free fall.

Raising children is an inherently forward-looking project, and in Professor Vignoli's analysis, increasing exposure to a volatile global economy and accelerating technological change make it hard for young people to project a path forward with even a modest degree of confidence.

In previous lows in consumer sentiment, current economic conditions were unfavorable because the economy was in a recession. I've indicated the three major recessions of the past 50 years on the chart below: 1973-74 (energy crisis / inflation), 1980-82 (inflation, higher interest rates), and 2008-09 (housing bubble burst, subprime mortgage meltdown triggers Global Financial Crisis).

The most important difference between then (1973-2009) and now is that average households could still afford to buy a house and have a family and now those are out of reach for a significant percentage of median-income urban households. In previous recessions, consumers suffering the effects of recession had visibility on evidence that once the economy improved, they would still be able to afford to buy a house and raise a family. This visibility wasn't a top-down narrative bolstered by gamed statistics; it was visible across the entire spectrum of the economy.

The truth few dare to recognize is there is no credible evidence that housing and having a family will return to being affordable for the majority in the foreseeable future. If these are what matters, then rising GDP (a favorite metric of those promoting the narrative that rising GDP means everything's getting better for everyone) offers no visibility on what matters to households.

Also unsaid because it undermines the narratives of permanent Progress and the system benefits us all is the visible decline of the quality of everyday life. Life is more hectic, more precarious, less secure, and our health is declining in ways that go unrecognized because that undermines the narratives propping up the status quo.

It's not just the cost of living is rising; the quality of life is deteriorating in ways that are not easily measurable. Healthcare claims being denied, busy-work being offloaded by Corporate America onto the household, the steady decline in quality of goods and services--in all these cases, what was once reliable and of good quality has been degraded. To contact customer service is now a nightmarish experience of being returned to the same menu of options, none of which address the problem you're trying to resolve.

This Is Why You're Drowning in Busywork We have been told that AI will take people's jobs. What no one mentions is that many of those jobs are landing on us. The AI revolution involves a huge transfer of labor--not from worker to machine but from worker to consumer.

Consumers have visibility on this degradation of the quality of everyday life, and they see no plausible evidence it's reversing. The trajectory of the future is more degradation, and there is no evidence AI will reverse this trajectory. Rather, in many ways it's accelerating it.

There is a lively debate about whether AI will in aggregate create jobs or eliminate jobs, or generate churn that leaves the total number of jobs about the same. At this early stage, there is no visibility on how this will play out, but consumers have visibility on the potential for job losses, reductions of benefits, the collapse of job security and the possibility that most of the replacement jobs being created will be low pay and insecure.

Households have no visibility on the promise that AI will generate vast prosperity that they will share, but they have clear visibility on AI decimating stable employment. Pundits offer up the historical record that previous Industrial Revolutions laid waste to social and economic security but eventually created more general prosperity.

Households understand that this sounds nice while supporting the status quo inequality, but there is no guarantee in history; it's not gravity, it's contingent. This Industrial Revolution might just decimate social and economic structures and leave a dystopia in its wake that institutionalizes extreme inequality not just in wealth and outcomes but in opportunity and freedom of movement.

What's visible is not warm and fuzzy, and insisting that consumers / households have it wrong because those set to reap extraordinary profits insist it wll all work out just fine is comically disconnected from reality. There is no visibility on all those promises of super-abundance that's going to lift all boats, and no visibility on society surviving the onslaught of Big Tech AI.

The social order that underpins the economy has already been already discounted to near-zero by the technocratic value system and machinery of Big Tech's optimization to increase profitability by any means available, and the resulting decay of the quality of life and the moral foundations of a functional society.

Why is consumer sentiment at record lows while the stock market is at new highs? Ask what's visible. What's visible is soaring corporate profits and stock indices only benefit the top 10% who own the lion's share of stocks. What's visible is the decline in security, affordability, the purchasing power of wages and the quality of life, and the absence of any evidence that this trajectory downward is about to reverse.

What's visible is billionaires reaping outlandish gains from financializing technology promising that their gains will trickle down to the bottom 90% after the foundations of the bottom 90%'s security are gutted and reworked in some unforeseeable way that will magically make everyone rich.

This isn't visibility; it's FantasyLand. What's visible is the decay and decline of security, employment, opportunity and visibility itself, and the emergence of a neofeudal society that is so corrupt that it no longer has the ability to recognize its own moral decay.

We inhabit a Tower of Babel that's automating its own demise. We all have visibility on this, but to admit this is to admit the entire status quo is set on self-destruct while indulging in self-glorifying fantasies.

Consumer sentiment is at record lows because there is zero visibility on any real-world trends that would be positive for the bottom 90%. Vague promises of super-abundance are not visibility.



Here is the May 2026 snapshot of consumer sentiment:



This is a 10-year chart of consumer sentiment:



What do we have visibility on? How about the widening gulf between the wealthy and powerful and everyone else?




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The Overstuffed Freezer Analogy

So we as a nation are waiting for the system to break down so we're forced to empty the overstuffed freezer and start over.

A friend recently made a comment that reflected something larger than he intended. It was an offhand comment along the lines of, "I hate to say it, but I wish our freezer would fail so we'd clean out all the old food no one will ever eat."

This struck me as an analogy for wealth, waste and rot in America. As a nation, we're so wealthy we can stuff millions of freezers with food that is never consumed because it's buried beneath a mountain of more recent food, and we're wealthy enough to devote vast quantities of energy to keeping this food that no one will ever eat frozen for years.

Eventually, the freezer fails or the owners move, and all this once perfectly good food is tossed out as garbage to rot in the landfill. There are other forms of rot in this analogy.

There's the rot of vast wealth inequality: there are millions of households wealthy enough to keep overstuffed freezers full of old food running for years and millions of households worrying about paying their utility bills. For the wealthy household, the utility bill is such a modest percentage of monthly income that it's not an issue. The annual utility bill is an inconsequentially trivial percentage of the household's net wealth.

Then there's the rot of legacy systems we're paying to keep frozen long after the utility-value of the old system has expired. Just as no one recalls what's at the bottom of the freezer, and no one wants to expend the effort required to empty the freezer and actually decide if anything in the bottom is worth saving, we as a nation continue paying for legacy systems that are wasteful to maintain and provide no value.

Since no one is paid or rewarded for doing the tedious work of emptying the freezer and assessing the value of each layer of old stuff, this task is never done. We as a nation just keep paying the bills to maintain systems that cost real money to maintain but provide no value. And to the degree they take up space that could have been devoted to things that have real value, the old layers are costly obstacles to improving the quality of life by reducing needless, wasteful expenses.

So we as a nation are waiting for the system to break down so we're forced to empty the overstuffed freezer and start over. Is this ideal? No, but that's the only way overstuffed freezers are ever emptied.




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