While We Focused on Fripperies, the Foundations Have Rotted Away

While the Everything Bubble has soared to new heights, consumer confidence has fallen to new lows.

For your consideration, four charts that tell a single story: while those Americans who have benefited so immensely from the Everything Bubble in stocks, housing, crypto, bat guano, etc.--every asset under the sun--have spent lavishly on fripperies, the foundations of everyday life for the bottom 90% have rotted away.

Yes, I know: stocks are up, and AI will enrich us all, so since everything's great for me, it's great for everyone. Nice, but not true. The reality is the foundations of an affordable quality of life for the bottom 90% who haven't been enriched by the Everything Bubble have rotted away while the top 10% jetted around the world immiserating the everyday lives of the locals.

If everything's great, then how do we explain this? A shocking 92 percent of US adults are not going to the doctor because it's too expensive. (yahoo.com)

An overwhelming number of Americans are delaying medical care because of fears they can't afford it, a new study has found. "The findings highlight a growing gap between having health insurance and feeling financially protected, with medical costs forcing many Americans to delay treatment, cut essential spending and take on debt," the study said.

Or this? 'There's no joy in living this way.' Families struggling to make ends meet. (yahoo.com)

Americans surveyed in a new study by Omnisend, an e-commerce marketing platform company, are expressing similar struggles. More are borrowing money to pay for groceries. Consumers also said higher prices have changed how they feel about brands they once liked, and a majority of respondents also said they believe brands are using inflation as an excuse to raise prices more than necessary.

In a survey of 1,075 consumers in June, 30% of respondents said they used a credit card to pay for essentials, such as groceries, gas, utilities or medical bills, in the past three months, knowing they may not pay off their bill.

An additional 20% said they borrowed from friends or family, 18% used buy now, pay later products, and 17% said they had to use savings meant for something else.

Shrinkflation: 89% of respondents said they regularly notice when companies shrink packages while prices stay the same. Twenty-nine percent of respondents consider this type of price increase to be the most unfair, and 59% said they noticed it regularly.

Trust in brands is at a low point: 85% said they believe brands often use inflation to justify larger-than-necessary price increases. Among respondents, 67% said higher prices have changed how they feel about brands they once liked.

Those who dismiss all of the above as "not true" or "it's their fault" are terrified of admitting the truth: the foundations of life in America have rotted away while the wealthiest 10% are enjoying the wealth generated by history's greatest credit-asset bubble.

The Rise of the Unstoppable American Tourist A supercharged U.S. economy has helped transform a nation of homebodies into zealous international travelers; 'Travel isn't optional' (wsj.com)

Behind the shift is a supercharged U.S. economy that in the course of a generation has created a larger and wealthier class of Americans that views travel as an essential rather than a luxury. Older Americans, who are driving this new era of travel, hold about $110 trillion in wealth. They're also living longer, and looking to make the most of those years.

Europe is often the gateway drug. Portugal and Greece have seen the biggest percentage increases in U.S. visitors of any country over the past decade, according to U.S. government data. The U.K. and Italy have seen the largest increases in the total number of tourists, getting millions of additional Americans a year arriving by air.

Only about 6% of U.S. travelers to Europe in 2025 said it was their first time flying abroad. Many of these tourists are visiting multiple times a year. U.S. travelers to the region skew female, with women 55 and over making up 24%. More than 15% of Americans visiting Europe reported a household income of $300,000 or more.

In 1990, fewer than 5% of Americans had a passport. Now, more than 50% do.

A growing share of consumer spending is going toward foreign travel, as habits change and prices rise. Lenza, who does tech work for the travel industry, estimates that he and his wife spend between $100,000 and $200,000 on travel each year, even as they try to be cautious with other kinds of spending.

"One of the reasons I joke that I'm still working is that I like my business-class sleeper seats," said Robbins, who estimates they spend about $60,000 to $70,000 a year on travel abroad.

And it's not just freewheeling baby boomers. Younger generations, who place a high value on experiences, are spending on travel instead of buying houses and having kids.

The magic is often lost on locals. The influx of tourists has brought in new wealth in many places but it's also straining infrastructure, raising the cost of living and disrupting local life. Housing has become scarce and unaffordable in some cities, with more apartments being used as pricey short-term vacation rentals.

Tens of thousands protested against overtourism on the Spanish island of Mallorca last month, demanding fewer visitors and more affordable housing. The march turned violent as protesters clashed with police, who fired rubber bullets after being pelted with plastic bottles.

It wasn't just "working hard" or "smart investing" that generated $70 trillion in new "wealth" since 2020, it was luck: being in one's peak earning years when assets such as houses were still affordable, and then owning those assets during history's greatest credit-asset bubble, arguably from Q1 2009 to the present, or from either Q1 2020 or Q3 2022. Take your pick, the results are the same: tens of trillions of "free money" wealth for those older, wealthier Americans who bought assets before the Everything Bubble inflated.

The Great $110 Trillion Wealth Transfer Won't Happen Any Time Soon Americans 55 and up control most wealth, and many of them have decades of living left. (wsj.com)

A staggering 97% of that increase was due to wealth gains in households where the head of household was 55 or older. About 75% of the total increase was from gains by the wealthiest 10% of households age 55 and older, the analysis found.



This chart of Composite Consumer Confidence is well worth studying. Look at the 1990s dot-com era and the current Everything Bubble. Since the 1990s Internet boom actually raised all boats--real wages actually increased, prosperity by any commonsense measure was broad-based rather than concentrated in the top 10%--consumer confidence rose throughout the 1990s.

Compare that to the present: while the Everything Bubble has soared to new heights, consumer confidence has fallen to new lows. The Everything Bubble only benefited the older, wealthier Americans, while the rot accelerated the decay of the foundations of life for the bottom 90%.



Consider the S&P 500 stock market index. The stock market has more than doubled in a mere four years, along with housing in many markets. As a result, household net worth rose a staggering $71 billion, a 70% increase, "97% of that increase was due to wealth gains in households where the head of household was 55 or older, and 75% of the total increase was from gains by the wealthiest 10% of households age 55 and older."



That's an incredible concentration of the gains in two overlapping cohorts: the top 10% of households and those 55 and older.

Actually, for the bottom 90% of American households, overseas travel is at best optional. Nobody seems to be asking questions such as: what kind of society do we end up with if young people no longer have an interest in raising families or buying homes while devoting their earnings to visiting the Stans? What kind of society celebrates luxury travel while 92% of households forego medical care because they can't afford it?



The obvious answer is a society whose foundations have completely rotted away while we focused on fripperies funded by asset bubbles. If you want to argue, argue with the data. Sorry, the data won.


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AI and the Delusions of Increasing Productivity

Most of AI isn't productive, it's just another form of consumption.

Like GDP (Gross Domestic Product), economic Productivity is an unquenchable spring of delusions, delusions being pushed to new heights of delirium by promises of endless leaps of productivity as AI is deployed in every nook and cranny of the global economy.

Let's start with what Productivity measures. Like GDP, Productivity distills everything in the world down to money: the cost of all inputs (labor, capital, resources) and the monetary value of the output (goods and services). If the output goes up while the input costs remain the same or decline, Productivity is going up: we're producing more with the same basket of inputs (work, capital, etc.).

On the surface, this appears commonsensical, but as with GDP, AI and many other sources of confusion and delusion, what matters is what's not being measured or even recognized. Exhibit #1 in the cavalcade of delusion is Corporate America's sleight of hand way of boosting Productivity by offloading work onto consumers and households.

It's not that Corporate America actually generated more goods and services with the same inputs: what they did was transfer work they should have done to consumers and households. Consumers and households are now burdened with unending shadow work dealing with Corporate America's rubbish products and services, doing unpaid work to fix or maintain products and services that break down or don't work reliably and are "black boxes," i.e. unrepairable without "customer service," which has degraded to the point of parody.

We all perform this unpaid shadow work every day: pump our own gasoline, scan our own groceries, and waste hours dealing with kludgy services and maddeningly dysfunctional AI "customer service" chatbots and 3-item menu choices that don't have an option for the problem we have-- a problem that should be the company's responsibility, but it's been dumped on us.

If we measured the billions of dollars in unpaid shadow work forced on consumers and households by state agencies and Corporate America, Productivity would be falling off a cliff. But that doesn't support the self-serving claims that the casino-economy is doing great because corporate profits are rising.

What's left out of the glowing claims is the corporate profits come not from producing quality goods and services but from dumping all the consequences of shoddy products and services on consumers and households.

Exhibit #2 is the collapse of product durability and the quality of services. Durability isn't measured in the the calculations of Productivity, so the fact that appliances that routinely lasted 30-40 years now fail in 3-4 years is not even recognized, much less measured.

The same is true of the decline in the quality and utility of services, and the soaring costs of repair. Recall that "output" is a dollar amount. So when we take our out-of-the-paltry-one-year-warranty vehicle in for a $3,400 repair that used to cost $1,400, since the parts and labor didn't change in any material way, the higher price boosts both GDP and Productivity: woohoo, 4 hours of labor and a handful of parts now generated "more output" and "higher GDP."

You see the insanity here: the reason why we're paying higher prices is the quality of the products and services has cratered, but this is measured as "wonderful" because GDP goes up and Productivity is higher, too, since the input costs went up less than the value of the output.

Monopolies and cartels thus boost the wondrously wonderful trifecta: corporate profits, GDP and Productivity all go up as quality goes down and costs and risks are transferred to hapless consumers and households, who have no other choice in a fake "marketplace" of state and corporate monopolies.

Exhibit #3 is the self-serving hype about AI automating limitless gains in Productivity, which is shorthand for limitless gains in corporate profits. This too is delusional for a number of reasons:

1. Most of AI isn't productive, it's just another form of consumption. Conversing with a chatbot, having AI compose another worthless term paper or conjure another worthless song or graphic image--these are all consumption, not productive applications of capital. They're superfluous forms of consumption that are the direct result of AI's true costs being subsidized. If everyone had to pay the actual costs of running these stupendously costly operations, these superfluous forms of consumption would plummet accordingly.

2. There is precious little evidence that AI is actually improving real productivity. As with all casino-economy hype, outliers are touted as examples of AI's transformational magic: AI found a math proof, AI conjured a new virus, etc. That these are A) atypical and B) examples of how AI can be used for malicious purposes just as easily as it can for good is ignored.

How will Productivity be affected when a rogue player uses AI to conjure a super-virus? Nobody dares ask this because it might tarnish the casino-economy hype that AI will make us all wealthy beyond measure.

The problem with AI will boost productivity everywhere claim is a consequential share of all "work" is needless bureaucratic churn created not by actual need but by the apparently permanent abundance of huge surpluses that can be squandered on make-work, churn and profiteering.

So AI will automate worthless churn, marketing and make-work. Is this actually boosting the quality, durability and real value of the economy's output, or is it all just an illusion of "value" created by endless surpluses of cash to squander?



The problem is the surpluses are declining and being replaced by borrowed money. Debt is another input that is glossed over in calculations of GDP and Productivity.

Last but not least, there is evidence that AI's initial illusion of increasing productivity and lowering costs transmogrifies into lower productivity and higher costs as maintenance of complex systems kicks in. The kludgy nature of AI's "almost good enough" magic only becomes visible as all the "not quite good enough" starts piling up and breaking down complex systems.

Economics is akin to an ancient cult glorifying a temple of fabricated gods. The priesthood (naturally) claims extraordinary powers that can only be wielded by those with temple-granted credentials. That the cult is nothing more than a collection of beliefs claiming to be "science" is cloaked by measures that leave out everything of true value and consequence to serve the illusion that these beliefs are "how the world works."

GDP and Productivity are the functional equivalents of waving dead chickens while dancing the humba-humba around the campfire at midnight, delusional claims of "how the world works" that set up a world-shattering encounter when the real world doesn't obey the claims.

Economics measures what's easy to measure, not what matters, and eventually that will matter more than the temple's believers can possibly imagine.

When economists start measuring durability, the quality of services, unpaid shadow-work performed by consumers and households that should be done by the companies providing the services, the perverse profiteering of monopolies, state and private, and the true costs over time of fixing AI's "almost good enough" magic, then their cultish claims to being "science" might have a shred of credibility.

Until then, prepare for impact:



The eventual consequence of AI's "almost good enough" magic:




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I'm Asking You to Support My Work This Month

Of Two Minds serves this purpose: taking control of and improving our own quality of life and security.

Once a year I ask you to support my work. In the past, I've struck a humorous note--rattling the begging bowl. This year feels different. The veneer of normalcy is peeling off faster than it can be glued back on, and this decoherence is accelerating, which is why I'm writing a series for subscribers entitled The Revolution No One Sees Coming.

Of Two Minds content ranges over so many fields that it doesn't fit into any one conventional category. But beneath the surface jumble it's always about solutions, macro and personal/household, solutions derived from understanding the dynamics at work beneath the conventional surface explanations, all of which ultimately serve this purpose: taking control of and improving our own quality of life and security.

I am especially interested in social evolution and change, as this process is neither transparent nor predictable. Our era is one of vast wealth-power inequality, resource depletion and technological changes (AI, social media, etc.), dynamics that are changing the global order at every scale, which is why I focus on navigating instability via self-reliance, avoiding burnout / Ultra-Processed Life, and investing in ourselves and the revolution that no one sees coming.

The Revolution No One Sees Coming will not just be a series of external events, it will be personal, as each of us will face situations we didn't choose whose novelty and scale may exceed our previous experience. History is full of changes no one thought possible a few years earlier. No one else is writing about it like I am, so a subscription--which costs the same as a few sushi--is a unique value. Thank you for supporting my work.

I have always felt that if even one single idea presented here changes your life in a positive way, then the subscription will pay for itself many times over in the advance of your security, self-reliance and quality of life. Thank you for your readership, and I greatly appreciate your financial support via any of these methods:

The subscription is $7/month or an annual payment of $70/year. At readers' request, there is also an "extra-generous subscription" option of $10/month.

1. Subscribe to my Substack at the $7/month / $70 annual subscription or the $200 option.

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The Joyless Pantomime of Optimizing Ennui

The joyless pantomime of optimizing our alienation is not a substitute for authentic fulfillment.

We all know that geopolitics, the stock market, AI, the unemployment rate and all the rest of what's presented as "explaining" everything is "important," but all these analytic abstractions ignore what we actually experience. This divide between what we're told we should be experiencing and what we are actually experiencing is what I call the politics of experience, a term coined by R.D. Laing in the 1960s.

The basic idea is that there's a widening gulf between what we actually experience and what we're told we should be experiencing, and this disconnect is inescapably deranging. Since the entire realm we inhabit is telling us everything's great and the sky's the limit, we pantomime this same claim as if we're actually experiencing authentic joy because everyone else seems to believe it.

If we confess that we don't feel everything's great and what we actually feel is a complete disconnect from everything we're supposed to be feeling, then we risk an internal and social divide that threatens our entire status quo: if we recognize it's all a joyless pantomime, then what?

But everyone else doesn't actually believe it, either; they're just going through the motions in the hope that the joyless pantomime will keep everything they're afraid of losing glued together. But if we've substituted an optimized-for-optimization pantomime for authentic experience, then we've already lost ourselves and our ability to discern the hollowness of the civilizational psychosis that claims a life of ennui and alienation is "living our best lives."

The gulf between what we're told is joyful and wondrously promising and our lived experience is now so wide that the cracks are showing. Consider these excerpts from recent articles:

The Strange Feeling So Many Adults Can't Explain: The quiet epidemic not enough people are talking about. (medium.com)

Now I hear the same sentence from people all the time. "Nothing is wrong, I just don't really get excited about anything anymore."

They're not saying they're depressed. They're still working. Paying bills. Taking care of their kids. Walking the dog. Going to the gym. Life keeps moving. But the excitement isn't the same. That spark that used to make ordinary things feel meaningful doesn't seem to show up anymore.

What's strange is how many people seem to be feeling it at the exact same time. Spend a few minutes on TikTok, Reddit, or Instagram, and you'll find thousands of comments from people describing the exact same experience. Different ages. Different careers. Different backgrounds. But they're all asking a similar question. "When did I stop looking forward to life?"

Why does everything feel so joyless? Welcome to the age of decadence without pleasure: Decadence in our era comes in technologically mediated forms, emptied of desire and obsessed with self-optimization. (theguardian.com)

AI marks a triumph of artifice more sweeping than the old decadents could have imagined. Yet far from bolstering our capacity for perceptual intensity, AI presents new threats to both. Its productions are eerily hollow, with no felt experience, embodiment or sensation behind them. AI is the pleasureless decadence machine.

"There is no pleasure or pain for an AI, no skin in the game," the philosopher Carissa Veliz writes in her recent book Prophecy. As a result, an AI "cannot care, and therefore cannot value." Without some felt relation to pleasure and pain, judgments of value and taste become abstract and bloodless.

Art, sex, nature: why is everything sold to us as a means to an end, rather than an end in itself? How a reductive worldview is stripping meaning from our most valued activities. (theguardian.com)

I have seen countless other examples of all the things that are good in life being promoted not for their own sake but for the material benefits they bring. This instrumentalization has become normalized so insidiously that we don't even notice that it is odd, let alone wrong. Nor do we seem to be aware of quite how pervasive it is. Yet its effects are profound, leading us to lose sight again and again of what is truly of value in life.

Our autonomous agency has increasingly been expressed through our status as consumers. Freedom is above all the choice of how to spend our money, with the promise that everything we need can be obtained in exchange for cash. The consumer mindset has affected how we relate to everything, not just the things we buy.

The result is that the world has become essentially transactional, meaning that everything is an instrument for getting something else. It is no coincidence that dating apps give the impression that we are shopping for partners because we approach even relationships with the consumer framing.

Combine an inflated belief in personal autonomy, a transactional consumer mentality and a reductionist attitude to how things work, and it is inevitable that we treat the world as a collection of resources we can plunder to promote our own well-being. The tragedy is that when we do so, we neglect rather than serve our deepest needs.

The cornucopian fantasy of AI generating super-abundance is the joyless pantomime taken to the highest level of civilizational psychosis. The more we strive to optimize ourselves and everything around us, the more we rely on metrics as guides to "living our best lives," the more we strive to work harder and work smarter in the hopes that more stuff and more transactions will finally become fulfilling, the farther we drift from ourselves and our own experience.

The joyless pantomime of optimizing our alienation is not a substitute for authentic fulfillment. The pantomime--going through the motions of finding fake fulfillment in ultra-processed products, experiences and optimizations--is not just joyless, it drains our life force, leaving us in a depleted state of ennui, burned out and wondering why we don't feel the fulfillment we're supposed to be feeling in our hyper-optimized existence.

We don't need therapy and supplements, we need out.




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The Joys and Tragedies of Naivete

Our naivete is being exploited so ruthlessly and with such abandon that the golden age of the Big Con is consuming itself.

Naivete is interesting because it's so easily confused with confidence, native optimism, youthful enthusiasm, and a host of delusions, including mistaking idealized fantasies and fairy tales as templates for the real world. In a culture that prides itself on not being a chump, to be called naive is an accusation: don't be naive means don't be an easily conned chump.

In contrast, being confident, optimistic and filled with youthful enthusiasm are praised as the core of American Practicality, Idealism and Vigor, i.e. the can-do spirit. That naivete lends itself to youthful enthusiasm, sunny optimism and can-do confidence is rarely remarked upon.

So what is naivete other than credulity? It's a willingness to trust leaders, institutions and mythologies without running them through common-sensically skeptical filters, and a belief that everything will work out just fine regardless of what happens if we just keep working hard and working smart.

The difference between a willingness to trust leaders, institutions and mythologies, sunny optimism and youthful enthusiasm and naively mistaking self-serving fantasies and fairy tales for the real world is, well, there isn't any. Believing that an unending stream of patently transparent self-serving fairy tales accurately reflect "the real world" is the pinnacle of naivete, and that describes the entire American society, culture and economy: this is the golden age of the Big Con.

Which brings us to Herman Melville's under-appreciated classic, The Confidence-Man. Why read a book from 1857 which flopped so badly as commercial literature that Melville stopped writing and ended his career as a customs official? Because this book masterfully explores the entire nature of trust, confidence and cons. Though the setting is a riverboat on the Mississippi River just before the U.S. exploded into Civil War, its insights cross cultural boundaries.

This is not an easy book to read for several reasons. First, it is undoubtedly one of the first "post-modern" novels which breaks from traditional narrative storytelling. ( Another example: Dostoevsky's Notes From the Underground.) The Confidence-Man is a collection of 45 conversations between various people on the riverboat--beggars, absurdly dressed frontiersmen, sickly misers, shysters, patent medicine hucksters, veterans (of the Mexican-American War) and the "hero" in the latter part of the book, the Cosmopolitan.

In typical Melville fashion, you also get asides--directly to the reader, in several cases, as if Melville felt the need to address issues of fiction outside the actual form of his novel. The lack of structure, action and conclusion make this a post-modern type book, but if you read each conversation as a separate story, then it starts to make more sense.

For what ties the book together is not a story but a theme: the nature of trust and confidence. In a very sly way, Melville shows how a variety of cons are worked, as the absolutely distrustful are slowly but surely convinced to do exactly what they vowed not to do: buy the "herbal" patent medicine, buy shares in a bogus stock venture, or donate cash to a suspect "charity."

In other chapters, it seems like the con artist is either stopped in his tracks or is conned himself. Since the book is mostly conversations, we are left to our own conclusions; there is no authorial voice wrapping up each chapter with a neatly stated ending. This elliptical structure conveys the ambiguous nature of trust; we don't want to be taken, but confidence is also necessary for any business to be transacted. To trust no one is to be entirely isolated.

Melville also raises the question: is it always a bad thing to be conned? The sickly man seems to be improved by his purchase of the worthless herbal remedy, and the donor conned out of his cash for the bogus charity also seems to feel better about himself and life. The ornery frontiersman who's been conned by lazy helpers softens up enough to trust the smooth-talking employment agency owner. Is that a terrible thing, to trust despite a history of being burned?

The ambiguous nature of the bonds of trust is also explored. We think the Cosmopolitan is a con-man, but when he convinces a fellow passenger to part with a heavy sum, he returns it, just to prove a point. Is that a continuance of the con, or is he actually trustworthy?

The book is also an exploration of a peculiarly American task: sorting out who to trust in a multicultural non-traditional society of highly diverse and highly mobile citizens. In a traditional society, things operate in rote ways; young people follow in their parents' traditional roles, money is made and lent according to unchanging standards, and faith/tradition guides transactions such as marriage and business along well-worn pathways.

But in America, none of this structure is available. Even in Melville's day, America was a polyglot culture on the move; you had to decide who to trust based on their dress, manner and speech/pitch. The con, of course, works on precisely this necessity to rely on one's senses and rationality rather than a traditional network of trusted people and methods. So the con man dresses well and has a good story, and an answer for every doubt.



Our naivete is being exploited so ruthlessly and with such abandon that the golden age of the Big Con is consuming itself. Delusions are now the norm, as if our unhinged optimism that everything will turn out just fine as long as we believe in Technology and Finance, for that will be enough to stem the tsunami of consequences building up beneath the surface euphoria of stocks and AI making us all wealthy beyond measure.

These are the joys of naivete. The tragedies are still over the horizon, a gathering storm we are unprepared for.


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