Look Around and What Do You See? Social Defeat

How often do you see acknowledgements that social defeat and social depression are rampant in America?

If you do a search for social defeat, you find hundreds of links to studies of rodents. Here, we demonstrate that social defeat stress (R-SDS) impairs goal-directed motivation in male mice. "Social defeat is initiated when a male rodent is introduced into the home cage of an older, aggressive, dominant male." "The social defeat stress model." And so on.

When applied to humans, the definitions are generalized in psychological terms: "The definition of Social Defeat is the loss of power, status, or self-esteem as a result of verbal or physical abuse by others." "Social defeat (SD) is defined as a feeling of having lost the fight leading to a loss of valuable status or of important personal goals." And so on.

In my analysis, social defeat is a complex response to systemic economic, social and political inequalities. In other words, social defeat is the only possible outcome of structurally generated extreme asymmetries of wealth, income and power. Downward mobility excels in creating and distributing social defeat.

Social defeat arises in strict social hierarchies in which the few dominate the many. Overcrowding exacerbates the many ills of social defeat within these social hierarchies based on dominance.

In my lexicon, social defeat manifests as a spectrum of anxiety, insecurity, chronic stress, powerlessness, and fear of declining social status. Countless studies have identified the destructive consequences of chronic social defeat: social avoidance, passivity, depression, hyper-aggression, increased food intake and body mass, drug addiction, and so on.

What do you see when you look around? I see all the manifestations of widespread chronic social defeat. When the system has been rigged to favor the dominant few at the expense of the many, the only possible outcome is systemic social defeat which manifests as all the ills listed above.

Downward mobility and social defeat lead to social depression. Here are the conditions that characterize social depression:

1. Unrealistically lofty expectations of endlessly rising prosperity have been instilled in generations of citizens as a birthright.

2. Part-time and unemployed people are marginalized, not just financially but socially.

3. Widening income/wealth disparity as those in the top 10% pull away from the shrinking middle class.

4. A systemic decline in social/economic mobility as it becomes increasingly difficult to obtain middle class security or hold onto it.

5. A widening disconnect between higher education and employment: a college/university degree no longer guarantees a stable, good-paying job. (This is what historian Peter Turchin calls overproduction of elites.)

6. A failure in the Status Quo institutions and mainstream media to recognize social depression as a reality.

7. A systemic failure of imagination within state and private-sector institutions on how to address social depression issues.

8. The abandonment of middle class aspirations by the generations ensnared by the social depression: young people no longer aspire to (because they cannot afford) families or homeownership.

9. A loss of hope in the young generations as a result of the above conditions.

The rising tide of collective anger arising from social depression is visible in many places: road rage, violent street clashes between groups seething for a fight, the destruction of friendships for holding the "incorrect" ideological views, and so on.

The unwelcome reality is that America chose economic and financial policies that transferred $50 trillion from labor to politically powerful capital. If this doesn't seem possible, please read the RAND study in its entirety: Trends in Income From 1975 to 2018.

Next, read the summary from Time.com The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90% -- And That's Made the U.S. Less Secure.

Here's an excerpt:

There are some who blame the current plight of working Americans on structural changes in the underlying economy--on automation, and especially on globalization. According to this popular narrative, the lower wages of the past 40 years were the unfortunate but necessary price of keeping American businesses competitive in an increasingly cutthroat global market. But in fact, the $50 trillion transfer of wealth the RAND report documents has occurred entirely within the American economy, not between it and its trading partners. No, this upward redistribution of income, wealth, and power wasn't inevitable; it was a choice--a direct result of the trickle-down policies we chose to implement since 1975.

We chose to cut taxes on billionaires and to deregulate the financial industry. We chose to allow CEOs to manipulate share prices through stock buybacks, and to lavishly reward themselves with the proceeds. We chose to permit giant corporations, through mergers and acquisitions, to accumulate the vast monopoly power necessary to dictate both prices charged and wages paid. We chose to erode the minimum wage and the overtime threshold and the bargaining power of labor. For four decades, we chose to elect political leaders who put the material interests of the rich and powerful above those of the American people.

Those who gained the pilfered wealth credit their "hard work." That's not the full story. Policies stripmined labor and the middle class and funneled the trillions to well-connected capital via tax loopholes, subsidies, favorable tax write-offs, family trusts and many other policy decisions that could only benefit the top 0.1%, who now own more of America's wealth than the bottom 80%.

While the bottom 50% of America's households lost ground as their share of the nation's wealth shrank by a third to a meager 3%, the share of the top 1% soared by 40% to 32%.

How often do you see acknowledgements that social defeat and social depression are rampant in America, and that the causes are systemic, the result of policies chosen by the nation's leadership elites? Shall we be brutally honest and admit the answer is never?

And what do you expect to be served at the banquet of consequences of this systemic generation of social defeat and social depression? Perhaps a pendulum swing to the opposite extreme?








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A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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What Happens When the Competent Opt Out?

By this terminal stage, the competent have been driven out, quit or burned out.

What happens with the competent retire, burn out or opt out? It's a question few bother to ask because the base assumption is that there is an essentially limitless pool of competent people who can be tapped or trained to replace those who retire, burn out or opt out, i.e. quit in favor of a lifestyle that doesn't require much in the way of income or stress.

These assumptions are no longer valid. A great many essential services that are tightly bound to other essential services are cracking as the competent decide (or realize) they're done with the rat-race.

The drivers of the Competent Opting Out are obvious yet difficult to quantify. Those retiring, burning out and opting out will deny they're leaving for these reasons because it's not politic to be so honest and direct. They will offer time-honored dodges such as "pursue other opportunities" or "family obligations."

1. The steady increase in workloads, paperwork, compliance and make-work (i.e. work that has nothing to do with the institution's actual purpose and mission) that lead to burnout. There is only so much we can accomplish, and if we're burdened with ever-increasing demands for paperwork, compliance, useless meetings, training sessions, etc., then we no longer have the time or energy to perform our productive work.

I wrote a short book on my experience of Burnout. I believe it is increasingly common in jobs that demand responsibility and accountability yet don't provide the tools and time to fulfill these demands. Once you've burned out, you cannot continue. That option no longer exists.

For others, the meager rewards simply aren't worth the sacrifices required. The theme song playing in the background is the Johnny Paycheck classic Take this job and shove it.

Healthcare workloads, paperwork and compliance are one example of many. Failure to complete all the make-work can have dire consequences, so it becomes necessary to do less "real work" in order to complete all the work that has little or nothing to do with actual patient care. Alternatively, the workload expands to the point that it breaks the competent and they leave.

2. Loss of autonomy, control, belonging, rewards, accomplishment and fairness. Professor Christina Malasch pioneered research on the causes of burnout, which can be summarized as any work environment that reduces autonomy, control, belonging, rewards, accomplishment and fairness. Despite a near-infinite avalanche of corporate happy-talk ("we're all family,"--oh, barf) this describes a great many work environments in the US: in a word, depersonalized. Everyone is a replaceable cog in a great impersonal machine optimized to maximize profits for shareholders.

3. The politicization of the work environment. Let's begin by distinguishing between policies enforcing equal opportunity, pay, standards and accountability, policies required to fulfill the legal promises embedded in the nation's social contract, and politicization, which demands allegiance and declarations of loyalty to political ideologies that have nothing to do with the work being done or the standards of accountability necessary to the operation of the complex institution or enterprise.

The problem with politicization is that it is 1) intrinsically inauthentic and 2) it substitutes the ideologically pure for the competent. Rigid, top-down hierarchies (including not just Communist regimes but corporations and institutions) demand expressions of fealty (the equivalent of loyalty oaths) and compliance to ideological demands (check the right boxes of party indoctrination, "self-criticism," "struggle sessions," etc.).

The correct verbiage and ideological enthusiasm become the basis of advancement rather than accountability to standards of competence. The competent are thus replaced with the politically savvy. Since competence is no longer being selected for, it's replaced by what is being selected for, political compliance.

It doesn't matter what flavor of ideological purity holds sway--conservative, progressive, communist or religious--all fatally erode competence by selecting for ideological compliance. Everyone knows the enthusiasm is inauthentic and only for show, but artifice and inauthenticity are perfectly adequate for the politicization taskmasters.

4. The competent must cover for the incompetent. As the competent tire of the artifice and make-work and quit, the remaining competent must work harder to keep everything glued together. Their commitment to high standards and accountability are their undoing, as the slack-masters and incompetent either don't care ("I'm just here to qualify for my pension") or they've mastered the processes of masking their incompetence, often by blaming the competent or the innocent for their own failings.

This additional workload crushes the remaining competent who then burn out and quit, go on disability or opt out, changing their lifestyle to get by on far less income, work, responsibility and far less exposure to the toxic work environments created by depersonalization, politicization and the elevation of the incompetent.

5. As the competent leadership leaves, the incompetent takes the reins, blind to their own incompetence. It all looked so easy when the competent were at the helm, but reality is a cruel taskmaster, and all the excuses that worked as an underling wear thin once the incompetent are in leadership roles.

By this terminal stage, the competent have been driven out, quit or burned out. There's only slack-masters and incompetent left, and the toxic work environment has been institutionalized, so no competent individual will even bother applying, much less take a job doomed to burnout and failure.

This is why systems are breaking down before our eyes and why the breakdowns will spread with alarming rapidity due the tightly bound structure of complex systems.




New Podcast: Charles Hugh Smith on Getting Ready for a Real Recession (38 min) (38 min)

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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A Nation of Junkies: The Empty Future of a Stimulus-Speculation Economy

Now that the US economy is totally dependent on trillions of dollars in stimulus and speculative gains reaped from the stimulus, there is no Real Economy left to pick up the pieces when the credit-stimulus-speculation bubbles all pop.

When economists speak of organic growth, they're referring to growth that arises naturally from the expansion of population, advances in productivity gained from better training and wise investments and the fruits of innovation.

Organic growth doesn't need constant stimulus, nor is it dependent on speculation. It doesn't need to be juiced by central banks and government to function. In an economy that isn't dependent on stimulus, the role of central banks is limited to being the lender of last resort in periodic financial crises, and government's role is to serve the common good by funding what fosters the common good but isn't profitable enough for private companies to pursue, for example, rural electrification and critical infrastructure.

Compare this Real Economy with the Artificial Economy we now have that is completely dependent on central bank and government stimulus and rampant speculation. If either the stimulus or speculation disappeared, the economy would collapse. Without constantly increasing monetary and fiscal stimulus, the asset bubbles inflated by stimulus would collapse.

Every decision in this stimulus-speculation-dependent economy is keyed off of Federal Reserve stimulus or federal spending guarantees. Consider the decision to buy or build a residence to live in or hold as an investment. This decision is now keyed to Federal Reserve manipulation--scrape away the sugar-coating and this is what it is--of mortgage rates and the market for mortgages (mortgage backed securities) and federal government backstops and guarantees.

Glance at the first chart below of the Fed's "intervention" in the mortgage market: somehow the housing / mortgage market survived without the Fed owning any mortgage backed securities prior to 2009, but now the Fed must intervene to the tune of trillions of dollars to keep the housing / mortgage market from imploding.

All this stimulus is sold as "help" but it all ends up "helping" the wealthiest few at the expense of the bottom 90%. Look at the two charts below of the percentage of wealth held by the top 1% and the percentage of wealth held by the middle class, those households between 50% and 90% in terms of household income. Every new Fed / federal stimulus pushes the wealth of the 1% higher and the wealth of the middle class lower.

To those pushing the stimulus, the soaring wealth of the top 1% is "success" because that's their circle of colleagues and pals. If we're doing great, everyone must be doing great. Such is the hubris and denial olf our financial and political leadership.

You'll notice three charts all display parabolic rises: the Fed balance sheet, federal debt and total debt. The primary form of stimulus is credit: expand the availability of credit and (until recently) make it cheaper to borrow by manipulating interest rates lower.

All this "free money" fueled a dependency on speculation for "growth," a dependency that has hollowed out the economy. As a direct result of all this stimulus / credit, corporations have bought tens of thousands of homes as rentals, inflating another housing bubble. Investors have snapped up tens of thousands of dwellings to cash in on the short-term rental (AirBnB etc.) boom, effectively distorting the long-term rental markets and pushing rents higher.

Debt and stimulus tracing parabolic ascents cannot end well. Eventually they collapse under their own weight.

Every junkie has an excuse. Every junkie proclaims I can stop any time. Now that the US economy is totally dependent on trillions of dollars in stimulus and speculative gains reaped from the stimulus, there is no Real Economy left to pick up the pieces when the credit-stimulus-speculation bubbles all pop.

And so we're treated to the infantile charades of the Federal Reserve and our elected officials, both bleating how wunnerful everything is while in private, with the mics safely muted, they're desperate to push the inevitable implosion off just a few more months. They have no alternative, and no way to return to an unmanipulated economy that isn't dependent on ever larger injections of stimulus and parabolic increases in debt.

The problem, friends, is the US economy has run out of veins for the coming injections of stimulus. The costs of dependency on artifices of stimulus and mood enhancement--everything's wunnerful!--are coming due, as they always do.

Unfortunately, there's no solution other than Cold Turkey, the collapse of all stimulus and all speculation. We're about to find out just how unpleasant Cold Turkey can be, and babbling rants of denial will only make it worse.














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Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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Higher Unemployment Won't Stop Wages from Rising

The net result of these dynamics is official unemployment can soar but employers will still be scrambling to find qualified, willing employees.

The labor market is viewed as a sea of fluid workers. When one industry shrinks and lays off workers, it's presumed the workers will find employment in an expanding sector. So laid-off construction workers will transition to insurance sales, become waiters, go back to school to train for jobs in the healthcare sector, and so on.

It's also presumed that young workers will automatically be hired and trained in whatever sectors are expanding. The fresh clay of high school / college graduates will be molded into whatever workers employers need.

This isn't how the labor market actually works. People have constraints which limit their willingness and / or ability to transition to new kinds of work. These constraints may be physical--many are unable to do demanding physical work--intellectual--they lack the training or mindset needed for demanding knowledge-work--or emotional: high-stress jobs burn people out.

There are social, cultural and financial constraints as well. For example, young people will not take jobs in sectors they have no interest in. Trendy fields attract talent, staid fields are avoided. There may be an expectations gap between what young workers expect in pay and workload and what employers are offering.

Although few seem to have noticed, the pandemic lockdown pushed millions of people into discovering ways to survive without taking fulltime jobs. People get creative when they have to, and as a result of the lockdown, people found they could get by on much less than they once thought. People found nooks and crannies in the economy outside the conventional mainstream of full-time work in government or Corporate America. They have side hustles, work for cash, rent out rooms, live with Grandma and Grandpa (two Social Security checks, yowza), live in a rent-free micro-house and so on.

In other words, there is a vast spectrum of mismatches between what employers want and what the workforce is able to do and willing to do for the pay and work being offered. This has forced employers to loosen conventional demands--for example, offering flex-time for working parents, conceding to remote work, etc.--and offer higher pay and upsides (bonuses, stock options, etc.) to retain workers and poach experienced, willing workers from other employers.

As I noted in Here's How We'll Have Labor Shortages and High Unemployment at the Same Time (April 3, 2023), there are also demographic and generational forces in play. Retiring workers are in many cases taking irreplaceable work experience with them, and the replacement workers lack the requisite training and on-the-job problem-solving. Expectations and standards change with each generation.

As I explained in Wages Going Up for Good: Catch-Up and Blowback (May 24, 2023), wages must play catch-up after 45 years of declining purchasing power. A "living wage" in an era of relentlessly higher costs due not just to inflation but to credit-asset bubbles is much higher than it was in previous, lower-cost eras.

Many workers are still earning close to the same hourly rate I made in 1985 ($12/hour) while official inflation has tripled and the cost of housing has risen five or six-fold, along with higher education, childcare, health insurance, etc.

The net result of these dynamics is official unemployment can soar but employers will still be scrambling to find qualified, willing employees. Wages have to rise regardless of unemployment or recession, but few analysts seem to grasp the social and economic forces in play stretch back generations.




New Podcast: Charles Hugh Smith on Getting Ready for a Real Recession (38 min) (38 min)

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
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The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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Sorry Our Demographic Karma Ran Over Your Economic Dogma

Your bogus economic dogma of "growth via the wealth effect" created the demographic karma that will bring down the status quo.

What happens when you bleed your workforce while enriching those who already own assets with one bubble after another, all in the name of "fostering growth"? To answer this, let's modify a felicitous phrase: Sorry Our Demographic Karma Ran Over Your Economic Dogma.

The Demographic Karma is young people can no longer afford houses, healthcare or children and so the birthrate plummets and the workforce shrinks to the point that the bloated, heavily indebted status quo collapses under its own weight.

Demographic-economic chartist CH summed it up very succinctly in a recent Tweet:

@Econimica: Asset/RE bubbles (of assets primarily held by elderly/institutions) must be maintained to avoid a banking/economic crash...but the price will be the ongoing collapse of families/births...saving the present at the expense of the future (again).

This dynamic of Demographic Karma crushing Economic Dogma is global, as evidenced by this Tweet about China's demographic collapse and bubble-economy:

@fuxianyi: Chinese policymakers now face a dilemma: if the real-estate bubble does not burst, young couples will be unable to afford to raise two children. But if the bubble does burst, China's economy will slow, and a global financial crisis will erupt.

The Economic Dogma holds that inflating one speculative credit-asset bubble after another is wonderful because each bubble produces a "wealth effect" in which those who inherited assets or bought assets in the past are greatly enriched by the bubble. Feeling wealthier, they then borrow and spend more freely.

This Economic Dogma--that bubbles are excellent pathways to "growth"--is a form of "trickle down" economics in which the wealthy borrowing and spending more "trickles down" to the middle class and working class.

As the charts below show, this theory is baseless and bankrupt: the rich get richer and richer and everyone else gets poorer and poorer with each bubble. What's "growing" is wealth and income inequality as the demographic consequences of this soaring inequality collapses the social contract.

Let's go through the chart deck.

1. The US workforce is fully employed. Many expect a recession and AI will slash employment and create a pool of unemployed seeking work at low wages, but this isn't how it works. As I'll explain in a future post, the mismatches between the work employers need done and the skills and willingness of the workforce to do the work for the offered wage mean the unemployment rate can be high but workers are still scarce.

2. The expectation that US population and the workforce will ceaselessly expand is not guaranteed, especially if immigration declines. What is guaranteed is the population of retirees will continue rising.

3. Wages' share of the national income has declined for 45 years as the gains of the economy were shifted from labor to capital.

4. The top 1%'s share of wealth soars to new heights in every speculative credit-asset bubble.

5. The middle class's share of wealth plummets in every speculative credit-asset bubble and only gains ground when bubble pop. (We all know what happens when bubble pop: the Federal Reserve fraks out and creates trillions of dollars in stimulus that then flows into the pockets of the wealthy via the next bubble.)

6. Household net worth has skyrocketed far above inflation and the growth of the economy (GDP). As the charts above show, this wealth flowed disproportionately to the top 1%.

7. Thanks to the Fed's latest bubble--The Everything Bubble--housing affordability is at an all-time low. Put another way, the ratio of median income to housing prices is at an all-time high.

8. To stave off the inevitable karmic consequence of extreme wealth inequality--social disorder--the federal government has borrowed and blown tens of trillions of dollars on "fiscal stimulus" to buy the complicity of the 90% left behind.

So sorry Our Demographic Karma Ran Over Your Economic Dogma. Your bogus economic dogma of "growth via the wealth effect" created the demographic karma that will bring down the status quo.


















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My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

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The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

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