Friday, July 12, 2024

How Will We Distribute the Pain Ahead?

What is acceptable, and what is unacceptable? We'll soon have to decide.

I wish the transition ahead--the unwinding of all the distortions and sources of instability in our economy and society--could be painless. That would be ideal. But history suggests that hope is unrealistic. History suggests those in power will cling to whatever is working well for them even as the economy and society decay and decohere around them.

Denial and magical thinking are the order of the day. Rome is eternal, so there's nothing to worry about. If the peasants have no bread, let them eat brioche. And so on.

If the painless option is off the table, then the issue boils down to the distribution of the pain. Ideally, those least able to sustain further sacrifices will be favored at the expense of those better able to sustain sacrifices. But those most able to sustain sacrifices are those with the power to distribute the pain to others. This dynamic leads to those least able to sustain sacrifices being distributed the majority of the pain, to the point that they have so little to lose that abandoning the status quo becomes the least worst option.

The data collected by Italian researcher Vilfredo Pareto revealed a pattern throughout Nature and civilization of 80/20 distributions, what we call the 80/20 Rule or the Pareto Distribution: 20% of the sales staff make 80% of the sales, 20% of the populace ends up owning 80% of the property, 20% of the plants produce 80% of the seeds that sprout, and so on.

The Pareto Distribution distills down to 80% of 80% and 20% of 20%, or 4/64: 4% of the populace ends up with 64% of the property. In the U.S., the top 10% own 93% of the stocks, and it's likely the top 5% own 65%--in line with the Pareto Distribution. The bottom 50% own 2.6% of all financial assets.(See Federal Reserve chart below.) This is in line with the Pareto Distribution: the bottom 64% own about 4% of the nation's financial assets.

The issue thus becomes how best to avoid the dire consequences of the 4% at the top of the wealth-power pyramid distributing 64% of the pain to those at the bottom. Unfortunately, the pain will be distributed unevenly regardless of our intentions: highly paid people in unsustainably costly industries will be laid off along with people in more precarious jobs.



Our most realistic hope is to do our best to ease the burdens of those who will suffer the most severe dislocations and shift some of the sacrifices to those with sufficient means to cushion them from any real suffering. We can rethink our winner take most financial system, our duct-taped social contract, our enfeebled civic virtue and our waste is growth Landfill Economy.

Or we can let the system run to failure and let the Devil Take the Hindmost. What is acceptable, and what is unacceptable? We'll soon have to decide.





My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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Wednesday, July 10, 2024

Here's Our Big Problem: The Ratchet Only Moves Us Closer to the Cliff

Imagine an institution whose ratchet was set to relentlessly reduce budget, staffing and processes while focusing on increasing output / results.

It's tempting to personalize our problems, as those in power tend to possess all the traits that qualify one for immediate delivery to Devil's Island as a danger to humanity. Rather than focus on bad people in power, let's consider the good people working in institutions and agencies, of whom there are many, trying their best to keep the status quo glued together.

The problem they face is systemic and structural: there are no self-correcting mechanisms in American institutions other than running out of money, which rarely happens as money can be printed or borrowed in whatever quantities are needed to bail out the institutions that are the social technology / social infrastructure of our economy and society.

In systems / evolutionary terms, there has never been any need to develop corrective feedback, self-correcting mechanisms, triage protocols or any other institutionalized "muscle memory" responses to sclerosis and dysfunction or to the existential threats posed by multiple mutually-reinforcing crises (i.e. polycrisis) because no recession in the past 78 years has ever lasted more than a few quarters and so the money has always continued flowing in ever greater quantities once the spot of bother passes.

The sole institutional response to failure is to replace the big boss, on the theory that a new "supreme leader" will be able to fix the mess with managerial experience, financial acumen and inspirational leadership.

If the institution lacks the structures--feedback loops, self-correction, the means to radically transform the entire institution as needed--then this is akin to dropping someone in a desert and tasking them to create the Garden of Eden. It cannot be done because the needed tools and resources are not available.

The institutional tools don't exist because all that the employees have ever experienced is The Ratchet Effect: like a mechanical ratchet that only allows a cable to move in one direction, institutions only have the mechanisms to expand: higher budgets, more staff, more meetings, more regulations, more compliance reporting, all of which define the staff's conception of work and the purpose of the institution.

The output and results are secondary to the demands of process, which continually expand: the task of the staff is fulfilling the processes that define "work": attend meetings, fill out compliance reports, enter the data, pass it on to the next department, etc. Whether the mission of the institution is actually being fulfilled is lost in the tyranny of process, the assumption being that if everybody fulfills their job description then the organization's mission would automatically be fulfilled.

Ironically, the processes that are supposed to fulfill the organization's mission end up being the substitution for the mission: there's no meaningful feedback on the goal or purpose, there is only feedback on completing processes. All accountability is for completing processes, not for results.

Did the university's education actually prepare the graduate for a successful career and life, or was it little more than a rubber stamp? The answer is nobody knows because the feedback required to make that assessment--brutally honest, stripped of sugarcoating--doesn't exist.

Meanwhile, the threshold for organizational collapse keeps ratcheting closer to the breaking point. As budgets, staffing and processes bloat, actual results falter, causing the leadership to demand more staffing and budget to "fix the problem." The actual, unaddressed problem is the organization's faulty structure of Ratchet Effect expansion as the "solution" to every manifestation of failure.

lacking any institutionalized requirement to perform triage, to prioritize the mission over process, the organization stumbles off the cliff once budgets are cut. Since there has never been any pressing need for triage, ruthless prioritization, slashing make-work in favor of real-world, measurable results, and the imposition of accountability on every employee not for compliance but for results, the organization never evolved these capabilities. The only capability the organization evolved was to ceaselessly expand.

Imagine an institution whose ratchet was set to relentlessly reduce budget, staffing and processes while focusing on increasing output / results. Imagine an institutional structure that focused solely on feedback of results rather than processes. Imagine an institutional structure that demanded constant triage to weed out needless regulations and processes, who left processes open to those accountable for results, a structure that enabled managers to radically re-order the structure on the fly to better serve the mission.

Imagine an institution capable of instantiating the Pareto Principle, of slashing the budget by 20% while increasing output, or even more radically, cutting the staff by 80% while increasing results. This is of course "impossible" until the money runs out or loses its purchasing power. Then there is no other option but triage and a radical re-conception of organizational structures, missions and results.



Management guru Peter Drucker foresaw the obsolescence and replacement of institutions we consider permanent. He understood that ultimately, every organization, from a sole proprietorship to a sprawling agency employing thousands, is an enterprise that doesn't have profits / results, it only has costs.

Our social technology has ossified while our consumer technology overloads our daily lives with shadow work once performed by public and private organizations. Squeezed between corporate monopolies stripmining us with addictive technologies and crapified goods and services (planned obsolescence run amok) because there is no real competition left, and sclerotic institutions that respond to failure by expanding, we need a radical reversal of the Ratchet Effect. Nothing less will matter.

Digital Service Dumpster Fires and Shadow Work (February 14, 2024)

Is Anyone Else's Life as Stupidly Complicated by Digital "Shadow Work" as Mine Is? (May 22, 2024)

The Ghetto-ization of American Life (April 25, 2024)



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
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Sunday, July 07, 2024

No Reform or Leader Is Going to Save the Status Quo--We're On Our Own

The key takeaway here is: don't count on a simplistic ideology or reform or a "supreme leader" to save the status quo from internal failure.

Humans prefer simplicity to complexity. This is why mythologies still resonate with us, despite our hubristic claims to rationality and "following the science." What we actually crave isn't the challenge of teasing apart highly complex systems of interconnected dynamics in which each subsystem influences every other subsystem.

What we crave is a simplistic explanation / answer and a leader who we can follow because they keep repeating the simplistic answer. So we boil complicated systems such as societies and economies down to "capitalism" or 'socialism," and cling to simplistic versions of these ideas as the explanation of human nature and the answer to all our problems.

When these simple ideas fail to map reality, we're forced to say things such as "ah, capitalism / socialism works wonderfully and perfectly, but we don't have true capitalism / socialism," with the unstated cause of this troublesome imperfection being, well, the pesky humans in the otherwise perfect system.

Which leads us to the present. A great many people cling to a simple reform which they believe will either solve all our problems at the root, or at least go a long way to setting the course that will solve all our problems. These reforms include: hard money / return to the gold standard; adopting bitcoin as the universal currency; seeking "market-driven solutions" to every problem, more regulatory oversight to make sure bad things stop happening, and so on.

If simple reforms / "getting back to basics" actually worked, history would be composed of well-run, boring utopias interrupted every so often by spots of bother that were quickly vanquished by one of the tried-and-true simple reforms. But this doesn't map the historical record, which tends to exhibit long periods of stability characterized by complex city-states / empires establishing a system of governance and economic organization that is productive and adaptive to the predominate conditions of the era.

These stable system are eventually fatally disrupted by one or both of these forces:

1. The predominate conditions change dramatically, demanding adaptations that are beyond the capacity of the system that had worked so well for hundreds of years. These externalities include epidemics, long-term droughts, depletion of vital resources and invasion.

In some cases, these external forces overlap, generating a Polycrisis in whih each external challenge reinforces the others or depletes the system's reserves to the point there is nothing left to deal with the last set of crises.

(To borrow a phrase from correspondent T.D., we can say that these crises got inside their OODA Loop--observe, orient, decide, act--leading to a fatal inability to react fast enough and decisively enough to meet the challenges successfully.)

2. The system's internal limitations--invisible to the participants--fatally restrict the flexibility and adaptability needed to recognize and respond to gradually-developing weaknesses generated by the internal limitations. The weaknesses are papered over by underlings fearful of reporting the troubling truth--"everything's perfectly all right now. We're fine. We're all fine here now, thank you"--or narrative control--the empire is forever, no worries--or the system responds by doing more of what's failed spectacularly: the gods are angrier than we thought, sacrifice ten times more captives next time, that should do the trick.

Here is how Ray Huang, author of 1587, A Year of No Significance: The Ming Dynasty in Decline summarized the internal limits of the Ming Dynasty's system 57 years before its final collapse in 1644:

"The year 1587 may seem to be insignificant; nevertheless, it is evident by that time the limit for the Ming dynasty had already been reached. It no longer mattered whether the ruler was conscientious or irresponsible, whether his chief counselor was enterprising or conformist, whether the generals were resourceful or incompetent, whether the civil officials were honest or corrupt, or whether the leading thinkers were radicals or conservatives--in the end they all failed to reach fulfillment."

The status quo has already reached its limits and reform on any scale beyond the usual incremental "policy tweaks" is impossible, and it no longer matters who's nominally in charge, if rulers are competent, officials are honest or corrupt, or thinkers are radicals or conservatives--the system is beset by forces it fostered but no longer controls, and indeed is incapable of controlling due to the intrinsic limits of the system's core structures, limits which were invisible during the Boost Phase of rapid expansion.

The Ming Dynasty's highly centralized system of governance was unified and guided by a Confucianist moral code rather than a highly developed system of laws and regulations. The current global status quo is unified and guided by a code based on a specific definition of Progress: the eternal growth of production and consumption of goods and services, and the eternal growth of the credit needed to fuel this growth in a permanent economic expansion in which whatever is labeled "innovative" is reckoned better than whatever it replaced. Any evidence to the contrary is dismissed as "negativity," "Luddite," and other derogatory labels: new is by definition the epitome of Progress.

It is now clear that "Progress" defined as whatever is "new" and "innovative" is in many cases the opposite of actual Progress--what I term anti-Progress--and so this simplistic ideological underpinning of the status quo is crumbling.

The "innovation" may well be highly profitable--financialization, globalization, social media, etc.--but its impact may be disruptive to the point that the system is internally incapable of responding fast enough and decisively enough to correct the resulting run to failure.

We can visualize the system reaching internal limits and the resulting decay of adaptability / run to failure as an S-curve:



Given the internal, structural limits, the entire system has only one pathway: decline to the point that a seemingly modest crisis disrupts the last shreds of coherence in an increasingly nonlinear system and the resulting asymmetric effect collapses the system.

The Ming Dynasty took 57 years to decay and collapse from 1587. Given the nonlinear dynamics and the inherent fragility of the status quo's many dependency chains, this timeline could be reduced by an order of magnitude to 5.7 years. We won't know until a crisis that would have been controllable in decades past generates asymmetric effects the system can no longer control.

The key takeaway here is: don't count on a simplistic ideology or reform or a "supreme leader" to save the status quo from internal failure: we're on our own, and it's far better to face this daunting reality now rather than place our faith--and our passive inaction--on the altar of false gods.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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Thursday, July 04, 2024

Living Well on Less Than $30,000 a Year--One American Family's Story

"It's all because of our low cost of living that I can feel relatively secure."

We see stories like this all the time: Survey: The average American feels they need to earn over $186,000 a year just to live comfortably.

This is over three times the $59,000 median annual earnings of full-time workers in the US (52 weeks X $1,139). Median weekly earnings of the nation's 119.2 million full-time wage and salary workers were $1,139 in the first quarter of 2024 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported. (Source: BLS).

This is more than double the median household income of $74,580.

According to this site, about 13% of US households earn $186,000 or more per year. Other sources say the top 10% of US households have an income threshold of $191,406, while the top 5% have an income threshold of $290,164. These numbers vary widely state by state, with high-cost / high-income states having much higher thresholds than lower-cost states.

Bottom line, the bottom 90% say they need a top 10% income to feel secure financially. According to the survey, to feel rich, the average American feels they need to earn $520,000 a year--a top 2% income.

All of the above represents the conventional view that financial security requires being wealthy. The alternative view is financial security results from a low-cost, low-consumption, no-debt lifestyle of the kind I outlined in Is It Possible to Live Well Earning $30,000 a Year in America? Yes--With These Conditions (July 3, 2024).

To state the obvious: it's easier to live on less than it is to earn big bucks.

Confirming that it is possible to live well on less than $30,000, correspondent M.C. shared how his family lives well on a modest income. Their lifestyle and financial choices are within reach of pretty much any couple / family willing to make the required trade-offs. Yes, it can be done in inflationary America 2024, but it requires redefining "financial security" and "wealth," and trading the insatiable desires of conspicuous consumption and the desire to live in places coveted by the wealthy for much different sources of both inner security and financial security.

Here is M.C.'s commentary:

"Yes, it's certainly possible for a couple to live on 30k annually.

My wife and I have been doing this the past 4 years on a single $13.65 an hour job (up from $12 a few years ago) in a retail hardware store a few blocks away. (No benefits except an employee deduction on purchases.) We live in a rural area near the center of the USA.

We bought the house we are living in for 14k cash in 2011. Further, we can replace it (in our rural community with a population of 3,000 and continuing to decline) without breaking the bank (not much housing demand here).

Taxes. We pay nothing to the IRS. For 2024, the standard deduction for a two person household is $29,200. If our taxable income went over that, we can contribute to an IRA. We paid less than $200 in state income taxes last year. Our sales tax is 9%, except that unprepared food from a grocery store has just a 2% tax.

Debts. We own our house and land. We buy our vehicles for cash. I just replaced my 1997 Grand Marquis that I've been driving since 2006. My wife drives a 2014 that we've had several years and that will hopefully last several more. No debts, no credit card balances.

Healthcare. Health insurance on the ACA marketplace is free if taxable income is between 100 and 150% of the poverty level. For a couple, that's $19,720 - $29,580 this year. If we were a bit over that upper number, then we could reduce taxable income by contributing to an IRA.

Food. We are growing tomatoes, strawberries, watermelon, cantaloupe, and green beans. The lettuce and spinach got eaten up by bugs last year, so I didn't plant more. The corn and sunflowers didn't work out well either. I try to stock up on groceries when they are on sale, especially the items we eat a lot.

Entertainment. I rarely ever watch television. We don't have an XBox or any such gaming devices. Four of our seven grandkids live in town, so that's our entertainment. We go to their ballgames, music programs, take them to movies, recreational activities (I play tennis with a couple of them).

Insurance. No property insurance except the required liability insurance on our vehicles. So we are self-insured (other than the required auto liability insurance). That's scary to a lot of people, but we buy good used vehicles and keep them maintained. In addition, we have an added advantage of family members who are electricians, as well as the fact that we are allowed to do the work on a house that we both own and live in. So, I do my own roofing, repairs, painting, etc.

We are able to go without property insurance because we have a few years worth of living expenses saved up. We have been living on less than $30k per year, but I feel it important to be straight-forward that we have an advantage that many don't have. We have peace of mind with retirement funds in a Roth IRA that can be used if things break or the budget gets tight. This is the first year of the four where we will draw some from retirement accounts. I don't anticipate doing this again for another four years.

To be quite honest, we could get by on a lot less than we currently live on. We eat out more than we would if money were tighter.

I would like more people to be aware that it's possible to live on less money. Around age 25, I had it all mapped out to becoming a millionaire. But life happened. And at some point I figured out that I wouldn't really want to win the lottery, as it would change almost everything about my life.

We could seek more paid work but I felt we had enough money, even though we have a fraction of what most people consider to be 'enough' to retire. It's all because of our low cost of living that I can feel relatively secure. I don't have much that anyone would want to steal, so I don't have much to worry about.

I love the mention of your building a micro-house. I've been working on a plan, and want to build one on our daughter's 4 acres. And depending how that goes, I might build a couple more, starting with our son's property."


Thank you, M.C. for sharing your family's pathway to financial security. Paying no interest / having no debt is a big part of that security:



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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Tuesday, July 02, 2024

Is It Possible to Live Well Earning $30,000 a Year in America? Yes--With These Conditions

Can a couple of hardworking people live well in America on $30,000 a year in earnings? Yes, if they're willing to do what's needed to make it happen.

Is It possible to live well on $30,000 a year in America? Let's start with the raw numbers. I am starting with a couple, not an individual, so we're talking about two people living well on $30,000 earnings a year.

Why $30,000 a year? Several reasons. One, it's a full-time wage at $15/hour, a rate that is (or will be) minimum wage in some states and two, it's about half of the median annual earnings of full-time workers in the US. In other words, it's within reach of most workers with a few years of experience.

$30K a year is $2,500 a month. Average Social Security/Medicare and income tax withholding is around 22%, or $550 a month, leaving the wage earner $1,950 net income. Self-employed people have to pay the employers' share of Social Security/Medicare on top of the employees' half--an additional 7.65%, a total of 15.3%. (Yes, that's a big chunk. You get used to it. Render unto Caesar that which is Caesar's.) That pushes their withholding closer to 30%, leaving around $1,750 to $1,800 a month income net of withholding.

So under what conditions can you live well on $1,950 a month in America?

First, own your land and house free and clear, or have the right to live in a house that's free and clear of debt. In the status quo, that requires a huge inheritance. But since few of us actually receive a huge inheritance, let's stipulate that we're discussing lifestyles that are outside the conventional status quo.

For example, building a micro-house on a friend's land in trade for helping them. This is what I did at the age of 24. My buddy was a retired US Marines vet (in-country 'Nam) with acreage he couldn't possibly use so we made a deal that worked for both of us. We built a sturdy micro-house without any electrical power, just hand tools, and after living in a tent my femme and I found it pretty luxurious. I went back 30+ years later and it was still in use.

Alternatively, find a way to live cheap and save half your earnings for enough years to buy a plot of land somewhere where people with lots of money don't care to live. The longer we scrimp and save, the more capital we save to invest. If we have to borrow, borrow as little as possible so it can be paid off with a few years of work.

Or find someone who's needing to sell, or willing to sell a piece of their land, and try to work out private financing. Of course you still need an experienced attorney to draw up the contract so both parties' rights and obligations are stipulated and protected, but the basic idea is seek older folks who may be happy with the monthly income at an interest rate lower than a bank mortgage.

Nothing is easy outside conventional debt-serfdom. Sacrifices and trade-offs abound. That's why so few people venture off the beaten path. The point is there is no substitute for owning whatever you own free and clear, zero debt, zero mortgage. Whatever it takes to get there, fair and square, win-win, that's the path we choose.

2. Choose a state with low property taxes. Every state and local government collects tax revenues. The ideal arrangement for those of us living on less is low property taxes and high sales and/or income taxes, because if we consume/buy very little, the sales tax is no big deal, and if we earn a modest income, the income taxes are not that big a deal, either.

The states to avoid are those where property taxes of $1,000 a month or more are normal. That's a lose-lose situation for those of us living on less income. The target is $100 a month in property taxes, $300 at most.

3. Figure out whatever healthcare arrangement works for you. For some people, that's a job that offers healthcare insurance for oneself and one's mate / significant other. For others, it's qualifying for whatever government insurance is available to low-income workers. For some young healthy people, staying healthy is their plan. For vets, it might be a nearby VA clinic / hospital.

4. Get a reliable high-mileage vehicle and learn to maintain it. A buddy of mine just bought a clean 11-year old Toyota sedan with 100,000 miles for $5,000. His existing Toyota has over 300,000 miles because he's maintained it well. 100K miles is no big deal if the vehicle has been properly maintained. A well-maintained Corolla or Civic routinely gets over 40 miles per gallon on the highway. If a vehicle needs $100 to fill it up, it better be making serious money as an essential work vehicle.

5. Grow some of your own food, buy only real food, waste nothing. Ideally, grow some of your own food, growing whatever grows well and without too much care in your locale. Like what you can grow. Trade your surplus for what others raise/grow, or give it away to people who appreciate it (and you). Only buy and eat real food, meaning there is only one ingredient. No salty, fatty addictive snacks, no sugary beverages, no processed foods, no packaged food, no frozen glop. Whole grain crackers, OK, sure. Chocolate chips for home-baked cookies, of course. But homemade is what counts here: we control the ingredients and provide the labor, which is the highest value input in meal preparation.

Once we taste real food, all the processed stuff no longer even qualifies as "food." As for the cost of real food, ethnic markets are cheaper and more fun than supermarkets. Some markets have discount bins. Much of traditional ethnic cuisines are basically peasant cuisines: cheap, locally grown ingredients with very little meat, which has long been dear. Living well means eating well, and nothing beats home-prepared meals with fresh ingredients.

6. Waste nothing. It's estimated that Americans throw out a significant percentage of the food they buy because they didn't plan the purchases and stick to the meal prep plan.

7. Get lean. We need less food when we're lean, and if we're eating home-grown and/or fresh, real foods, we're getting nutrient rich foods so we're not starved of essential nutrients, a hidden form of starvation that drives us to eat more in a vain attempt to get the nutrients we need.

8. Minimize the amount of time wasted on media, social media, screens and TV. There are better things to do with our time.

9. If there's extra living space, take in a boarder for the extra income. This is a time-honored way to earn extra income with little investment or outlay required. Choose roomies / boarders wisely and they'll add something to life.

10. Insurance is a rip-off until you need it. Needless to say, avoid locales where property insurance is unavailable or unaffordable. Shopping around is worth the effort. Consider buying a little extra insurance, as even a few extra dollars a month can buy more coverage. Even minimal collision coverage on an old car can prove useful.

Having a goal and a plan helps. So does having a Plan B in case Plan A doesn't work as hoped. Being disciplined helps. Having someone to share the work helps. Being able and willing to work hard helps. Having a mentor or three helps. Being able to ask for advice helps. Learning from others helps. Continuing to learn helps. Changing course when things aren't working helps. Having faith helps.

Is any of this easy? Heck no, a thousand times no. I wrote a little book about this entire journey to Self-Reliance based on what I've learned from experience and from others in 54 years of working. There is literally nothing easy about the journey. Risks abound. Every decision is imperfect because it's made with imperfect knowledge.

OK, all of this is "impossible." If that's what somebody decides, then it's true for them. But that doesn't mean it's true for the rest of us.

Can a couple of hardworking people live well in America on $30,000 a year in earnings? Yes, if they're willing to do what's needed to make it happen, which is step off the conveyor belt of conventional status quo resignation and debt-serfdom.



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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Monday, July 01, 2024

Move Over, Disaster Capitalism--Make Room for Addiction Capitalism

That monkey on your back comes in many forms.

We've all heard of Disaster Capitalism: the Powers That Be either initiate or amplify a crisis as a means of granting themselves "emergency powers" which just so happen to further concentrate the nation's wealth and power in the hands of the few at the expense of the many.

Naomi Klein described the concept and cited examples in her 2008 book The Shock Doctrine: The Rise of Disaster Capitalism, and summarized the core dynamic: "Disaster capitalism perpetuates cycles of poverty and exploitation."

Move over, Disaster Capitalism--make room for Addiction Capitalism.

Addiction Capitalism is my term for the last-ditch / desperation method of guaranteeing sales and profits when everybody already has everything: reduce the quality so everything fails and must be replaced, and addict your customers to your product or service which--what a surprise--only you or your cartel provide.

And since you've bought up all the competition and moated your monopoly via regulatory thickets / regulatory capture, consumers must continue paying--or suffer the consequences. Addiction Capitalism is capital's last best hope when the essentials of life and novelties are both over-supplied. So the only ways to juice demand and maintain profits are 1) lower the quality of goods so they must be constantly replaced (Cory Doctorow's "ensh**tification") and 2) addict consumers to services such as social media and products such as smartphones, or create dependencies which are equivalent to addiction, such as dependency on weight-loss medications.

Just as the addict is dependent on a drug, patients are dependent on medications that must be taken until the end of their lives.

Jonathan Haidt's new book offers a scathing indictment of the intentionally addictive--and destructive--nature of social media and smartphones The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness.

For another example of how Addiction Capitalism works, consider how tech companies sell a basic accounting software system for a small sum until it becomes a standard for households and small businesses. Then they eliminate outright purchase of the software and switch to a high-cost subscription model. Nice little history of all your financial records you got there; it would be a shame to lose all that by refusing to pay our monthly fee.

Put another way: going cold turkey and refusing to pay the subscription / prescription is going to be painful. That monkey on your back comes in many forms: checking your phone 300 times a day, obsessively counting "likes," binging on streaming TV and snacks, junk food, fast food, and other addictive glop--the list is long indeed.

Addiction Capitalism is neatly summarized in this scene from Bruce Lee's 1973 martial arts film Enter the Dragon, where the villain Han reveals his opium empire to martial artist Roper, played by John Saxon:

Han: "We are investing in corruption, Mr Roper. The business of corruption is like any other."

Roper: "Oh yeah! Provide your customers with products they need and, uh, charge a little bit to stimulate your market and before you know it customers come to depend on you, I mean really need you. It's the law of economics."


That's Addiction Capitalism in a nutshell: "customers come to depend on you, I mean really need you." That presents us with a choice: "and you want me to join this?"



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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Thursday, June 27, 2024

10 Geopolitical / Financial Risks to the Global Economy

Perhaps the most apt metaphor to describe the decade ahead is that investors, consumers and taxpayers will all be rafting whitewater rapids with ever-briefer stretches of calm.

Geopolitical / financial risks are proliferating and becoming more difficult to predict or hedge for a very basic reason: the era of global integration and accord has ended and the era of global disintegration and discord is heating up. In historian Peter Turchin's terminology, when everyone finds reasons to cooperate, the result is an era of accord; when everyone finds reasons not to cooperate, the result is an era of discord.

Beneath the chaotic swirl of complex dynamics and risk, two core drivers emerge: de-globalization and de-financialization.

The 30-year era of increasing globalization has reversed, reducing the influence of markets and increasing the influence of national security. Where the globalization era led to global trade agreements which served at least a few of every participants' core interests, the de-globalization era will be characterized by fragmentation and deals being cut between nations outside of traditional alliances and ideological camps.

In the neoliberal worldview, markets are solutions to virtually every problem: open up markets and let price discovery and innovations solve all problems. This construct is ideologically appealing, but in the real world, markets generated extremely risky supply-chain dependencies on unreliable offshore sources: yes, these dependencies were efficient and profitable, but when things fall apart, they cause dominoes to fall far beyond what "markets" anticipated or could hedge.

The 50-year era of increasing financialization has also reversed. In a nutshell, financialization optimized capital at the expense of labor / wage earners, and optimized speculation via the vast expansion of credit and leverage, enabling finance to commoditize virtually everything in the global economy: labor, capital, goods, services and yes, even risk.

But commoditized risk that can be hedged only includes the risks that are visible and known. When extremes become more extreme, the potential for risk to escape the neatly fenced corral of hedged risk increases in ways that cannot be quantified and hedged.

I tend to think many observers focus too narrowly on risks arising from financial crises, for example a crisis in the multi-trillion dollar shadowy derivatives market that could cascade as holders of derivative contracts with claims on underlying collateral (for example, the homes underlying mortgages in a mortgage-backed security) start seizing the collateralized assets embedded in the derivatives chain.

While I make no claim to understanding "The Great Taking" scenario and cannot vouch for its accuracy, the basic idea is well-established: derivatives (such as CLOs and CDOs, as well as many even more exotic concoctions) can include claims on the underlying collateral of debt-based assets such as homes or vehicles.

The risk few seem to be discussing is not the seizure itself but the political firestorm any such seizure would ignite. The public has tolerated a stinking mass of self-serving bailouts and insider dealings under the threat of "if we don't do this, the entire system collapses in a heap" for the past 15 years, but their patience with financier stripmining may run out more quickly than the political elites imagine.

History suggests that social revolutions often start spontaneously from an apparently trivial event: the deadwood of a corrupt system rigged to funnel asymmetric rewards to the few at the expense of the many finally catches fire, and quickly becomes a conflagration.

While many commentators have noted China continues reducing its holdings of US Treasuries (UST) and the general trend of de-dollarization, i.e. offloading Treasuries and seeking payment mechanisms that do not include the US dollar (USD), few seem to ponder what risks might arise in other currency flows, for example, the capital sloshing around the global economy as Direct Foreign Investment (FDI), money that flows into an economy as investments in assets such as manufacturing, mining, housing, tourism, etc.

Just as capital flowing in or out of sovereign bonds reflects the interests of each participating nation, so too do FDI investment flows and the sales and purchases of Strategically Significant Commodities.

I would characterize this vast reshuffling of global capital flows as a direct consequence of two factors:

1. The ascendence of national security over market incentives (i.e. profits, mercantilist exports, etc.)

2. The fragmentation of broad trade agreements in favor of special deals with trading partners that include not just tariffs but access to Strategically Significant Commodities and investment capital flows.

In other words, trade is no longer about opening new markets for mercantilist exports and parking surplus dollars in Treasuries, it's about securing essential commodities and capital flows in exchange for access to supply chains and financial markets.

The mercantilist era has ended: so-called free trade (there is no such thing) that created critical national-security-related dependencies on frenemies is now something to avoid and reverse at all costs. Mercantilist nations that have depended on increasing exports as the source of their economic growth will find markets restricted as relocalization and glocalisation become priorities. (This includes China, Germany, Japan and other export-dependent economies.)

We can foresee deals that include access to commodities, guarantees to buy sovereign bonds, opening previously closed sectors of mercantilist economies and access to direct investment, not just trade and tariffs. In other words, the fragmentation of global trade opens the door to deals brokered between individual nations, tailored to their own interests, that cover not just interests in trade per se but in securing commodities, essentials and capital flows.

Globalisation is not dead, but it is fading: 'glocalisation' is becoming the new mantra.

Risk also rises when established processes break down as multiple crises emerge and reinforce each other--what's known as polycrisis. When established mechanisms no longer resolve crises or conflicts, then leaders will naturally be tempted to try ever more extreme measures to regain control (or the illusion of control).

Every leader is prone to miscalculation, but authoritarian regimes with highly concentrated nodes of decision-making are more prone to making catastrophically bad decisions because they've suppressed dissent and open debate as threats to the regime's political and narrative control.

The global trend toward authoritarianism concentrates decision-making in the hands of the few, increasing the risks of fatal misjudgments or miscalculations.

Amidst a disconcertingly expanding universe of risks, Richard Bonugli and I discuss these ten which were assembled by the consortium at CedarOwl. CedarOwl's Table of Geo-Political Investor Risks. This graphic can be understood as a risk matrix. (My own list of 10 risks would be different, of course, but this is a worthy place to start.) Podcast: 10 Geopolitical / Financial Risks to the Global Economy:

1. Financiers Seizing Collateral in a Derivatives Crisis, a.k.a. "The Great Taking"

2. Cyber attacks

3. Tariff wars

4. Confiscation of other nation's financial assets

5. Selling / Boycott of US Treasuries

6. Imposition of Central Bank Digital Currencies (CBDCs)

7. Russia's ban of uranium exports to the West

8. Restrictions on Strategically Significant Commodities

9. Private cryptocurrencies forcibly folded into CBDCs

10. Escalation of Ukraine war

Where does our risk assessment take us? Perhaps the most apt metaphor to describe the decade ahead is that investors, consumers and taxpayers will all be rafting whitewater rapids with ever-briefer stretches of calm.

So what do we do as individuals? De-risk our lives as much as possible and focus on increasing our problem-solving skills. This is my definition of Self-Reliance.



New Podcast: 10 Geopolitical / Financial Risks to the Global Economy



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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

Subscribe to my Substack for free





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Thank you, Jay ($7/month), for your monumentally generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Aaron W. ($70), for your superbly generous subscription to this site -- I am greatly honored by your support and readership.

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Tuesday, June 25, 2024

"Why Are You So Negative?" Good Question. Here's the Answer: Real Life

I think it's more productive to go with Plan B: set aside our emotions and reluctance and start doing the hard work of dealing with polycrisis.

A new reader kindly let me know that my writing was negative and depressing. I thanked the reader for the feedback and realized the question "why are you negative?" was a fair one that deserved an answer.

In a nutshell, the answer is the startling decay of everyday life. Why my writing strikes so many as negative is I am reporting from my direct experience and then pursuing a relatively simple query: do the institutions and systems that dominate our everyday lives have any formalized self-correcting mechanisms, and if so, why aren't they working? If they lack such mechanisms, then they're running to failure and this is not a positive outcome for all of us who depend on these systems and institutions.

Let's stipulate a few things before we proceed.

1. If we can't be honest, then why bother? If we can't bear to face the visible, obvious realities in daily life, then what's the point? If the real world I'm experiencing is instantly declared "negative and depressing," then how do we actually make any progress? We can't.

2. The secular religion of America is "you must always be positive, upbeat, and talk up hope." A positive mental attitude is definitely a plus when compared to indignation, entitlement, resentment and passivity, but realistic appraisals are the essential foundation of actual problem-solving. Feeling inspired because "we're going to Mars!" qualifies as upbeat but there is absolutely no connection between going to Mars and reversing the decay of our everyday life--none. The decay can't be reversed by upbeat inspiration or some new gadget or app. The problems are far deeper and far more interconnected.

3. The source of hope is to face these realities directly rather than declare anyone who addresses them without sugarcoating a "doomer."

4. The decay of everyday life is depressing because there are no easy fixes, and that there are no easy fixes is depressing, too. That's part of the reality we wish to avoid. But that doesn't mean there are no ways to improve the situation, and the path to improvements, both systemic and personal, are what I write about.

5. We all need a break from depressing realities. I strictly limit my exposure to the media and social media as an essential means of retaining some shred of sanity. I focus on the real world, and the workings and consequences of the systems we rely on.

6. Where you stand matters. Many of my readers are older, and therefore likely to have bought a nice home for $45,000 decades ago at the start of their careers, worked hard, earned a pension or accrued a 401K fattened by the relentlessly rising stock market and are now worth $2 million. From where they stand, life in America looks good, and focusing on the decay of everyday life somewhere other than their neighborhood strikes them as negative and depressing.

7. Abstractions don't reverse the decay of everyday life. Waving a chart of the GDP around--it's rising, so everything's great!--has no connection to real-world decay or institutional dysfunction. That household wealth rose $20 trillion doesn't means the problems are magically going away on their own; it simply means the system is optimized to make the already-rich richer. Waving a chart of GDP around doesn't actually solve anything. It's the functional equivalent of waving photos of cute kittens and puppies around and saying "everything's going great!"

8. All this is evidence that we're losing the will to actually reverse decay and are choosing to change the narrative as the "solution". In other words, if we stop talking about the negative, depressing decay of everyday life, then we can get on with being upbeat and positive--look at GDP and household wealth, they're going up! This desire to change the narrative rather than actually tackle difficult problems is understandable, but fatal to actual problem-solving. It is the equivalent of the Roman upper class reassuring themselves that Rome was eternal, so everything would sort itself out on its own because it had always been sorted in the past.

Here's my direct experience in the real world: a 21-year-old today cannot have what I had 50 years ago: a part-time job that paid for my college tuition and books, a studio apartment, ownership of a car and spending money. I didn't have to borrow a dime to work my way through college, have my own apartment and car and have a life beyond classes and work. I have documented this in detail: We Feel Poorer Because We Are Poorer: Here's Proof (December 4, 2023).

Let's not over-complicate what's straightforward: we're becoming more prosperous when our wages / labor buy more goods and services, especially the essentials of life: shelter, food, energy, utilities, transportation, higher education, healthcare and childcare. If the money we have left after paying for essentials buys more discretionary goods and services, we're getting more prosperous.

If the essentials are consuming a greater percentage of our earned income, we're becoming less prosperous, i.e. we're poorer. Those tasked with persuading us that gradual impoverishment is actually soaring prosperity have near-infinite statistical means to obscure this straightforward measure of prosperity: the purchasing power of labor / earnings.

If our hours of work buy fewer goods and services, we're getting poorer.


Fifty years ago, tuition at a four-year state university was $233 a year. That's about $1,400 in today's dollars. Today, the tuition at my alma mater is $14,500, a ten-fold increase. The same goes for rent and other expenses. If wages for 21-year-olds had risen by more than ten-fold, then everyday life would actually have improved. But this simply isn't the case.

I could afford my own small studio apartment, an old car and some spending money and pay all my tuition, fees and books out of my part-time earnings. Granted, I was frugal and made more than minimum wage, but still--what I did was not impossible or unusual. Yes, it required working a lot of hours but it was certainly within reach. (I lived in Honolulu, one of the most expensive cities in the U.S. It would have easier virtually anywhere else.)

Can anyone claim this is true today with a straight face? If it's true, then show me by doing it yourself. Go get a job at the same wages paid to a 21-year old, work fewer than 30 hours a week, and then rent your own flat, pay for your own car, pay all tuition and fees at a four-year state university and have a bit left over for the occasional bowl of ramen or movie or saving for a vacation.

If it's still within reach, then why isn't it the norm of everyday life for 21-year-olds today as it was two generations ago? If we're honest--and we're still able to be honest, aren't we, or have we lost that, too--then we have to admit this isn't progress, it's the opposite of progress: life is harder now, not easier.

That cars have rearview cameras and apps do this or that and now we have electric cars--none of these reverse the startling decay of affordability, purchasing power and thus prosperity.

Here's my direct experience in the real world: America is awash with refugees from what must be a great conflict or natural catastrophe. We call these refugees "the homeless." I lived in the San Francisco Bay Area for 32 years. Tech capital of the world, beautiful people, scenic, nice weather, home to the smart, ambitious, wealthy, and so on.

Around eight years ago, empty stretches of roadways suddenly filled with dozens of vehicles--encampments of the homeless. Patches of lawn near freeway offramps were suddenly filled with tents and trash. A tent encampment arose a block from our house--not in a "bad neighborhood," just not a protected enclave in the hills.

A homeless individual--does it really make us feel better to call this person "unhoused"?--started sleeping right beneath our bedroom window. I had to hose human excrement off our somewhat sheltered (and therefore ideal to use as a toilet) front entry. (We moved away in early 2019. Some solutions are systemic, some are individual initiative.)

Charts of GDP--it's going up!--aren't really relevant when you're hosing human excrement off your front porch. Neither are rising sales of EVs--we're saving the planet by stripmining it to make two billion unrecyclable batteries! These are abstractions, and they do nothing to reverse the startling decay of everyday life.

What caused this enormous flood of domestic refugees? We like simple answers and simple solutions, but there aren't any. The unaffordability of essentials such as shelter are certainly a factor, but the decay of family, social ties and the economy all play a part.

How can we claim with a straight face that "life is getting more prosperous" when half the populace owns essentially zero financial wealth? Trillions in stimulus has piled up tens of trillions in financial wealth, but how has so little trickled down to the 170 million Americans who comprise the bottom 50%? Can we declare "this is an increasingly prosperous nation" after pondering this chart? That 170 million Americans own a grand total of 2.6% of the nation's enormous financial wealth? That's statistical noise, not prosperity.



Yes, this is negative and depressing. Why? Because it's fact, and there are no easy, one-size-fits-all fixes. If we're looking for a conflict or natural disaster that unleashed a massive reversal of progress, we might want to look at how wages have fared versus capital: capital skimmed $149 trillion from wage-earners.



Here's my direct experience in the real world: the quality of appliances and other everyday life products has declined precipitously. My first apartment in the SF Bay Area in 1987 had a 40+-year old refrigerator, still humming along. In the early 1990s, a neighbor gave us his old 1960s era fridge when he bought a new one. The point here is that appliances routinely lasted 30 or even 40 years two generations ago, and now they fail within a few years.

This is not an abstract data point like GDP or federal debt. This is the real world. I have personally replaced the motherboard in a name-brand dryer that failed in a few years. The plastic part had a few cheap circuit boards and commodity chips, total value $20 at the most, and it cost $180 plus shipping. Add in labor (if I hadn't been able to do the task myself) and the cost equaled the price tag of a new dryer.

Our name-brand washer and fridge both expired within the last year after less than a decade of service. If you talk to the staff in a big-box appliance department, they'll tell you 7 to 8 years is about the norm now. In many cases, that's not reality. We have many firsthand reports from family and friends of expensive, fancy fridges failing within three years.

Is this progress? No. The collapse of durability and quality is a catastrophic decay of progress and prosperity. Waving charts of GDP or photos of rockets doesn't reverse this decay of everyday life.

Here's my direct experience in the real world: a building permit that once took a day to issue now takes six months. Same basic plans for a modest starter house as forty years ago when I dropped the plans off in the morning and picked them up, stamped and approved in the afternoon, so what changed?

It's certainly not the way houses are built. That hasn't changed enough to affect the permit process. What changed is the functionality of the institution issuing the building permits. The functionality has fallen off a cliff. This is not progress or prosperity. It is a startling decay of everyday life.

Is declaring the real world negative and depressing part of a productive problem-solving process? I don't think so. I agree that knotty, interwoven problems are difficult to tease apart and reverse. Many of these problems are embedded deep inside institutions, where they are difficult to see.

What I write about are solutions, but to write about solutions first requires making realistic assessments of the problems. That we respond to difficult problems by feeling they're negative and depressing is understandable. But we have a choice: do we follow the elite Romans in placing our faith in the comforting idea that difficult adaptations made in the past will magically manifest now without us having to do anything? Or do we set aside our emotions and reluctance and start doing the hard work of dealing with polycrisis?

I think it's more productive to go with Plan B: set aside our emotions and reluctance and start doing the hard work of dealing with polycrisis. I am hopeful about reversing the decay of everyday life, and I've written books about how to do so. But please don't think that waving charts of GDP or EV sales is doing anything other than distracting us from the tasks at hand.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

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)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


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