Financial Forecast 2025-2032: Please Don't Be Naive

Rather than attempt to evade Caesar's reach, a better strategy might be to 'go gray': blend in, appear average.

Let's start by stipulating that I don't "like" this forecast. I'm not "talking my book" (for example, promoting nuclear power because I own shares in a uranium mine) or issuing this forecast because I favor it. I simply see it as the most likely trajectory of the global financial system, based on history and the dynamics of human systems. "Liking" it or not liking it has nothing to do with it: the opinions of Titanic passengers who didn't "like" that the ship was sinking didn't affect the outcome.

You already know the global financial system is untenable. In a nutshell, the expansion of production and consumption has been funded by the expansion of credit--money borrowed from future resources and income. The rate of expanding debt far surpasses the anemic rates of expanding production, and this rapidly expanding mountain of debt is perched precariously on the phantom collateral generated by The Everything Bubble, the astounding expansion of asset prices as those with the lowest cost access to credit have bid up every asset class, from real estate to gold to bitcoin to stocks to fine art.

All these assets are phantom collateral because they were bid up on the wings of cheap, abundant credit. History is rather decisive: all credit-asset bubbles pop, and the price of the assets round-trips back to pre-bubble valuations. As the bubble pops, credit shifts from being abundant and near-zero in cost to being scarce and dear.

The commercial real estate sector (CRE) is a real-time example of this dynamic. Half-empty buildings are being dumped at a fraction of their peak valuations, and then sold again for even less or abandoned to default and liquidation. This is how all bubbles pop; there is no other template supported by history. Humans cling to magical thinking and grasp at straws rather than face the unwelcome reality that the cycle has turned and there is no happy ending for those who believe the "real value" of an asset is the peak price at the top of the bubble.

Now that we understand the impossibility of keeping The Everything Bubble forever inflated, let's shift our attention to those tasked with keeping the system from collapsing. In my view, the closest analogy is police officers tasked with protecting the often ungrateful and undeserving while being plagued by do-gooders and naysayers who are safely isolated from the wretchedness they demand the cops deal with in a manner that meets with their refined approval.

In other words, us and them: only those who share the responsibility for protecting the often ungrateful and undeserving while being plagued by do-gooders and naysayers can understand. Outsiders know little of the realities and are often naive, basing their convictions on what they think "should happen" rather than the limitations of real life.

This will be the mindset of the authorities tasked with "saving" the system we all depend on--especially the wealthiest who have benefited the most. These is of course the class that feels most entitled to advocate for special treatment: we're rich and important, so you should listen to us and do what works for us.

In other words, like the do-gooders, naysayers and whiners telling the cops how to do their jobs. Those tasked with saving a system sliding toward an inevitable crisis will have little patience for obstructionists, however well-meaning. The attitude of those carrying the responsibility for saving the system will be: do your part, get out of the way, stop whining and be grateful we're saving the system for your benefit.

Let's now shift to a very common belief of "investors": foreseeing this crisis, we've piled up "hard money" assets that are safely hidden from the grubby, illegitimate grasp of authorities. When the crisis sweeps away the bubble, we'll still be rich, and we'll then scoop up all the bargain-priced assets, making ourselves even richer.

It gives me no pleasure to say the obvious: please don't be naive. Those who will be trying to save the system from collapse understand that every asset is only richly valued now because of the credit bubble. From their point of view, "investors" who are planning to preserve the bubble-valuation of their assets and then emerge to snap up everything for pennies on the dollar are, well, the enemy.

Another widespread belief holds that the hyper-wealthy always sneak through the wormhole and emerge with all their goodies intact. This fosters the idea that if they can do it, so can I. History offers examples on both sides: the great estates of the wealthiest Romans did not survive intact when the empire crumbled (or put another way, when control of the shards shifted to a new elite).

As the bottom 99.5% feel the squeeze, their rage at those at the top not paying their fair share will rise exponentially, and the political pressure on authorities to go after the hyper-wealthy will become too intense to ignore. Many of those trying to save the system will have already had enough of coddled billionaires, bankers and financier grifters.

Another conviction that will be revealed as naive is the faith that the rules will stay unchanged, allowing us to hoard our stash and emerge unscathed to scoop up the bargains offered by the less prescient. History is again rather definitive: the rules will change overnight, and continue changing, as needed. One "emergency measure" after another will be imposed and become normalized.

It's important to put ourselves in the shoes of those struggling with the impossible responsibility of keeping the system from collapsing. From their point of view, everyone trying to evade the wealth taxes, windfall taxes, special assessments, etc. are ungrateful whiners, as what will anyone have if the system collapses? We're doing you all a favor, taking only 10% in a wealth tax to preserve the 90% that remains yours.

Another point of naivete is what happens to obstructionists in a full-spectrum surveillance Corporate-state. China has shown other nation-states how to do it properly: every digital communication and transaction is monitored, and while VPNs and other gimmicks offer a few wormholes, the fundamental reality is: it takes an awful lot of effort to not leave a trail of crumbs, and at some point, is it worth all the effort? It's much easier to just pay the wealth tax, the windfall tax, grumble about it, and move on to enjoy life as best we can.

In China, the local authorities politely invite transgressors to tea, and offer a suggestion to mend your ways and keep your nose clean. Those who insist on mucking up the works after the kindly advice will be neutered one way or another.

The naivete also extends to ways to evade surveillance. We're all going to get by on barter. Really? Have you actually tried to exchange stuff with anonymous others? Like many encounters in online boards, people don't show up, they flake out or decide not to make the deal. It's tediously time-consuming and frustrating unless you already have a network of trusted contacts who do this kind of thing all the time.

In my experience, reciprocity with other trustworthy productive people works better than barter. Instead of haggling over price/value, just give stuff away. In a trusted network, whomever gets the free stuff will scrounge up something to give you for free in return. These networks tend to have a "node," an outgoing, friendly, trustworthy person who can find a welcoming home for whatever is being freely distributed, and pass around what's being given to those who gave freely of their surplus.

Another point of naivete is the belief that as an asset soars in value, the authorities will magically restrain themselves from noticing this juicy target. If we factor in history and human nature, we will conclude the opposite is more likely: the authorities will redouble their efforts to track and collect that which is Caesar's from those trying to evade the collection of everyone's "fair share."

Given the resources of the NSA et al., how plausible is it to think little old me is going to leave no digital crumbs as I go on my merry way? Thanks to automation of data scraping, it's going to get easier and cheaper to scrape data looking for miscreants trying to avoid paying "their fair share."

The whole idea of a wealth tax is it's a tax on all wealth, held anywhere in the world. So burying assets offshore only works as long as the authorities turn a blind eye to tax havens. As pressures mount, trusting the eyes to remain blind might not be as "sure-thing" as many seem to believe.

As specific assets soar in value, a "windfall tax" will become politically appealing. Since all this soaring wealth is unearned, shouldn't the fortunate owners pay a bit more due to the windfall nature of their unearned wealth? Of course they should.

The key point to understand is the system will have to grab enough collateral to fund itself while collateral evaporates in the deflation of the Everything Bubble. This will truly be a case of TINA--there is no alternative. Desperation will drive policy extremes few think of as possible, much less inevitable.

Something else that may be revealed as naive is the faith that moving to another nation-state will offer secure respite from those demanding we render unto Caesar that which is Caesar's. This faith overlooks the global reach of these dynamics: rampant inflation, the debasement of currency, the increasingly desperate need for collateral and revenue to keep the system from imploding, the rising cost of risk and credit, the scarcity of collateral, and so on. How will the nation-state we're moving to respond to these financial crises? What are the odds that they will magically escape the crisis, or come up with a painless solution that doesn't demand any sacrifices of residents? How secure will the rule of law and the wealth of foreigners be once push comes to shove?

In summary: to understand the next 8 to 10 years, start by having some sympathy for the fox and not just for the hare. Here we are, trying to save the system that everyone depends on, taking a modest 10% wealth tax, and the ungrateful wretches are whining and trying to evade paying their fair share.

Rather than attempt to evade Caesar's reach, a better strategy might be to go gray: blend in, look average: post photos of kittens and puppies, complain about the cost of groceries, drive a look-alike vehicle, live in an unremarkable house, render unto Caesar that which is Caesar's, forget about emerging as one of the rich who evaded Caesar and get on with enjoying one's private life focused on well-being, and as difficult as it may be, work up a little gratitude for those carrying the responsibility for keeping the system from collapsing. A system that degrades but coheres is a far better place to live than a system that completely collapses.

It gives me no joy to suggest please don't be naive, but a realistic appraisal of what happens when things unravel suggests there are few limits on "emergency measures" anywhere on the planet and it's best to plan accordingly and focus on what we can control rather than what we can't control.

For more on this approach, here are free excerpts of my book on self-reliance.

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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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Sound Money Vs. Fiat Currency: Trade and Credit Are the Wild Cards

We need to start thinking outside the current system, which has no solutions.

Our convictions about money are quasi-religious: heretics are burned at the stake. I'm not sure which stake I'll be tied to, because all the conventional choices--fiat currency, sound money (gold, Bitcoin) or debt-free currency (a.k.a. MMT)--are all fatally flawed.

To understand why, consider the wild cards in any monetary system: global trade and credit. Let's start with credit, which as David Graeber explained in his book Debt: The First 5,000 Years, has been an integral component of monetary arrangements since the dawn of civilization.

Taxes must be paid and seed purchased for the next crop, and so credit in some form--notched sticks, bills of sale, purchase orders, loans--is the lifeblood of commerce and state revenues. Credit naturally divides into short-term commercial credit--credit extended until the goods or payment are delivered--and longer term credit secured by collateral.

In traditional economies in which gold and silver are money, credit was generally limited to commerce, as credit based on loaning surpluses of gold and silver was limited by the scarcity of those metals. But the demand for credit did not diminish; rather, it increased, which is why small banks (that often went bust) emerged in the 1820s in America to meet the demand from small enterprises for credit to expand.

In an economy in which gold is the only money, credit is limited to a percentage of gold held in reserves, as much of the reserves must be held to fund customer redemptions / withdrawals. This limits the availability of credit.

In a fractional reserve banking system such as ours, one ounce of gold held in reserve is sufficient collateral for a loan 10 times the value of the reserve: $2,300 in gold enables the issuance of $23,000 in new money, i.e. a loan of $23,000, as every loan is new money created by the act of issuance.

What happens to "gold-backed money" when credit expands the supply of money expands 10-fold? The gold reserves are now spread over a much larger sum of money. The actual value of the gold backing each unit of money declines to a fraction of its initial value.

In other words, if credit is allowed to create money, then the "gold-backed" valuation of each unit is massively diluted. If credit is limited to surplus gold/silver loaned at interest, the sum of credit is a tiny fraction of all money in circulation.

Ancient Rome offers an example of a system in which only gold-silver were money. When the empire's silver mines in Spain were depleted, the supply of new money dried up and scarcity forced authorities to shave the actual silver content of coinage, the older higher-value coinage was quickly hoarded and left circulation: this is Gresham's law, that bad money drives good money out of circulation.

Rome also offers an example of trade's impact on money. Rome's wealthy--who naturally ended up with most of the empire's "sound money" wealth--spent freely on luxuries from foreign trade with Africa, India and distant China: silks, incense, gemstones, etc. This trade drained the empire of gold and silver, which was transferred overseas to buy the luxuries.

In other words, trade imbalances drain importers of their gold/silver. President Nixon didn't end the convertibility of the US dollar to gold on a whim; due to rising US trade deficits, America's gold would have been drained to zero in a few years. That's what happens to "sound money" when trade deficits cannot be controlled: those running the trade deficits run out of gold-silver and cease importing goods.

Nixon's hand was forced by the requirements of a global reserve currency, the US dollar. What is often overlooked in discussions of money is the necessity for reserve currencies to be "exported" to the global economy at scale so there's enough units floating around to fund commerce and credit.

If there is insufficient currency available in the global system, the currency cannot function as a reserve currency due to its scarcity. As the global economy increased in size, the sums of US dollars required also increased, requiring permanent trade deficits as the means to "export" the currency into the global financial system.

Many feel that getting rid of the USD's reserve status would be a plus, but those mercantilist nations exporting to the US would disagree, as once trade dries up their gravy train ends. Also unsaid is the reality that many nations must import food and energy, and their trade deficits are thus unavoidable.

A global economy with severely limited credit and trade will be a very different economy than the one we have now, undoubtedly better in terms of reduced consumption but this may not be entirely welcome or usher in an era of stability. The ideal system would be one that enables a transition to a new global economy that doesn't impoverish the bottom 90%.

Interestingly, convertibility to gold didn't restrain the ravages of inflation. Look at the chart of the USD's purchasing power since 1900 and note the value dropped from $25 to $5 during the period that the USD was convertible to gold.

The influx of New World gold and silver via Spain in the 1500s and 1600s also deflated the value of precious metals in Europe.

The larger point is the purchasing power and price of everything is set by global markets: the relative value of precious metals, currencies, commodities, labor, risk, credit--all are set by global markets. Any nation-state which presumes to anchor a price that suits its policy makers only creates a black market for whatever they are attempting to control.

Fiat currencies arose to escape the limitations of "sound money" generated by credit and trade. The problems of fiat currencies are well-known: the temptation to create more currency is irresistible. If currency is simply printed, per Modern Monetary Theory (MMT), a.k.a. debt-free currency, we end up with billion-dollar bills because the increase of currency above and beyond the increase in production of goods and services reduces the value of each unit of currency.

Borrowing money into existence by selling Treasury bonds serves to limit the collapse of currencies, but it imposes interest payments (mostly paid to the wealthy who own 90% of the nation's financial wealth) which drain the economy of vitality, leading to stagflation / decline.

We need to start thinking outside the current system, which has no solutions: debt-free money leads to billion-dollar bills, "sound money" (gold or bitcoin, it doesn't matter) ends up in the hands of the wealthy and borrowing money into existence leads to stagnation as soaring interest sucks the economy dry.

I have explored money in two books:

Money and Work Unchained and

A Radically Beneficial World, which proposes a system that creates new money at the bottom of the wealth-power pyramid rather than at the top. Yes, I understand this is wildly impractical in the current zeitgeist, but all conventional monetary systems run aground on their intrinsic limits / flaws, we'll have to start somewhere other than the status quo.




New podcast: Tommy Carrigan and I discuss the Fourth Turning

New podcast: Self Reliance & The Importance of Choice (24 min), Part 2 in a three-part exploration of self-reliance.

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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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Could US Treasuries Become the Trade of the Decade?

The expediencies and policy extremes have yet to be explored, much less exploited.

Napoleon is reputed to have said, "Do you know what amazes me more than anything else? The impotence of force to organize anything." This is the lament of someone holding the reins of power: that this earthly power has limits.

Two things amaze me:

1. The public's complacent confidence in the permanence of the global financial system. Put another way, what amazes me is the scarcity of awareness of the financial system's fragility and vulnerability to collapse, a fragility that has increased as a result of policy extremes enacted to maintain a facade of security and confidence.

2. A general lack of appreciation for how few steps we've taken on the path of extreme central state/bank policies, a path that stretches over the horizon, beyond what we conceive as possible.

This complacency extends to proposed solutions to this systemic fragility. For example, many believe that all we need to do to fix the system is return to sound money such as the gold standard or a bitcoin-based system.

The possibility that there are no solutions doesn't compute, as it goes against the zeitgeist of optimism: of course there's a solution, preferably a technological solution that enables a trillion-dollar monopoly or cartel.

The widespread confidence in a predictably secure financial future is equally amazing. Sixty years of stability has generated a recency bias of immense strength: of course we can plan our retirement 20 years hence, for the future will naturally be a seamless extension of the recent past.

The more one knows about the global financial system, the greater one's appreciation of systemic risk. The more one knows about the normalization of extreme policies enacted to stave off the collapse of the system in 2008-09, the greater one's appreciation for the vulnerability of a system propped up by expediencies that are now permanent scaffolding for a system that is by design self-liquidating: all the "money"-printing, debt and leverage will dissolve because they will have no other choice but to dissolve.

To Napoleon's point, there are limits on solving the problems created by "money"-printing, debt and leverage by printing more "money" and expanding debt and leverage.

Which brings us to the question: how will those in power put off the inevitable end-game as long as possible? Per Napoleon, their powers are earthly and limited. But this doesn't mean they're already exhausted. If the history of financial crises / depressions is any guide, authorities have barely started exploiting the grab-bag of expedient measures available to them.

Which brings us to US Treasuries. The expedient game plan for the past 15 years was to inflate a global Everything Bubble via expanding "money"-printing, debt and leverage, on the implausible but oh-so appealing theories that 1) borrowing more from future earnings and resources was painless and 2) inflating the wealth of the already-wealthy would generate a pain-free "wealth effect" some of which would trickle down to the working stiffs who don't own any of the assets being pushed into orbit.

We can summarize this "plan" thusly: save every asset class and every constituency. There was something for everyone in the grab-bag of expedient deficit-funded giveaways and bubble-economics.

Now that the hangover phase of the party looms, those in power won't be able to save everything and everyone: a bunch of stuff is going to be tossed overboard. This triage--who keeps a seat in the lifeboat and who's tossed overboard--is tricky. The bottom 60% have already been tossed overboard, and those between the top 10% and bottom 60% have been stripped of their life vests.

In other words, the bottom 90% are already either treading water or on the way to Davy Jones' Debt-Serf Locker. Inflicting more pain on them raises the risk of social-political revolt, and so those in power will have a lamentably limited set of assets and constituencies to stripmine. Making it even trickier, this set of constituencies holds virtually all the nation's wealth and political influence.

The first step in crisis is to save what must be saved to keep the ship afloat: the federal government's ability to borrow more money and float that rising debt by selling Treasury bonds. This isn't just a necessity for the domestic status quo, it's also a necessity for the Imperial Project, which must have the capacity to "export" dollars in size globally to preserve the benefits of issuing a reserve currency.

The obvious way to save what must be saved is to reward owners of Treasuries and punish everyone else: make owning Treasuries safer and more lucrative than owning any other asset.

The conventional mind rebels at this: no way would the government punish all other asset classes. Alas, livestock being herded to the next pen might voice the same confidence based on recency bias: so far, we've been treated splendidly.

Yes, so far. But when push comes to shove, who's positioned to overthrow the state and who's a minion of the state? As various pundits have observed, quantity has its own quality. It's far less risky to push 1 million wealthy overboard than to push 100 million already disenfranchised overboard.

The possibility of requiring a percentage of 401K and IRA retirement accounts be invested in Treasuries has been floating around for years. This is an excellent policy option, but it leaves the super-wealthy free to hoard non-Treasury assets. That will have to change, as the top 10% own 90% of all financial assets.

The new game will be to push a significant percentage of the $300 trillion in bubble-assets sloshing around the global economy into Treasuries. The grab-bag of policy options is capacious: everything from outright expropriation to wealth taxes to windfall taxes to restrictions on ownership are all available: mix and match, try a few or try them all.

The restlessly disgruntled disenfranchised will support wealth taxes and windfall taxes because they won't be paying them. They'll also support active efforts to track down and punish wealthy evaders of these taxes, and the eradication by any means necessary (ahem) of all the tax havens the Empire has left alone in coddling its financial elites.

Wealth taxes and windfall taxes are easy sells: why shouldn't the wealthy pay more? At the same time, ease the taxes due on income flowing from Treasury bonds, and voila, the calculus of risk and return change: why own an asset that will be taxed at 80% when sold? Why own an asset whose income stream now carries a higher tax rate?

All of these policies rewarding Treasury owners and punishing every other asset class can be sold as serving the public good and protecting us from risk. Every one can start with a single twist of a screw that is then tightened at regular intervals.

Unbeknownst to the financial elite who has benefited so enormously from the past 15 years of bubble-economics, they're not as indispensable as they believe. They can be tossed overboard and replaced with a new elite who understands the game has changed from inflating Everything Bubbles to funneling capital into Treasuries at scale.

Please understand it's nothing personal. It's just business. Those who feel their wealth and power are untouchable will discover the rules will change overnight, and keep changing, and going along to get along might be the best strategy: sell everything and buy Treasuries.

We might even find there's a new category of dangerous terrorist: the financial terrorists who hoard wealth by evading the policies protecting our security and freedom. Rendition them to the 'Stans, baby, they have it coming.

All earthly power is limited, but that doesn't mean it's as toothless as many presume. The expediencies and policy extremes have yet to be explored, much less exploited.

Save what must be saved to keep the ship afloat. Is there any doubt what qualifies? Tax breaks for the super-wealthy? The Everything Bubble? Um, guess again:



Quantity has its own quality:




New podcast: Tommy Carrigan and I discuss the Fourth Turning

New podcast: Self Reliance & The Importance of Choice (24 min), Part 2 in a three-part exploration of self-reliance.

---

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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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

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Staving Off Revolution

If the leadership chooses happy-story PR and toothless reforms for show in the hopes it will all blow over, these subterfuges have the potential to push dissatisfaction beyond the point of control.

Whatever else we might say or think about the leadership class, they tend to have a keen sense of self-preservation. The ability to issue optimistic visions of sunshine and unicorns with a straight face is valuable, to be sure, but so is the ability to sense that the BS is no longer working and something must be done to stave off a potentially career-ending collapse of confidence.

As a general rule, the ability to maintain a delusional confidence that it's all going to work out just fine tends to end very poorly for the leadership class. However sincerely it may be uttered, let them eat brioche doesn't resolve the extreme asymmetries that generate revolutionary disorder. Something more is required, something that either reduces the asymmetries of wealth and power or gives the appearance of doing so.

Staving off revolution requires some action that benefits those for whom the status quo is no longer working. While borrowing and distributing "free money" works for awhile, this profligacy generates its own destabilizing dynamics, and so eventually reducing the asymmetries of wealth and power requires the leadership to take a chunk out of the perquisites and spoils of the financial elite.

Since the leadership class is either beholden to the financial elite or has dual membership in both clubs, the leaders are quickly declared "traitors to their class" even as they are acting to stave off the overthrow of the predatory financial elite that pushed asymmetries to destabilizing extremes.

In other words, the leaders saving the financial elite from the consequences of their own rapacity will get no credit from those they're saving. Rather than grasping that giving up 10% of their gains will preserve the remaining 90%, the infinite greed and hubris of the financial elite locks their minds in a delusional fantasy that their wealth and power are "deserved" and therefore untouchable.

That the system is rigged so that every pitch is a gentle toss and every base hit becomes a home run is conveniently ignored.

That doing nothing could lead to a one-way ticket to Devil's Island issued by a revolutionary government doesn't compute. That they could soon be fighting over the MREs occasionally flung from aircraft doesn't penetrate their hubris-soaked echo chamber of entitlement. The task of saving their own class falls thanklessly to the leadership.

Policies that would have been rejected out of hand as politically impossible become normalized as leaders rush to stave off revolution. The historical path from complacency to denial to policy extremes is well-worn: first the leadership tries the sunshine and unicorns cover story. When this fails to satisfy the disenfranchised mob, the leaders issue grand sounding edicts that suggest "hope and change" is right around the corner.

Once this well-used ploy fails to quench the social distemper, then the leaders accept that "when things get serious, you have to lie," and so they lie, at first to cool the ugly sentiment and then to buy time.

Eventually, some real action has to be taken, and then it gets dicey. There are mistakes to be made in any policy choice: doing nothing can trigger disaster, but so can doing too little or too much. The luxury of calibrating a response is no longer available, and so extreme policies are thrown at the wall until something sticks.

Those who counseled caution are cashiered, for their advice led to the current crisis. Those who counseled radical responses are elevated and freed to unleash whatever they claim will work like magic.

But alas, by this late stage, magic is in short supply, and extreme policies set off second-order consequences no one anticipated, except perhaps those overly cautious voices who did not understand that the option of good choices had long since dissipated, and the only options left were bad or possibly worse than merely bad.

The extremes of wealth-power asymmetries that generated the crisis are eventually matched by equally extreme policies designed to stave off the overthrow of the ruling elites. If these actually rebalance what was allowed to drift out of balance, order and stability can slowly be restored.

If the leadership chooses happy-story PR and toothless reforms for show in the hopes it will all blow over, these subterfuges have the potential to push dissatisfaction beyond the point of control, and predictions about the next stage of events become folly: beyond this event horizon, anything becomes possible.




New podcast: Tommy Carrigan and I discuss the Fourth Turning

New podcast: Self Reliance & The Importance of Choice (24 min), Part 2 in a three-part exploration of self-reliance.

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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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What Orwell and Huxley Got Wrong and Kafka Got Right

What Kafka got right is how societies can become busily dysfunctional.

For self-evident reasons, the fictional visions of Orwell and Huxley resonate as maps to the present distemper. Orwell's account of full-spectrum technological totalitarianism maps Big Tech's mastery of Surveillance Capitalism and governments' full-spectrum surveillance powering the fine-grained coercion of social credit scores and related tools.

Huxley's vision of a doped-up, med-dependent populace that loves its servitude also maps the present. Indeed, not only do we love our servitude, which manifests in our endless addictions and dependencies on everything from debt to junk food to painkillers, our servitude has been so normalized that we don't even recognize the servitude that underpins "normal life."

What Orwell and Huxley got wrong is the limits of these nightmarishly effective systems of control. Full-spectrum technological totalitarianism can certainly enforce compliance with the desired behaviors and expressions of consent, but it can't force individuals to have ambition or creativity, to marry for love and children, or possess values or beliefs beyond the superficial lip-syncing of compliance.

The coercive structures of the Surveillance State and Surveillance Capitalism are intrinsically inauthentic, ersatz, hollow, demanding an entirely artificial and easily faked appearance of consent that mimics devotion to the principles and narratives being shoved down the throats of the populace.

These structures enforce what isn't allowed and superficial compliance, but they can't force what actually makes a society functional: the convictions, hopes and values that inspire individuals to marry, raise a family and pursue self-expression via achievement. What actually happens in societies controlled by the Surveillance State and Surveillance Capitalism is decay and decline, as young people abandon ambition, marriage and raising children by lying flat and letting it rot, expressions of young people in China that speak to youth everywhere where compliance is more important than individual liberty.

If you doubt these dynamics, please observe the dismay of authorities as their national marriage and birth rates collapse. All sorts of explanations for this collapse are offered, except the ones that count: societies that require an appearance of consent are inauthentic, hollow shells.

The same can be said of doped-up, med-dependent, entertainment-addicted societies that love their servitude. Individuals give up ambition, marriage and raising children due to soaring costs, out-of-reach financial security, and the debilitating consequences of all the Soma, meds, addictions, distractions and derangements that are accepted as "normal."

What Kafka got right is everyone's super-busy but nothing gets done. In Kafka's novel The Castle, the bureaucracy toiling unseen in the Castle is bustling 24/7, but nothing actually gets done in the impoverished village below. Attempts to reach the bureaucracy by phone are futile, as calls are only picked up randomly or as pranks.

("You've reached the DMV, the IRS, Xfinity, Engulf and Devour Healthcare, etc. Your call is very important to us...")

In Kafka's fictional world, the authority to actually get anything done is always out of reach. In The Castle, the leader who supposedly has the power to approve projects sits isolated in his office, unreachable and unapproachable, though he can be seen reading a newspaper through a peephole. Whether he actually possesses the power to approve anything is an open question with no answer.

Kafka's world is one of cowed peasants bickering among themselves, nurturing grudges and speculating fruitlessly about the cloaked conspiracies of the authorities in the Castle. The sexual predations of the authorities and the dismal fates of they used and abandoned are described in whispers, and what work that is available is menial and poorly paid.

What Kafka got right is how societies can become busily dysfunctional, cluttered with unseen lines of authority that may not actually have the authority their official titles suggest, an inscrutably unreachable, unseen bureaucracy and an impoverished populace muddling along on gossip and rumors.

Stripped of gaslighting, fake optimism and empty exhortations to YOLO borrow and spend, that's a fair description of our current situation. Yes, yes, everything's wunnerful, it's The Roaring 20s all over again (never mind how the 1920s ended), AI is gonna make corporations trillions in profits by further immiserating the populace, oops I mean "improving productivity," and our tireless authorities are hard at work solving all our problems--don't you hear the whirring of the "money" printing presses running 24/7?




New podcast: Tommy Carrigan and I discuss the Fourth Turning

New podcast: Self Reliance & The Importance of Choice (24 min), Part 2 in a three-part exploration of self-reliance.

---

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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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, BigTlidee ($50), for your magnificantly generous subscription to this site -- I am greatly honored by your support and readership.		Thank you, Douglas G. ($50), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

Thank you, Jason P. ($50), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.

Thank you, Zoltan L. ($50), for your superbly generous subscription to this site -- I am greatly honored by your support and readership.

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