Guest Post by Jim Kunstler
“American exceptionalism has led to a country that is exceptionally un-self-aware.” — Peter Thiel
The economic contraction ahead will put this borderline psychotic country through some interesting ch-ch-ch-changes. Mr. Trump now fully owns the Potemkin status quo of record stock markets poised against a withering rot of human capital at the core of an industrial society in sunset mode. Leadership at every corner of American life — politics, business, media — expects an ever-higher tech magical updraft of fortune from an increasingly holographic economy of mere fugitive appearances in which everybody can get more of something for nothing. The disappointment over how all this works out will be epic.
Globalism is wobbling badly. It was never what it was cracked up to be: a permanent new plateau of exquisitely-tuned international economic cooperation engineered to perfection. It was just a set of provisional relations based on transient advantage. As it turned out, every move that advantaged US-based corporations blew back ferociously on the American public and the long-term integrity of the social order. Sinister as it seems, the process was simply emergent: a self-organizing evolution of forces previously set in motion. And, like a lot of things in history, it seemed like a good idea at the time.
“Off-shoring” US industry jacked up corporate profits while it decimated working class livelihoods. In return, that large demographic got “bargain shopping” at Walmart, a life of ever-upward revolving debt, and dead downtowns. The country got gigantic trade deficits and government debt loads. In effect, globalism compelled America to borrow as much as possible from the future to keep running things the way they were set up to run. Now, there is just suspicion that we’ve reached the limits of borrowing. Soon it will be a fact and that fact will upend everything we’ve been doing.
You can see how this is playing out in politics, especially the proposed government-enforced redistribution of whatever wealth is supposed to be left. Of course, much of that wealth is a figment, represented in abstract financial instruments pegged to “money” that may have a lot less value than presumed. The Democratic Party detects opportunity in the gross imbalances of this notional capital and so they are promising every conceivable form of grift to voters from a guaranteed basic income and free medical care and college education to reparations for the descendants of slaves.
They certainly might win the 2020 election on the basis of that proffer, but good luck scaring up the actual financial mojo to make it happen without destroying whatever value remains in the US dollar. The predicament may be aggravated by foreign capital seeking refuge in US financial markets as the banking systems in China and Euroland unwind, giving politicians the false impression that other people’s money belongs to Americans. And anyway, what will these foreigners actually be investing in here? Collateralized loan obligations based on seven-year used-car payment schemes?
The American Left just can’t grok the fact that we missed the window of opportunity for setting up a national health system. That was a mid-twentieth century thang: cheap oil and industrial growth. Please note: it was the Democratic Party under Mr. Obama that turned the college loan industry (and Higher Ed with it) into the appalling racket it’s become, because it fit the template of a society pretending to prosper by racking up debt. That demographic of debtors will be seeking magical debt relief. If they get it, it will be at the expense of the government that took on the guaranteed backing of all that debt, now well over a trillion dollars.
Industrial growth is over, and with it the expectation that all the old debts can be paid back. A few economic commentators are predicting “stag-flation.” We’d be lucky if that’s all it turned out to be. But we’re unlikely to get a re-play of the 1970s. That was an era of geo-financial disturbance that resolved for a while with new oil from Alaska and the North Sea. That’s not going to happen again this time. Stag-flation was just a matter of going nowhere for a decade. The contraction ahead will be brutal, not going nowhere but rather going down hard to a lower and harsher standard of living.
It’s also hard to calculate how disturbing and disruptive the prosecution of the RussiaGate perps will be. If the Democratic Party is acting batshit crazy about it now after the Mueller testimony fiasco, how will they react when dozens of their partisans are marched into court to face charges of sedition. That ugly business looks on-track to collide with the coming financial distress. The result will be much more severe political turbulence than the thinking class expects. It’s easy to imagine circumstances in which normal institutions get suspended and the old major parties are superseded by “emergency” seizures of power by other parties as yet unknown.
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What is that Chinese curse, may you live in interesting times????
And she’ll have fun fun fun till her daddy takes her T-Bird away
“Off-shoring” US industry jacked up corporate profits while it decimated working class livelihoods. In return, that large demographic got “bargain shopping” at Walmart, a life of ever-upward revolving debt, and dead down towns.”
Like I’ve said, do want jobs or cheap stuff? Seems to me the peeps have spoken.
Question: Does this mean the same thing as “Economic and Moral Collapse”?
“Potemkin status quo of record stock markets poised against a withering rot of human capital at the core of an industrial society in sunset mode”
Because I think the poetical language is wasted on such a dismal image.
This ” off shoring ” was deliberate plan to destroy the white working to middle class people of America. They knew they had to take out this part of America before they could ever bring in their one world government. Sure there is greed but greed doesn’t explain everything. Make this part of America poor ,debt ridden and in a state of decline to the bottom then pull the plug on the whole financial system. It is in their writings. Our rulers are not human. They have no guilt about destroying us or America. When the time is right they will genocide all resistance. Most haven’t studied these treasonous bastards like I have for the last several years. I know their plans.Hell they brag about it.
There aren’t going to be any perp walks of the guilty as Mr. Kunstler seems to believe there’ll be. Off-shoring happened because globalism. Kinda hard to compete against countries using slave labor and with absolutely no environmental regulation standards at all.
Obama had his fingers in a lot of pies, said pies being the destruction of America as we knew it. Not one Republican voted for Obamacare, the ‘we have to pass it to see what’s in it bill’ and not only did that destroy what little affordable healthcare there was, it ushered in mega unaffordable health insurance and pharmaceutical through the roof costs. Obama also tied student loans to the Unaffordable Health Care Act, something Kunstler didn’t note when he mentioned Obama.
Obama destroyed race relations, he and Holder couldn’t prosecute ‘their people’ for crimes because ‘racism’ and everything was racist. Poor Michelle had to live in a slave built mansion and when she had her lavish vacations on the taxpayer dime, most of those taxpayers were white and racist so they deserved to pay for her opulent lifestyle. The Marxist SJW universities flourished under Obama, ditto Antifa and Black Lives Matter and a host of other racist organizations created to destroy white people.
Bush saw the cake of financial collapse being frosted, Clinton baked the caked via repeal of Glass-Stegal and selling out to the Chinese for lots of money and favored nation status, and Trump gets the cherry on the cake and will be the fall guy when the spinning plates come tumbling down….
Poetical language is never wasted.
How this plays out in the long run is about the same, the country goes broke at a level that leads to money devaluing at a pace that feels like a collapse to most of us not wealthy enough to take the hit. True hyperinflation also includes a near complete loss of faith in the government. This is well on the way, beyond a handful of Republican technocrat types and some of the hardcore leftists that want to be the saviors of the US via communism 2.0. Barring unforeseen incidents like a huge quake in CA or something along that lines, the first shoe to drop seems to be Medicare.
Medicare is going to become quickly insolvent, on pace to only have 25-30% of the money needed by 2024-ish. The Dems basically all want Medicare (medicaid) for all. Clearly this would be the biggest disruption and shit show gov’t has ever tried to undertake. It costs billions to make a website and it took over 2 years for it to work. Yet, they want to change 20% of the economy. Medicare paperwork and such is already over the top and they pay about 30% less than private insurance. You have endless amount of hospitals named after and supported by large Health Care co’s etc. The sheet amount of chaos that would ensue would be insane. I honestly don’t think they could do it no matter how slow they try to transition it. It would lead to a quick collapse, especially since its almost certain we will be in a much quicker collapse by 2023-2025 anyway given the basic metrics and demographics. If they add illegal aliens to the mix it will be even worse. Plus nearly every state has massive unpayable Pension obligations, and they will probably look to the Fed to try and save them once all their bonds are rated utter garbage to the point no one buys the debt. Would any reasonable person want to own Chicago’s pension debt 5 years from now?
Regardless, what is proposed to “fix” medicare will be interesting, assuming the Dems don’t get the senate and the white house in 2021, if so the quicker collapse will be in effect for certain. I’m still hoping Trump and the Rep’s hold on, gain some seats from the commies, so we can have a bit slower collapse. Either way the ship is sailed, there are not true fixes, they can’t even reasonably fix Social security and that is the most solvent of the bunch. Sure they can drop the caps and such and screw the upper middle class and above folks, but that alone will no longer do it. Also SSD is amazingly in the hole and will only get worse as the chained migration folks joing the rolls of fake mental health diagnoses–leading to monthly SSI checks for everyone. Don’t see any end to that, they list just gets bigger and bigger, literally. Too fat, SSI check for you! Depressed b/c Trump is mean on twitter, SSI check for you! The whole gov’t racket is set to fall apart and collapse on so many levels, its nearly pick your poison. Mind you I pick the slower version, not the quicker. Not that it will change anything, b/c its 100% definitive that there will be no progress the country is in utter moral decay, broke into tribes and victim groups and so debt fucked from the local/city/state/federal levels that nothing will grow our way out. Illegals and Medicare for all would just be the hammer dropping, rather than watching the money buy amazingly less once the real shit show starts. This has basically been building slowly since the 70’s but wow has it really taken off since the late 90’s. Carpe Diem means more each day, hope the future better involve some religous belief, rather than the commies that worship Gov’t if you want hope.
So the repos are really going to go after the dummos? I’ll believe it when I see it. Seems to me they’re both on the same side-Just look at the way they passed the latest spending bill. Here’s the dilemma: The MMT theory tells us the government should print currency units in whatever amounts necessary to fund ‘necessary’social programs. Can the repos now go back to whining about the budget deficit when they do? So The Bernank printed up 4 trillion bucks to fund tarp and bail out his bastard bankster buddies including Legs Dimon’s $30 mil ‘bonus’ but not that much to fund health care for average Muricans? It’s going to be an interesting battle.
“As it turned out, every move that advantaged US-based corporations blew back ferociously on the American public and the long-term integrity of the social order. Sinister as it seems, the process was simply emergent”
Simply emergent? Sure it was. Nobody with an IQ above room temperature believes this was not the intended end goal from day one. Outside of those still in denial, nobody has any doubt about who is responsible, either.