Tag: stagnant wages

‘End of the world’: This futurist has some grim news for the middle class

Via Marketwatch

‘This figure is the end of the world for the average people. It reflects a rather depressing picture: The state and the economy are advancing by storm — but the workers are almost not benefitting from this progress and are left behind. It is almost a catastrophe.’

That’s Dr. Roey Tzezana, a “future studies” researcher at Tel Aviv University and a research fellow at Brown University, referring to the growing gap between labor productivity and wages, as seen in this chart:

In other words, as automation continues to render jobs obsolete, the divide between the rich and everybody else will only continue to grow, and the middle class as we know it will cease to exist. Such a scenario will create a society of extreme pockets of wealth and those who can barely get by.

And that’s a problem for everybody, he said.

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BULL IN A CHINA SHOP

“So the modern world may be increasing in technological knowledge, but, paradoxically, it is making things a lot more unpredictable.” – Nassim Nicholas Taleb, Antifragile: Things That Gain From Disorder

“Success brings an asymmetry: you now have a lot more to lose than to gain. You are hence fragile.” – Nassim Nicholas Taleb, Antifragile: Things That Gain From Disorder

I had read Nassim Taleb’s other best-selling tomes about risk, randomness and black swans – Fooled by Randomness & The Black Swan. They were not easy reads, but they were must reads. He is clearly a brilliant thinker, but I like him more because he is a prickly skeptic who scorns and ridicules academics, politicians, and Wall Street scumbags with gusto. There were many passages which baffled me, but so many nuggets of wisdom throughout each book, you couldn’t put them down.

When his Antifragile book was published in 2012, the name intimidated me. I figured it was too intellectual for my tastes. When I saw it on the shelf in my favorite used book store at the beach, I figured it was worth a read for $9. I’m plowing through it and I haven’t been disappointed.

His main themes are more pertinent today than they were in 2012. He published The Black Swan in 2007, just prior to one of the biggest black swans in world history – the 2008 Federal Reserve/Wall Street created financial collapse. His disdain for “experts” like Bernanke, Paulson, and Wall Street CEOs, and their inability to comprehend the consequences of their actions and in-actions as the financial system was blown sky high, was a bulls-eye.

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WHAT THE HELL IS GOING ON? (PART TWO)

In Part One of this article I exposed the establishment narrative of a strong economy as rubbish by providing hard data regarding imploding gasoline usage, failing bricks and mortar retailers and plunging restaurant sales.

“Inflation may indeed bring benefits for a short time to favored groups, but only at the expense of others. And in the long run it brings ruinous consequences to the whole community. Even a relatively mild inflation distorts the structure of production. It leads to the overexpansion of some industries at the expense of others. This involves a misapplication and waste of capital. When the inflation collapses, or is brought to a halt, the misdirected capital investment—whether in the form of machines, factories or office buildings—cannot yield an adequate return and loses the greater part of its value.Nor is it possible to bring inflation to a smooth and gentle stop, and so avert a subsequent depression.” – Henry Hazlitt – Economics in One Lesson

Inflation is the opium of the masses. The establishment’s interest in dumbing down the masses through government controlled public school indoctrination couldn’t be clearer than examining the chart below. The average non-thinking, math challenged, iGadget distracted, media controlled pawn thinks their household income has risen by $6,000 since 2008 because they have no understanding of Fed created inflation.

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SOMETHING WICKED THIS WAY COMES

I stopped trying to predict markets back in 2008 when the Federal Reserve, Treasury Department, Wall Street bankers, and their propaganda peddling media mouthpieces colluded to rig the markets to benefit the elite establishment players while screwing average Americans. I haven’t owned any stocks to speak of since 2006. I missed the the final blow-off, the 50% crash, and the subsequent engineered new bubble. But that doesn’t stop me from assessing our true economic situation, market valuations, and historical comparisons in order to prove the irrationality and idiocy of the current narrative.

The proof of this market being rigged and not based upon valuations, corporate earnings, discounted cash flows, or anything related to free market capitalism, was the reaction to Trump’s upset victory. The narrative was status quo Hillary was good for markets and Trump’s anti-establishment rhetoric would unnerve the markets. When the Dow futures plummeted by 800 points on election night, left wingers like Krugman cackled and predicted imminent collapse. The collapse lasted about 30 minutes, as the Dow recovered all 800 points and has subsequently advanced another 1,500 points since election day. Krugman’s predictive abilities proven stellar once again.

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INFLATION ABOUT TO EXPLODE HIGHER

“Those who are capable of tyranny are capable of perjury to sustain it.” ― Lysander Spooner

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We all know the BLS artificially suppresses the CPI through bullshit substitution adjustments, quality adjustments, and various other incomprehensible hedonic adjustments made by government apparatchiks at the behest of their politician bosses. Some obscure theoretical academic  calculation called owners equivalent rent accounts for almost a quarter of the CPI weighting.

It has no relation to reality as it has increased by only 12% since 2012, while the Case Shiller Housing Price Index is up 52% over the same time frame. The median price of existing home sales is up 30% over the same time frame. It also has no relation to rent increases, as they have gone up 22% nationally since 2012. It’s essentially a made up number by goal seeking bureaucrats doing the bidding of their establishment masters.

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THE ANTI-CINDERELLA MAN (PART TWO)

In Part One of this article I made a fact based case that most Americans are experiencing an economic depression on par with the Great Depression of the 1930’s. In Part Two I will compare and contrast two very different men who raised the spirits of the common man during difficult economic times. As we approach the perilous portion of this Fourth Turning, it will take more than hope to get us through to the other side.

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Cinderella Man

Likening Braddock to Trump might seem far-fetched, until you think about parallels between the economic conditions during the 1930’s and today, along with the deepening mood of crisis, despair and anger at the establishment. Braddock’s career coincided with the last Fourth Turning. James J. Braddock was born in 1905, to Irish immigrant parents Joseph Braddock and Elizabeth O’Toole Braddock in a tiny apartment on West 48th Street in New York City. His life personified that of a GI Generation hero. One of seven children, Jimmy enjoyed playing marbles, baseball and hanging around the old swimming hole on the edge of the Hudson River as a youngster. He discovered his passion for boxing as a teenager.

Braddock refined his skills as an amateur fighter and in 1926 entered the professional boxing circuit in the light heavyweight division. Braddock overwhelmed the competition, knocking out multiple opponents in the early rounds of most fights. As a top light heavyweight, he stood over six feet two inches, but seldom weighed over 180 pounds. But his powerful right hand was no match for opponents that weighed close to 220 pounds. His star was ascending. He earned a shot at the title in 1929. On the evening of July 18th 1929, Braddock entered the ring at Yankee Stadium to face Tommy Loughran for the coveted light heavyweight championship. Loghran avoided Braddock’s deadly right hand for 15 rounds and won by decision. Less than two months later the stock market crashed and the country plunged into the Great Depression.

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THE ANTI-CINDERELLA MAN (PART ONE)

There are several movies I will watch every time they are aired on one of my generally useless 600 cable channels. They all have the same thing in common – a compelling character portrayal which keeps you riveted and mesmerized by how the protagonist deals with adversity and circumstances beyond their control. The movies I can’t resist include: The Godfather I & II, The Green Mile, Shawshank Redemption, Apocalypse Now, and Patton. Another captivating movie, which didn’t do well at the box office, is Cinderella Man. The portrayal of Depression era heavyweight boxing champion James J. Braddock by Russell Crowe is inspirational, with a rousing and improbable victory by the champion of the common man. While watching this great movie a few weeks ago I found myself equating the themes to the current presidential campaign.

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The Greater Depression

Braddock was an inspiration to all downtrodden demoralized Americans during the Great Depression. The parallels between the 1930’s Great Depression and today’s Greater Depression are uncanny, despite the propaganda emitted by the establishment politicians, media and banking cabal that all is well. The corporate mainstream media faux journalists scorn and ridicule anyone who makes the case we are currently in the midst of another Great Depression. They are paid to peddle a recovery narrative to keep the masses ignorant, sedated, and distracted by latest adventures of Caitlyn Jenner and the Kardashians. An impartial assessment of the facts reveals today’s Depression to be every bit as dreadful for the average American as it was in the 1930’s.

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