Has the American Dream been eaten by the glut of giant government?
We need reform – but first, we need a recession - Part 2 of “the failure of big everything”
The most important thing you can say is “I love you.” Second is “I’m sorry.” Third is “I forgive you.” And fourth is “but the data says…”
The US is a very special place. It’s unrealistic to talk about our current failures without recognizing this. The US economy, and its historical global impact, are hard to overstate. The poverty line we defined in this country in 2019 would have been seen as extreme wealth anywhere else in the world a half century ago, and the innovations our collective knowledge and experience have brought to the world have cleaned water, reduced diseases, fed billions of people, and literally brought light to the world. But gluttony is one of the 7 great sins for a reason – eating yourself to death is a very painful way to go. And we are eating ourselves to death.
Where to Start
One of my favorite classes in grad school was an economics class on the wealth of nations. A lot has been written on how economies evolve but to simplify this way down, the wealth creating capabilities of a nation are dependent on the variability of its economy, and the variability of an economy is, primarily, and was, prior to the technology revolution, entirely, driven by the diversity of its natural resources. The single largest reason the US still exists as a single country, despite numerous attempts to break it into pieces, and why we’ve continued to consolidate land all the way through Alaska, is that great leaders understood how valuable the diversity of our natural resources were/are.
This diversity of natural resources allowed hundreds of micro economies to evolve naturally across the US and build the greatest internal trading platform every seen in a nation state. We have fresh water, abundant land, minerals, energy, soil, trees, and on and on in an abundance not seen anywhere else in the history of the modern world. We cannot discuss where we are today without first recognizing these realities. Combine how plentiful our natural resources are with the hardworking and can-do spirit that created American exceptionalism and you have the greatest economy the world has ever known.
We’re also a nation of humans – which means there was fraud, and coercion, and extortion, and horrible working conditions, and slavery and pseudo slavery, all justified as part of the path to economic maturity. Ours is history of great accomplishment. It is also a history, like all histories, of an imperfect people.
Unique micro-economies formed all across this great nation to leverage these natural resources and maximize the efficiency of their extraction, transformation, distribution, and consumption. Our farming experts in the Midwest created means and mechanism for food production that changed the world and built a culture around agriculture. The architects and engineers that built Chicago and Detroit became famous the world over to support the center of trade and commerce created by Sears, Ford and General Motors. Boston became the hub of technological innovation, North Carolina the home of flight, and New York the home of Broadway and Wall St. We redefined modern cities and redefined modern distribution and farming hubs. Texas became the home of oil, California the home of gold and west Virginia the home of coal. These hubs enabled innovation unimaginable without the concentration of knowledge, experience, and wealth that existed in each. The diversity of these experiences, and the innovation this diversity spawned, lead to the greatest quality of life evolution ever seen, both at home and abroad. It also created more opportunity for more people than any place on earth.
And slowly, and then much more quickly, the greatest economy in human history began to eat itself.
I’ve asked many people why they think we have federal taxes, and it amazes me how few people ever stop and think about the purpose, and the goal, behind forcing citizens to unwilfully donate somewhere between 0 and 45% of every dollar they earn to the largest and most inefficient bureaucracy in human history. Every democrat knows we spend too much money on our military (every Democrat LOVES the military) and every republican thinks we spend too much money on social programs (every Republican LOVES social programs) but none of them have any idea how much we actually spend, or why, or, as should be most important, how it impacts their lives or the lives of those around them. And if they do understand it, they never ask the next logical question which is: if the government didn’t exist, and that money stayed in the market as non-coerced demand or corporate capital investment, how would it be different?
Ask the tax question, especially to big government loving lefties, and you’ll get lots of “infrastructure” comments. Bu then you ask if they actually think every road and bridge in this country (and airport for that matter) was built after 1950 and they’re pretty sure it wasn’t, so it’s hard to correlate federal taxes and infrastructure. So, what, exactly, do we spend all this money on? We know a TON of it goes oversees for wars we probably shouldn’t be fighting, and to provide “foreign aid,” which is really just money laundering for the US Government (we give them aid, they use it to buy dollars, we can then borrow and print more money to give to them to buy more dollars – it’s a beautiful virtuous cycle that does nothing but hurt poor people and make the government bigger). We know a TON of it goes to shortening our lives and significantly increasing drug dependencies through our entirely broken medical infrastructure. And the rest of it? Well, I figure the rest of it goes to spending 750k per homeless person in LA x a couple million similarly corrupt money laundering schemes (300k for private security for politicians calling to defund the police, you know, these sorts of things)1 all across the country. Ask me where else it goes and I genuinely can’t tell you. It’s impossible to account for that much centralized spending that disconnected from the lives of actual individual citizens.
But before we go any further, let’s get a few things documented and on the record:
https://usgovernmentrevenue.com/revenue_chart_1900_2020USb_23s1li011tcny_F0fF0sF0l
That is the chart of US tax revenue. It is called “direct” revenue because it only tracks the revenue the US government collects directly from its citizens. This is important because the US did collect federal taxes prior to 1916, but they were primarily earned the way federal taxes are supposed to be earned – by taxing OTHER countries through import and export tariffs. Direct federal taxes did not become law (they briefly existed after the civil war to pay down debt but were repealed and determined to be unconstitutional very quickly thereafter) until 1916 when an amendment to the constitution was ratified.
The 1916 Revenue Bill created the foundation of modern taxes, but went through many stops and starts, beginning with a tax rate of 1% for bottom earners and 7% for top earners. This moved around quite a bit in the early years as the government fought over how best to solve the legitimate crisis of the day – how to pay for WWI.
Of course, in retrospect, the 1916 Revenue Bill turned out to be the federal version of the IL toll road system – they swore it was short term and only to pay down the debt required for this very important project – but once they got a taste of the money (and the power) that came with these new taxes, they were never letting it go.
But power transfers slowly, and so for more than 35 years taxes existed primarily for the purpose they were ratified for – to manage the debt required to survive real crisis. Yes, once again, they were primarily government made crisis (with the exception of WWI) like the speculation and debt crisis (sound familiar) that lead to Black Tuesday – a crisis directly created by, sound familiar, a giant debt bubble created by low lending rates and asset-less speculative trading, but they were real crisis, in most cases of life and death, and both the government, and the tax base, managed to remain small, nimble, and focused.
And then the “New Deal” happened, the size of government, and the bureaucracy there included, exploded in size, “focus” became a four letter word and we began throwing money at any and everything that asked for it, regardless of if we had the money or not, and we still haven’t stopped.
From 1939 forward, taxes were, now, the predominant regulatory framework of modern American life. Whereas, following WWI, federal income taxes were marginal and used only to pay down federal debt, upon entry into WWII federal taxes now supported social, economic, and wartime expenses, and for a government in love with itself, there was no turning back. The 1969 recession officially changed things forever, with taxes REALLY exploding in the 1970’s as government decided that while yes, safeguards had been put in place specifically to prevent recessions, and had failed, the only possible solution was MORE regulation. And thus, the modern cycle of regulation, failure, more regulation, more failure, more regulation – MASS WEALTH CONCENTRATION officially began.
The phrase “the only certainly in life are death and taxes” is more a marketing slogan than a complaint – despite the US having existed longer without federal taxes than it has with. It’s the historical version of “2 weeks to slow the spread.”
The second piece of data is the US federal debt:
And the third is the US Trade Balance:
https://tradingeconomics.com/united-states/balance-of-trade
Looking at these charts, three things should stand out:
1. The bureaucracy of the United States loves, loves, LOVES to spend money (it has to – grow or die perfectly sums up bureaucracy)
2. We somehow went from essentially zero dollars in federal income taxes AND zero debt, to ridiculous tax revenue AND ridiculous debt (WELL into the Trillions), at the same time. Think about how hard that is. If we have federal taxes, we shouldn’t need to borrow money. When we took huge debt during WWI it made sense – no federal taxes, we borrowed from ourselves to produce the goods needed, then we taxed, and paid down that debt. In the 1960’s and 1970’s we flipped it on its head. After 2 decades of insanely frivolous spending that, SHOCKINGLY, lead to runaway inflation, the nation flipped on the insanely “progressive” policy of having the federal government “pay” for everything with money it didn’t have, only it was already way too late (sound like any other era you’re aware of? Today, maybe?). The State figured out how to tax like crazy but spend with SUCH enthusiasm that they increased revenue by literally infinity percent AND increased the national debt by infinity percent as well. That’s some impressive waste. Like almost indescribable and incomprehensible waste. Modern monetary theory, something that should make you throw up in your mouth, is literally built on the premise that fake money can and will support “us” forever (it only supports the EXTREMELY wealthy) – that it ends up simply being a tax on the rest of us is “we the people’s” problem, and lord knows they could give two shits about “we the people” – but we keep voting for bigger government because SOMETHING SCARY so they keep winning.
3. The third chart I included to highlight an economic principle. Capital, said very simply, can be invested in two things – inputs or outputs. Inputs are the means by which to create value and outputs are the means by which to capture value. Investing in inputs would mean things like raw materials and human capital to produce goods that can be sold elsewhere. Investing in outputs simply means buying shit. When we went crazy on taxing and printing it corresponded with us buying a LOT of shit from other countries. It is not to say none of the capital was invested in inputs, certainly some of it was, but the vast majority of it, to the tune of the greatest trade imbalance in human history, was invested in buying shit from other countries. This matters. Because points 2 and 3 are how the US went from being the most diverse economy in the world to a banana republic. We now, thanks to Biden killing energy independence, have only one net export – debt.
To go further we have to understand something. The US is not a “capitalist economy.” We do not have a free market, we do not enforce our anti-competitive framework, we do not have distributed demand, and the world’s largest corporations don’t exist to maximize shareholder value - they exist to maximize political value, and in exchange the politicians guarantee them demand. We are, instead, some form of a Statist economy. We are significantly closer to Russia in terms of the economic reality of our market than we are to the pre-WWII US.
What is a “Statist” economy you ask? It is a highly regulated market where the desires of the State, and not that of the participants in the market, determine the rules of the game. Everyone talks about socialism and communism, but these are really names for economic theories, or attempts at denoting given points on a continuum, and things are never that simple. “capitalism” is much the same. These are broad portrays of different ideal market structures. We need to live in, and analyze life through, the lens of reality, so we’re not going to play the game of trying to call our market “socialist,” because of the specific connotation that has, and its attempt to put what is still a rather variable market (especially if you look at local economies) onto a single point on the spectrum, and instead look at how we’ve moved along the economic spectrum away from free-market and toward Statism.
A Statist economy is not, by definition, bad. It is, of course, less “rational” than a truly free market, but it is also more efficient and more realistic. Every “modern” trading economy is Statist in some regard – that is, it is not truly free-market and at least some governance and regulation exists. Once you have an “economy,” that is not simply trade between two parties, but economic functions such as fiat, common investment platforms, etc… regulation is required. At the very least you can’t just let people steal everyone else’s property outright, so all economies require some regulation. There are basic market regulations included in the US’s founding documents, including the most important elements like land right, patent protection, and anti-monopolistic/anti-competitive governance (if we do ANYTHING as a nation, it’s bringing these principles back) – fundamentally prohibiting the stealing, or fixing, of supply or demand – the core ideals needed for “capitalism” to flourish.
As with everything in life, economic markets, and societal trading structures, exist on a spectrum. I, traditionally, define this spectrum as going from completely “free market” (steal whatever you want, own whatever you can defend, and trade it for whatever you can, however you can, with any trade partner willing and able… essentially economic anarchy) to a lord system whereby one person owns everything (including the labor) and doles it out, or doesn’t, exactly as only they see fit to all other participants in that market. Socialism fits somewhere in there, as does capitalism, but these are really just names for theories that hold some relative stretch of land on that continuum. Socialism is a theory that’s never been, nor never will be, actually practiced. Lord systems have been practiced all over the world for as long as it’s existed, unfortunately, and almost free market capitalism, or lightly regulated capitalism, has existed the world over as well. Everything in between are just stops on the perhaps inevitable train from functioning “free market” economies to Lord systems.2
From the end of WWII through the 1970’s the US slowly, but steadily, slid down that market continuum away from a mostly free market and toward a lord system, with different industries and states moving at different speeds. Remember, in the VERY early years of the US, truly unchartered land, like the west, was an actual free market. It was chaos. People stole, and cheated, and killed their way to land, and minerals, and property. That, obviously, was not functional, and so slowly but surely the core tenants of the market economies of the first settled colonies of the northeast, and later the Midwest in Chicago and Detroit, spread to the far corners of the country. You could argue that part of what caused Silicon Valley to rise in California was that it was still slightly behind, from a regulatory constraint structure, the east coast, making it more creative and freer to experiment and explore. It was also easier to steal and manipulate and mimic and price fix – just ask Microsoft.
And then, I’d opine, somewhere in the late 1990’s or early 2000’s, the US writ large officially passed the point where a mostly free market (there are still bastion states trying to hold on, but they’re being consumed as well – that Florida has half the budget of NY with almost identical population shows you exactly how bad this is – NY spends almost exactly twice as much money per citizen for infinitely worse outcomes – and yet their governor helped Biden win the presidency. You literally can’t make this shit up.) transitions to a mostly un-free market. As taxes grow, that’s the only possible outcome, and here’s what it looks like in practice:
https://tradingeconomics.com/united-states/government-spending-to-gdp
I recently had an economist argue with me on substack that my take on taxes as the root of all that bemires America was wrong because “government spending has been hovering right around 36% of GDP for 50 years.” And he’s right. It has. I asked him to go back 10 years earlier and tell me what he found? The answer is ~0. Prior to the 1940’s, and really even all the way into the mid 1960’s, government spending as percent of GDP was tiny. And that’s true at both the state and federal level. Prior to the mid 1960’s government spending was very large indeed, but it was primarily concentrated in local government. This was, obviously, entirely true prior to 1916. That is, wait for it… small, local governments spent their money on small local needs. The government existed to support “we the people,” but more importantly the decisions on how to spend communal investment was made by, wait for it… THE COMMUNITY! What a concept. It’s almost democratic in practice, something that today feels foreign.
And then, in 1970, almost overnight, FEDERAL spending, that is centralized spending not in any way intended connected to actual citizens, jumped up to 34% of total GDP and stayed there.3 Once government spending took over as the single largest “demand agent” (remember, governments don’t spend – they tell you what you MUST spend your money on – that’s how taxes work) in America, it stayed there, and supply had no choice but to follow. And “all of a sudden,” government no longer existed to support we the people:
When you look at this chart, who does the government now support? My single favorite argument that I hear for why capitalism is “wrong” (at some moral level I guess) is rooted in the above chart. The problem with that? The above chart does not, in anyway, represent capitalism. We do not operate in a free market. And the more unfree it becomes the more wealth concentration occurs. This chart perfectly represents what has happened in every civilization the world over once a Statist economy slides too far left on the continuum from free market capitalism to over regulated State-driven economies. Government regulates every facet of the economy and that means the State, and not the people, chose the winners and the losers. And the State always choses itself.
Here's an even better chart:
This is the actual median income of each quintile in 1965, not adjusted for inflation. While inflation adjustments are nice, in this instance they horribly misrepresent the reality of the situation in 1965 because they use compounded interest (they act like your pay was money in a bank account compounding at the rate of inflation – but that’s now how it works at all) to show a much larger gap than actually existed. A much better way to look at this is representative buying power. If someone had 15% more income in 1965 they had 15% more buying power. Compound that 15% difference at 4% a year for the next 60 years (what they do when they “adjust for inflation”) and the buying power difference looks huge, it looks like almost 4x as much buying power (that’s 400% instead of 15%) when the reality is they had a 15% difference in buying power, as better represented above. This was, primarily, a free market economy leveraging the sort of anti-competitive restrictions that protect free-markets from mob rule.
Here’s perhaps my favorite chart:
There are so many arguments about “intentions.” Everyone believes that covid lockdowns were done with the best of intentions. They weren’t, but they were followed by people who did mostly have the best of intentions. The growth of government following WWII, I believe, was, for the most part, done with the best of intentions. The EXPLOSION of government in the 90’s, less so, but people followed it with the best of intentions. Today? Today, no one has the best of intentions.
When you look at the above chart what should immediately jump out is that the very bottom quartile made the largest improvement the fastest when federal income taxes officially became the massive societal burden they are today. On a cumulative growth basis, the bottom quartile jumped up quickly, outpacing all others all the way through the 70’s. And everyone else just sort of grew together. That, most would argue, is the ideal position of government. Yes, inflation was exploding, so no one was really improving, but it still stands to reason that the bottom outperforming the top is good for the overall health of a shared marketplace.
The regulations we added didn’t restrict the continued growth of the free market, they simply helped transfer some of the net societal gains (everyone is going up) to those most in need. That’s a beautiful thing. Everyone wins when the bottom grows. That’s primarily how a free market goes – everyone grows together with high class mobility as new competitors emerge and old stodgy company’s fade away in the face of stiff competition. A free market will always have winners and losers – some people are simply better at using resources than others and they’re rewarded in-kind.4 but ideally some government intervention will ensure that at least some of those gains are given to those in the most need, and restrict the outright thieving of supply or demand. The government was maybe, sorta, kinda, working. Not as well as the free market had been, with the US having the greatest class mobility in the world for almost all of the 20th century, but at least it wasn’t yet completely broken.
We need to introduce another variable before we go further – the often discussed and much maligned federal reserve. Here is the federal reserve lending rate from 1954 forward:
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart
I’ll spend more time on regulation than I will on the lending rate, because regulation is what eliminates competition and drives consolidation, but the lending rate is a very important variable – specifically as relates to modern monetary theory and the Fed’s newfound refusal to scale lending rates appropriately given competing economic variables. Lending rates play a HUGE role in capital consolidation and so should not be ignored, but they play an outsized role partially because of the amount of regulation in the marketplace. We’ll return to this graph soon, but keep something in mind – as inflation was skyrocketing, so were lending rates (this should be true) and wage growth was highest for the poorest in the country. The lack of free money meant people had to actually create value to capture value, and it also meant people were incentivized to save rather than spend. This is, in most cases, a very good thing. It cools an economy, certainly, but as long as the rate management is reasonable people can store away money rather than spend (thus cooling inflation as demand decreases) AND see a very strong return on that money, which improves future prospects. This will be extremely relevant as we look at the last 20 years of fiscal mismanagement in this country.
Quick break to get something out of the way
I hate playing the party game - since the 1960’s it’s been us (we the people) against them (the ruling class) but people sadly still care about, and even worse, believe in, political parties, so let’s make sure everyone is clear that all parties are guilty.
Nixon (R) was president from 69-74. That is exactly the window of the fastest growth for the poorest people in the country. Read, and read, and read about what they did to Nixon and how, and then go look at the huge jump the poorest among us made during the Trump administration and then go read about what they’re trying to do to Trump, and how, and see if you can find a correlation (https://www.washingtonexaminer.com/news/cia-has-known-trump-russia-collusion-data-not-technically-plausible-since-2017-durham-says - start here, but there’s a million of these). You could make a pretty reasonable argument that there are some powers that be that REALLY don’t want to see the servant class escape their cast, and every time there’s even a hint it may be happening there’s nothing they won’t stop at to ensure it doesn’t continue. That this coincided with the integration of schools and the assassination of JFK is also not a coincidence. There were people meant to be at the bottom, and the people working to ensure they stayed there were willing to go to any length to keep that true.
Gerald Ford (R) (74-77) and Jimmy Carter (D) (77-81) did nothing but make the country worse for everyone, so congrats to them – their curves look exactly like Biden’s is about too, so let’s all celebrate the beginning of another “roaring 70’s” coming our way.
From 72 – 82 the stock market lost more than half its value, interest rates skyrocketed as inflation went crazy and everyone paid the price. The wealthiest managed, of course, as they always do, while the poorest bared the blunt of it, seeing wage increases, but wage increases that barely kept pace with inflation. As always, there was some crisis or some hysteria going on that meant we all had to “sacrifice for the greater good” (always bullshit), and we, rightly, remember Ford and Carter as two of the worst presidents in US history.
And then along came Ronald Reagan (R), and the market, our economy, and the power of the people, were never the same again. For clarity’s sake, we’ve had Republicans and Dems in here and we’re about to have Republicans and Dems in here again:
https://www.macrotrends.net/2324/sp-500-historical-chart-data
From the bottom of the market in 1982 through 2000 the S&P 500 went from $311 to $2,350 with almost completely uninterrupted growth. Many will argue this was a great thing. And in some ways, it certainly was. “Quality of life,” as measured by the amount of shit we can buy, accelerated like a rocket, and modern monetary theory, as outlined by super low interest rates, even in the face of recessionary pressure, was born. But something very interesting happened. Let’s bring back the inflation adjusted chart:
Notice anything weird? During the greatest economic boom in US history, outpacing even the industrial revolution, the bottom half of the country did almost no better at all. Their wages simply moved as inflation moved. But the top of the country? They did spectacularly well. The 4th quartile, the “upper middle class” as it was known to us growing up during that era, adjusted for inflation, increased earnings from ~75k a year up to over ~100k / year. That’s a 33% increase in inflation adjusted buying power in those 20 years. That’s some fantastic gains. But my goodness go look at the top of that chart. The top 5% (and I purposefully left off the top 1% because this chart would be unreadable for everyone other than the top 1%) went from ~200k/yr to almost 400k/yr during the same 20 year period, an almost 100% change in inflation adjusted dollars. Their buying power increased by 100% in 20 years. And again, if I added the top 1% you’d see more than a 1000% increase over that period.
And then something interesting happened. George W (R), the “President of the Rich” got into office and all of a sudden, the rich stopped getting richer. 9/11 happened and the economy dropped overnight, but that doesn’t really represent the period that well at all. By the time the financial crisis of 2008 occurred the S&P 500 hadn’t returned to its 2000 level. It had recovered, but VERY reasonably. In 2000, at the peak, the S&P 500 was, again, ~$2,350. It dropped, post 9/11, to a low of $1,277, a pretty huge drop. By 2007 it reached a peak of ~$2,100, with a huge portion of that being the immediate bounce back in late ’01 and early ’02. Then we saw slow steady growth. The kind of growth that doesn’t help the rich at all.
Somehow the “President of the rich” did something exactly the opposite of help the rich. The Fed also raised interest rates almost immediately following the bounce in 2002. They didn’t raise them enough, but inflation was completely under control, we had slow steady growth, and so any raise signaled a cooling to the market and slow steady growth was the outcome. Now, GW wasn’t a good president (we haven’t had one in my lifetime, though Trump was close, as we’ll see), he led us to pointless wars, didn’t improve the lives of really any level of the country, and “no child left behind” has done more to ruin education in this country than anything done before or after (more on this in a future part of “the failure of big everything” on the failures of big education), but this idea that Republicans are the party of the rich simply doesn’t hold up.
Obama? Obama, on the other hand, LOVES the rich. From ’09 to 2017 the S&P 500 went from a low of ~$1,000 to a high of almost ~$3,000. Here’s that inflation adjusted chart again:
My goodness look at that top line skyrocket. The “working man’s” Democratic party (what a joke) came to power and the bottom of the country changed not at all, the top half did pretty well as a whole, and the top 5% blew the top off the market in a way we had literally never seen before. Here’s that cumulative chart again:
Look at that black line just runaway from everyone. It’s like it’s trying to hide. On the flip side, Obama came into office and the bottom half of the country ALL did worse. Every single one. By 2017 when Trump took office the bottom half of the country is on the upswing, but it hadn’t even recovered to the levels it was at in 2007 when he entered office. The top 5% barely suffered at all and had recovered all of their losses, and then some, by early 2011 – all told, during the Obama administration cumulative wage growth for the top 5% went from ~85% to 120%. It took the bottom half of the country all the way to 2017 to recover – cumulatively they went from ~21% to about 20% during Obama’s reign, meaning they actually LOST 1% on their median wages across the 8 years Obama was in office.
Barack Obama LOVES modern monetary theory. Here’s the Fed rate chart again:
When the 2008 financial crisis happened, the Fed decided to test this amazing theory they’d been working on for how to REALLY consolidate governmental control over everything. They dropped the interest rate to zero, with serious talk about taking it negative.
As you can see above, one time, during the 1950’s, when the country was recovering from the greatest war in global history and was literally in the process of rebuilding itself and refactoring all means of production away from war and back toward producing consumer goods, had we tried interest rates that low, and even then, it only lasted a couple of months. The minute the economy had stabilized even a tiny bit, interest rates were pushed back up.
The difference this time? They literally kept them at 0. As discussed above Obama LOVES the rich, and my goodness do they love him. With interest rates at 0, and STAYING THERE, any person who had any assets could borrow against those assets for free and spend that borrowed money tax free, thus further increasing their spending ability. Previously, even wealthy people had to sell assets to purchase new assets or invest in new means of production, capital, etc… Now? Now you could keep all your assets, borrow against them FOR FREE, and reinvest that capital anywhere you wanted. This literally can’t be overstated. The S&P500 MORE THAN DOUBLED and people were paying zero percent interest on money they had borrowed, then investing it in the S&P500 and collecting more than 200% returns for the cost of literally nothing. THAT, my friends, is how you consolidate wealth. You borrow against existing assets, for free, then invest that money, take all the returns, and pay nothing for the returns. You built wealth WITH ZERO RISK AND ZERO REAL CAPITAL INVESTMENT.
And then something REALLY interesting happened – Trump, the WORST HUMAN IN HISTORY, took office and the bottom half of the country took off, with the pace of their real-wage increases actually exceeding the pace of growth of the top 5%. From 2016 through 2019 the bottom half of the country saw real inflation adjusted wage increases for the first time since the ‘70’s, cumulatively going from ~20% to north of 35% in real wage growth. They gained almost as much in those two years as they had gained TOTAL in the previous 50 years.
The powers that be saw what was happening, went all Nixon on Trump, and the rest is history. I can’t say it was our last best vestige of hope, because I always believe there is more hope on the horizon, but my goodness they shut him down quick. And he made it easy on them. He also did a LOT of things wrong. Not breaking up the tech monopolies was a terrible decision. The “vaccine” was a terrible decision. He was played by the swamp, and they beat him (in the battle, the war, we’ll see), but the numbers are what the numbers are.
You know what the last 50 years of our economy looks like? The slave economy of the South in the 1800’s. Wealth gaps like you see above ONLY occur in situations where people take dominion over people. In the 1800’s they did it physically, and from WWII forward, they did it with regulation, taxes, a “crime bill,” a printing press, cocaine and heroin – and now opioids and fentanyl, and a federal reserve lending rate of ~0%.
Every single major sector of the US economy now operates in almost exactly the same fashion. Huge companies on one side, even larger regulatory bodies on the other side, insane financial incentives for collusion in the middle, and massive money laundering schemes all around them that ensure the money is funneled from the people to the oligarchs through crisis after never ending crisis.
The answer? Political parties aren’t the answer, they’re part of the problem, but politicians can be. Perhaps the last great day of this nation occurred in 1984. That was the year the Bell’s were broken up. It was the last great vestige of the era that predated the big everything era. The breakup of the Bells was one last attempt to reign in the era of big business and big government, inextricably tied at the hip. It is no surprise the 1970’s explosion in tax revenue coincided perfectly with the massive and rapid re-expansion of our military (because RUSSIA SCARY!!!) and the enormous rise in the economy of lobbying. It saw previously broken up conglomerates, like Standard Oil, recombine to reform the monopolies of the past. Suddenly, the small government that had historically regulated an unprecedented economy of small business decided it was more fun to be a HUGE government regulating a much smaller number of HUGE businesses:
https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.htm
Once again, compare the Bush era to the Obama era? Which one was the president of big business again?
Why break up businesses when you can simply be bigger than them? And thus, the era of Big Everything was born. This chart stops in 2015, and the trend has been interesting since. Like every other chart we’ve seen, Trump threw a wrench in the trend. From ’16-’19, during the Trump deregulation era, the number of new startups and small businesses actually briefly increased, before being COMPLETLEY destroyed by the lockdowns and corresponding fiscal policy implemented as Joe Biden was ushered into office on the promise of restoring Obama era Rich Man Dominance!!!
Today corporations and States are almost indistinguishable from each other. This is a great resource on exactly how bad it’s gotten: https://www.corpwatch.org/article/top-200-rise-corporate-global-power
Our system created these monsters, not the other way around. 50 years ago, or 250 years ago at our founding, these organizations would have been broken up through anti-monopolistic regulation, their power cut down before it came to dominate international politics. Today? Today the government blames them, while crafting every single regulation and anti-competitive measure in their favor. It’s a beautiful racket – like BLM pretending to care about black people while screaming to defund the police. BLM made hundreds of millions of dollars, and showered themselves with mansions, while the black murder rate increased by 43% in 2020 compared against the 10 year average.5 It’s amazing how naïve we all are to actual cause and effect.
There’s just one issue with our current bureaucratic class, once something gets that big, it’s impossible to serve the needs of individual people. Too big to fail? Maybe. But definitely too big to succeed.
At the very beginning of the covid hysteria I wrote an article comparing covid-19 to the financial crisis. The reasons for the comparison were simple – they were both perfectly illustrative of what happens when dumb people with too much money and too much power are more interested in protecting their own ass from the mistakes they’ve made than they are with actually correcting, or at least not worsening, problems that will primarily impact people they could give two shits about – AKA not them. If the Fed had admitted in 2007 that NINJA loans were a TERRIBLE idea, that CDO’s full of NINJA loans were an even worse idea, and that giving triple AAA ratings to CDO’s full of NINJA loans was the worst idea, they could have seriously mitigated the impact of the financial crisis. Not only did they not do that, they allowed, and even outright encouraged, the big banks to bet on the crisis itself, who then begged the government (who was supposed to be regulating them) for trillions of dollars in stimulus money, and then reaped the rewards of the bet they made on the crisis without paying back a single dollar of the stimulus money to the tax payers. And here’s the thing. If you’re the banks, why should you care?
Everyone made the banks out to be the bad guys after the financial crisis, but why? They did exactly what they were incentivized to do. Their job is to make money, the people whose job it is to regulate them didn’t care about regulation and only wanted to share in the money they made, and the US government literally paid them for their mistakes and then paid them again after their mistakes. What the hell would you do in that situation? The bank is operating in a controlled market, and they played the game the way the rules were defined. I beg everyone to please read “The Big Short” by Michael Lewis. As much as he’s gone off the deep end (he, non-shockingly because it’s a requirement of being an east coast elitist, also learned all the wrong lessons from government regulation gone wrong), it's a phenomenal book that paints a beautiful picture of the corruption in the market. Then watch “Dope Sick,” or read anything on the Sackler family, and you’ll see that Big Pharma works EXACTLY the same way.
As the situation perfectly illustrates, it turns out all living things respond to incentives. If you tell banks they’ll be rewarded for their riskiest gambles, and, if they go bust, they’ll be rewarded for both betting against them AND be bought out of those mistakes by the taxpayers, what do you think they’re going to do the next time? And all they have to do is throw some money at the career politicians us idiot voters keep voting into office for 40 years? Feels like a game they’d be dumb NOT to play.
Without the regulatory bodies in the first place none of this would have been possible. That is the story of Statist economies. The regulators, and lazy people, force these outcomes with incentives that lead, every time, to exactly these outcomes. Regulation forced banks to give NINJA loans (Clinton said everyone deserved a house – his “let them eat cake” moment), the regulators colluded on giving AAA ratings to CDO’s that never should have deserved them, and the banks simply played the game within the insanely broken rules that were given to them and, as always, the people paid the price.
Now yes, people shouldn’t have bought homes they couldn’t afford, but they were literally told too, and directly incentivized for doing so (because the banks needed more loans to create more CDO’s so they pushed and pushed on people to keep buying more homes and keep taking more loans on the value of those homes) so they too were just responding to REALLY broken incentives. Everyone is to blame, but the blame HAS to start with the people who are literally creating the rules of the game and then choosing to enforce them when and how they most benefit themselves.
The biggest issue with government today? People trust it. Which is ridiculous, but they do. They figure if a “regulatory” body tells them something is “safe and effective” it must be. But today’s regulatory agencies don’t help – in the best case they tell us what a journalist with decent math and deductive reasoning skills could have figured out on their own, and in most every case they tell us giant falsehoods intended to simplify their life and make their “donors” more money. And in both cases, we listen, because we’re too lazy to do our own research (something the left now openly mocks, which is absolutely hilarious in its irony) - myself definitely included - and we plow forward on the basis of terrible information provided by people who literally don’t care and just want to keep collecting a pay check, and secure that next job at Pfizer as “speaker” traveling the world, on Pfizer money, to talk about how great Pfizer is. Or the Sackler family. Please, please watch Dope Sick or read “Empire of Pain.”
Our tax dollars literally go to paying regulatory agencies to lie on behalf of their real clients (the companies they supposedly regulate) and we pay the price. Don’t EVER blame the company because of corrupt political systems. That’s like blaming NBA players for “traveling.” If the refs don’t call it traveling it isn’t traveling. The rules of the game are irrelevant – rules that aren’t enforced aren’t actual rules – the players simply play within the ACTUAL rules of the games. The rules are broken, not the players.
At the end of the day the government is a singular monopoly – they have no competition and NO recourse for their action. For that reason alone, they are, and will always be, the problem. No matter how bad the banks may be, you can still choose to use a local bank. You have NO CHOICE in how banking regulations are made to pad the pockets of bureaucrats. That system MUST be dismantled.
And with every passing day the similarities between the failures of COVID-19 and the failures of the financial crisis become more evident; they are both man-made fallacy upon man made fallacy worsening a crisis that never should have existed in the first place.
The “vaccines” are the synthetic CDO’s. That’s where the REAL money is made and that’s where the real fraud is occurring. True liberals (not lefties, they LOVVVEEEEE Big Pharma just like they love Raytheon), meaning people who believe in individual liberty, HATE Pfizer, but that hate is also misplaced.
Pfizer was asked to create a drug that would create antibodies to a specific spike protein, and they did exactly that. And not only were they asked to do it they were guaranteed, literally, in contracts, regardless of outcome, billions and billions of dollars to do it, and told exactly how much time they had to accomplish the goal. What the hell would you have done? You’d have done EXACTLY what they did. You’d have created a “vaccine” that causes the body to generate antibodies to the spike protein (and it does do that - that’s irrelevant to stopping the spread of coronaviruses– but it does do what it was created to do, it does create antibodies to a spike protein) - and that it wears off almost immediately, doesn’t stop viral replication in any way, doesn’t limit your ability to catch or spread the virus itself, and is a massive net societal negative given all the side-effects – all of that is irrelevant. Pfizer wasn’t paid to cure covid. They were paid to create a “vaccine” that would cause the body to create antibodies to a spike protein. And they did exactly that. That the FDA/CDC/NIH/propaganda arm of the State (corporate media/big tech) lied to you and said it was going to “cure covid” has absolutely nothing to do with Pfizer. So why do you hate Pfizer?
That our FDA reviewed the trial data which showed, unequivocally, that it made health outcomes worse (https://butthedatasays.substack.com/p/why-the-public-always-loses-in-public?s=w), and not only approved it, but did everything humanly possible to force it on every US citizen, isn’t Pfizer’s fault. It also isn’t Pfizer’s fault that Pfizer pays for the FDA to exist – they are forced too, through, wait for, more regulation. It isn’t Pfizer’s fault that despite an almost unimaginably large tax base, and a national debt that makes the tax base look infinitesimal, the FDA still requires private money from Pfizer to “function” (it doesn’t actually function, but we keep throwing billions of dollars at it anyway…). None of this is Pfizer’s fault. Again, look at their incentives. They did exactly what they were asked to do. That EVERY SINGLE PERSON in the US government failed to do what they were tasked with doing (protecting the US people – which shouldn’t be their fucking job in the first place) isn’t Pfizer’s fault.
In a free market we would have had no FDA at all, and the CDC, if it existed as an extension of the US Military as it was originally founded, would have said some stuff and made some recommendation about hand washing, and we’d have all gone on with our lives. Do you think we would have been better off? Pfizer would have produced data on its product, we would have reviewed it, people who thought they needed it may have taken it, a free and active press would have written stories about the impact of that shot (and remember, without MASSIVE government money and intervention, it’s very likely we would still have a free and independent press), Doctors would have freely shared the massive spike in heart issues they were seeing, especially in young people, demand for that shot would have been pretty small once side effect reports from people at zero risk from covid in the first place started coming in and the free market would have functioned as the free market should have functioned. It’s an amazing concept to dream about, isn’t it? Instead, today, we get what we got, and we deserve it, because we asked for it. Without the CDC we never would have had a crisis in the first place – remember, Sweden, who did nothing outside of two weeks in March, saw DECLINING all-cause mortality:
Covid wasn’t a health crisis, it was a public health-created crisis of hysteria. So, we’re all less healthy, for literally no reason, and we had to pay for being less healthy out of our own pockets. My goodness this huge government thing is working great.
We should all thank God every day that excess mortality, especially in people under 45 who saw zero excess mortality from COVID in the first place, is FINALLY coming down now, that we’ve stopped these ridiculous forced vaccination campaigns. But I shouldn’t have to thank God for that, because it never should have happened in the first place:
The argument for the existence of regulatory bodies is something like Bernie Madoff or the financial crisis. Of course, that’s absolutely ridiculous, because both of those things occurred BECAUSE OF REGULATION. Yes, without question, there were massive financial scams that happened pre-regulation. The Dot Frank regulation made “financial services” the third largest industry in our entire economy to try to ensure another Enron never happened – and now when Twitter does exactly what Enron does and defrauds its investors out of billions of dollars, its praised writ large by every State media organization we have. All Dot Frank actually did was make companies better at hiding their money and change the way investor’s view value by making it more about “market opportunity” and less about profitability, so companies no longer have to fake profitability – and can borrow, again, at ZERO percent interest rate – against the value of their stock in a company that literally makes no money. It’s all a game, and companies are WAY better at playing it (their incentives are WAY higher) than regulators are (they don’t ultimate care at all).
And yet, every time a regulatory agency fails, rather than do what we would do if a non-competitive company failed – let it die with dignity – we decide, instead, the solution is to give it MORE money. When it comes to government US citizens are the definition of insane. They keep failing us, we keep giving them more and more power. At some point the system will break, but by then it will likely be too late.
Every time we increase funding to these agencies, and thus increase their size, we further guarantee the number of companies they regulate will decrease, as competition is further eroded by regulation, thus making it easier than ever for those companies to have even more control over the regulatory bodies, and an even easier time manipulating the market. Big companies LOVE regulation – they get to write the rules and insure no one else can compete. You can pretend that isn’t true but go look at the data and then tell me otherwise. We’ve seen market consolidation since 1980 like never before, all because regulation makes it very, VERY easy to be a HUGE company that does literally whatever it wants.
Big companies basically write the rules - they own the regulatory bodies and the politicians – to make it impossible for small companies with better ideas, better operating principles, or simply less inefficiencies, to compete, and they can do all this because the politicians fixed the game in their favor in the first place. And all it cost the companies was a few million bucks to a few corrupt politicians that we keep voting for because we’re morons – or because it’s “helping climate change” or something so erroneous politicians can scream about it forever, never do anything about it (it’s a problem government can’t solve anyway) and continue to sit back and cash checks.
Blaming the companies is such a lazy cop out. ALL things respond to incentives. All of them. And a company’s primary incentive is to maximize the value of its assets. That is, create the most wealth with the least work. Just as ALL living things look to maximize the efficiency of their use of assets. Companies exist to create shareholder value – when the system is rigged to make it as easy as possible on them, they’re going to do this crazy thing… they’re going to TAKE IT. You want to fix the problem? STOP RIGGING THE SYSTEM TO MAKE IT SO EASY ON THEM.
Let’s use a market particularly relevant to this conversation – that of medicine – to go a bit deeper.
US regulation of medicine, and the entire exercise of medical sciences, doesn’t start with guaranteed purchase contracts for a not yet in existence Pfizer “vaccine,” that guaranteed that only Pfizer would get guaranteed US tax money to create a product with zero net societal benefit - it starts WAY before that. The Statist marketplace begins with restricting what problems medical professionals are even allowed to approach as problems in the first place.
Tax dollars run the entire infrastructure of medical science, from the simplest lab research projects to the most complex pharmaceutical trials. Because of how regulated “science” is in the US, it is impossible to run a profitable lab without massive investment from the US government. The costs of running a study to get a drug approved are SO insurmountable (on purpose) that scientists are now completely dependent on government grants to even begin research. So, the government monopoly over medical science extends all the way to defining what problems are actually problems in the first place.
Today, while you may decide it’s in your best interest to lose weight, as long as the pharma companies want to keep you fat (who do you think is paying for all those “body positivity” ad placements in all your fashion magazines?) you’re going to stay fat. Because they’ll leverage their government protection, and government grant money, to ensure you stay fat. Then, miraculously, they’ll also just happen to have a miracle drug that won’t make you less fat, but it will “regulate your fat modules,” or some such nonsense, so the gravy train keeps pumping along and now you can be fat AND happy (just like you can now have a variant of a coronavirus created in a lab AND a “vaccine” that doesn’t have any impact whatsoever on whether you get a cold or not, but does ensure they keep printing money indefinitely).
My gosh these pharma companies are great. And the government loves it, because now it gets to look like the hero because it made being fat and happy possible. So, they’ll craft all the laws and all the regulation to ensure you stay fat (but not shamed for it) and pharma can sell you more and more medicine – and the State can use the crisis of “fat” to take away more and more of your freedoms. It is a beautiful cycle of depravity, and you’re the hamster on the wheel coughing out cash on both ends into the willing arms of “regulators” (they’re just the guys sweeping for the stones in curling to make sure things progress exactly as they desire) and monopolies that plan to keep you on that wheel forever.
The State controls every single aspect of this marketplace. Our pharma industry is literally a lord system. It isn’t even CLOSE to a capitalist endeavor. You have absolutely no influence whatsoever on the price curve. The government gets to determine the demand and the supply, and you just get to live in it. Hope you’re enjoying it. The good news is its working… oh wait, life expectancy has been on the decline in the US since 2015, and we spend more than 2x any other country in the world on medical care? And we’re the most medicated country in the world by such a wide margin it’s hard to even structure a comparative report? We take more “vaccines” by the age of 12 than the average Japanese person takes TOTAL prescriptions in their entire life? Well, I mean, sure, but have you SEEN these miracle drugs we’re cranking out!? And after all, it isn’t their fault we’re fat.
As always, I suggest you don’t take my word for anything. Do your own research. Pick any industry you’d like. Banking, financial services, agriculture, energy, the internet (section 230 – read it sometime – it essentially gives the state control of social media – which was always the goal), you name it. Pick something you’re passionate about and really dig in. At 35% of GDP (wait, what, it’s north of 40% now!?!?!) there isn’t an industry not entirely dominated by government “spending” (that is, someone else choosing how to spend YOUR money) and government regulation. You find me a free market and I’ll love you forever, because I’ll be putting all my money behind it and enjoying early retirement.
The biggest hoax in the history of the US is blaming the rich for not paying their fair share of taxes. You know why it’s the biggest hoax in the history of the US? Because NO ONE should be paying federal taxes in the first place… and just like critical race theory and queer theory and modern monetary theory and every other giant sack of shit you’re forced to pretend to care about every day, it’s all just intended to be one big distraction. Obama was the king of blaming the rich for not paying their fair share, and under Obama they paid less taxes than ever and increased their wealth more than at any other period in human history. The blame game is always a joke, and it’s always intended to keep you distracted from how structurally broken our system is, so that you don’t start demanding ACTUAL change, and instead just keep blaming white people, or “rich” people, or poor people, or who gives a shit, just make sure it never comes to a re-focus on personal responsibility and the structural integrity in the system that enables personal accountability and personal accomplishment.
The State cares about one thing and one thing only – the State. As long as it keeps growing, everything else is irrelevant – but wonderfully capable of keeping you distracted. I hope you’re enjoying our Oligarchy Statist society as much as they are. Oh, and just as a reminder:
https://www.heritage.org/taxes/commentary/1-chart-how-much-the-rich-pay-taxes
The top .1% don’t pay anywhere near their fair share, because their wealth is almost entirely debt based, but again, that’s a problem of the structures of the system, and doesn’t require more taxes it requires LESS taxes so there is less debt for them to borrow against in the first place.
Long term there is only one solution to this – the massive descaling of the federal government. My simple proposal (more on how we the people can help accelerate this in a future piece) would be a 5% reduction in government spending each year, and a 10% reduction in tax revenue each year (we waste at least 50% of the tax revenue collected by the government – so the math works. This 10% reduction in tax collection is money that stays in the market, and the economic impact on things like wage growth would be HUGE). The goal is to drive a massive descaling of regulation that will allow for competition and the return of class mobility – the literal key to restoring the American Dream.
We are now SO regulated that even the tiny amount of deregulation imparted by the Trump administration led to significant increases in competition and real wage growth for the bottom half of the country for the first time in 40 years. I know how much people hate Trump because of that mean thing he tweeted, but ignore Trump the person for a minute and think about the economic realities of decreasing regulation. I don’t care who you vote for – what I care is that people start voting FOR deregulation of the market. If there’s a Dem out there (Tulsi Gabbard, anyone!?) that will actually support deregulation, then I’m all for it. Increased regulation ALWAYS means increased wealth concentration – and increasing wealth concentration means decreasing quality of life for all but the 1%, and the complete erosion of the American Dream. I suppose if that’s what you want – if you’re good with the faux Americanized version of what Amsterdam is supposed to look like if you don’t actually visit (from someone who runs a team in Amsterdam) and happy with an American cast system, zero class mobility, and an economy a generation away from exactly mirroring Russian, than keep voting for the “nice, old guy,” but please forgive me for not being willing to accept that.6
Short term, we are in dire need of a recession. I realize that will hit us all, as all recessions do, but the benefit, the survival of millions of poor people in this country and abroad, is worth it. COVID-19 was hysteria, which is why you heard so much about it. A real food crisis, and cost of living crisis in a country with HUGE economic disparities, is an actual crisis, which is exactly why you aren’t hearing more about it.
And Easter week feels like the perfect time to post this. The difference between the State and religion is that the State takes from you for their own benefit, and religion is about giving of yourself willingly to those in need. Not being told you have too, not being forced by some bureaucracy to contribute to their inefficiency, but to find a food bank and donate, and maybe even volunteer, to those actually in need.
And a recession is ours to control. All it takes is a little less spending and a little more donating. So, I’ll put it out there – if you agree with any of this, consider voting for our long-term future (ignore parties, vote for candidates, and most importantly, vote against entrenched candidates – anything more than two terms and you are, by definition, a part of the problem), but much more importantly, donating, or serving, for the short-term future of ourselves and our neighbors. Because to most people reading this inflation is an annoyance, but to the poorest people in this country, the pace of inflation may well determine whether they have food on the table tomorrow.
https://www.nbclosangeles.com/investigations/las-homeless-housing-now-costs-more-than-some-luxury-condos/2425373/
I’m a firm believer that all regulation, from governmental to parental, needs to follow a simple structure. Very few rules, directly in line with the level of responsibility and capability of the individual(s) being regulated, that are VERY strictly enforced. Uneven application of the law creates chaos, discontents, and distrust (just ask the people still in jail for non-violent crimes from a riot on January 6th), and too many laws restricts freedom to a degree that makes society less happy and, perhaps more importantly, less productive. Minimal laws (small government) is actually LESS important than consistency of application. Everyone talks about how basically everything is now the “death of democracy,” – including the LA times literally calling FREE SPEECH the death of democracy (https://www.latimes.com/entertainment-arts/story/2022-04-15/elon-musk-twitter-governance) but truly, the death of democracy is the inconsistent application of the law. Technically a true “democracy” should be able to make as many laws as it wants, that’s not the democracy I’d want to live in (back to us relocating), but it would still be a Democracy if those laws were justly ratified and approved by a plurality of the constituency being impacted. But, if those laws are unevenly applied, then they aren’t laws, they’re weapons of power, and the democratic creation of laws is completely irrelevant to the actual application of society. Once that occurs, you do not have democracy, you have the illusion of democracy and practical reality of a Lordship. This is today’s US, as we’ll cover in the next piece on the complete and utter destruction of the Bill of Rights – at least for certain individuals.
I could also spend 10,000 words explaining why GDP, and specifically government spending as a portion of GDP, are complete and utter bullshit – primarily because the government can literally make government spending whatever portion of GDP they desire based on how they categorize their own spending, but if you’re interested in learning more about GDP we can have that discussion another time.
This is my favorite argument against the “equity” agenda (what nonsense). The only way to truly create equity is to kill everyone. And that’s not an exaggeration. From the minute Lebron James is born his body is better at leveraging inputs than mine. Period. He creates more muscle and more bone density and converts oxygen into the blood faster than I do. There is no way to stop this short of literally debilitating his body. You could give me all the HGH in the world and I’m not turning into LBJ. It's just not happening. So, restricting his access to oxygen and his access to food and limiting the time he is allowed to move his body are the only way to create “equity” between the two of us. But the end game is death. Because I’m not a terrible athlete – but find the person who is worst at leveraging inputs and put LBJ next to them and ultimately the only way to get them even close to each other is to starve one to the point of death. That’s the only way to create equity. You can give all the people in the world all the opportunity in the world and some will do more with it than others. That’s life and it’s great, because what they do with that opportunity (Eddison and his lightbulb again) make life better for all of us. Restrict that ability and all you do is make life worse for all of us. People read the above and they laugh at the ridiculousness of it, but it’s exactly the antithesis of what Hitler was trying to do so there is precedent and it’s a HORRIBLE, HORRIBLE precedent. Equity is a very, VERY dangerous game, and just because you don’t realize it because cognitive dissonance is more fun than reality doesn’t make it any less so.
“Between 2010 and 2019, there was an average of 5,954 White murders, which is roughly 16% lower than the 10-year average of Black murders. During that same time period, an average of 6,927 Black Americans were murdered each year, meaning Black murders shot up by 43% in 2020 compared to the previous 10-year average” - https://www.foxnews.com/us/black-americans-paid-enormous-price-for-defund-the-police-movement
The natural counterargument to my point is the holy heavens that are the Nordic countries. We hold them up as beacons of economic glory, with perfect society’s and unrivaled quality of life and government. They also have HUGE tax bases and, in many cases, their governments make up more than 50% of GDP. Leaving aside ALL the massive societal differences, there’s also history to consider. This video breaks it down beautifully. With the smallest income inequality in the world, the Netherlands also has, and because of the income equality will ALWAYS HAVE, the largest wealth gap in the developed world. The rich will always be the rich, because economic mobility does not exist. In a world where everyone is equal, you are what you’re born as, nothing more, nothing less, and your output means essentially nothing. If you’re in the 1%, there’s no better way to protect your position than ensuring no one else can ever threaten it. That’s the real beauty of socialism. The 1% control everything, including the people. It’s indentured servitude with more iphones.
Via Berenson's stack - here I am. Enjoyed your article, wandered a bit but solid. Watched the drama of 2008 as Obama had to deal with the real estate bubble collapse and the boomer wave, FDR's time bomb, arrived. We saw ~ $15+T simply vanish and IMHO we are still dealing with the overhang of that collapse. Obama did the typical and tried to save the speculators along with the usual spending to please the voters. But it started the deficit explosion.
Looking at revenues, the US gets ~ 20% of GDP and spends ~ 22% of GDP, until 2008. So a nominal 2% inflation, devaluation, was tolerable and had a manageable debt load. The revenue seems to remain around that 20% regardless of tax rates. At that rate the economy has some excess which promotes growth and tolerable rates of failure to get that growth. Most of the EU at higher tax levels can't get the growth but can offer more citizen benefits - depending on the US to do the innovation. While we talk about wanting to get back to 2% again, perhaps 5% might be tolerable to help amortize the deficit. As that holds, the voters will get even angrier.
We are now stuck with immovable ~ 60% of budget in transfer payments. The military as a % of GDP has stayed low despite various threats by those who might want to control our US advantages by force. Of course, we may forfeit control without force if it benefits those in charge - another story. But with that 60% stuck and interest rising to allow a ROI of 2% over inflation, the budget is rapidly becoming unstable. We could not survive a 1979 interest rate. With that 60% budget, we simply can't afford the real infrastructure needs; we can't even maintain what the past has delivered.
Anyway out of this pickle, soon? The boomers will decline over the next 10 years lowering fixed outlays but the future demographics look bleak.
I sympathize with your wife. Her frustration is something I can relate to. I believe I am in a similar place as you are, and my wife is also sick of me. I have started writing a blog, exactly for the same reasons as you. So, please continue writing.
You mention you wrote things in May 2020, but they are not on your substack. Are they published?