August 6th was one of darkest days in the history of the Internet. When I learned that Facebook, YouTube, Apple, Spotify, Pinterest and others had colluded to take down content from Alex Jones all on the same day, I knew exactly what was happening. They timed their attack so that it would hit the press at the beginning of the weekly news cycle on Monday so that their purge would have maximum societal impact. And the fact that there was such overt collusion was obviously meant to send a message. We were supposed to understand that if they can do this to Alex Jones, they can do it to any of us, and so we better shut up and fall in line. I can’t even begin to tell you how sick I feel right now. The big tech giants have made it abundantly clear how they feel about all of us, and there is no future for alternative points of view on any of their platforms.
The stability of America’s status quo is illusory.
One of the enduring mysteries of the past decade is why inflation has remained tame while the central bank and government have pumped trillions of dollars of newly created money into the economy. Millions of words have been written about this, and so some shortcuts will have to be taken to make sense of it in one essay.
Let’s start with the basics.
1. Adding newly created money but not generating new goods and services of the same value reduces the purchasing power of existing money. To keep it simple: say the economy of a country is $20 trillion. (Hey, the US GDP is $20 trillion…) Say its money supply is $10 trillion.
So banks and/or the government create $2 trillion in new money but the value of goods and services only expands by $1 trillion. the “extra” $1 trillion of newly created money (either “printed” or borrowed into existence) reduces the value of all existing money.
In effect, the new money robs purchasing power from all existing money. Those holding existing money have lost purchasing power while the recipients of the new money receive purchasing power they didn’t have prior to receiving the new money.
Isn’t it obvious that those at the top of the wealth-power pyramid don’t want us to know how much ground we’ve lost while they’ve gorged on immense gains? In the late 1970s and early 1980s, an era of stagflation, the Misery Index was the unemployment rate plus inflation, both of which were running hot. Now those numbers are at 50-year lows: both the unemployment rate and inflation are about as low as they can go, reaching levels not seen since the mid-1960s. (See chart below) By these measures, the U.S. economy’s Misery Index has never been lower and hence prosperity has never been higher or more widespread. But this simply isn’t true: the top 5% are indeed doing better than ever but the bottom 80% are losing ground and the middle 15% are only appearing to do well because asset bubbles have temporarily created illusory wealth. I propose a 21st century Misery Index: Labor’s Share of the Economy and Real-World Inflation. Headlines about labor shortages and rising wages are popping up, suggesting the long-awaited boost in labor’s share of the economy’s growth is finally starting.
These embedded processes strip away autonomy, equating compliance with effectiveness even as the processes become increasingly counter-productive and wasteful. Would any sane person choose America’s broken healthcare system over a cheaper, more effective alternative? Let’s see: the current system costs twice as much per person as the healthcare systems of our developed-world competitors, a medication to treat infantile spasms costs $8 per vial in Europe and $38,892 in the U.S., and by any broad measure, the health of the U.S. populace is declining. This is how systems and nations fail: nobody chose the current broken system, but now it can’t be changed because the incentive structure locks in embedded processes that enrich self-serving insiders at the expense of the system, nation and its populace. Nobody chose America’s insane healthcare system–it arose from a set of initial conditions that generated perverse incentives to do more of what’s failing and protect the processes that benefit insiders at the expense of everyone else.
The late Saturday release of the FBI’s heavily redacted FISA warrant application for Carter Page reveals that the Obama administration, eager to make a case to spy on a US citizen (and arguably the Trump campaign) cobbled together a combination of facts and innuendo from Page’s business dealings in Russia, several press reports of varying reliability, and of course, the infamous Clinton-funded “Steele Dossier,” which the FBI went to great lengths to justify despite being largely unable to verify its claims. Perhaps the most concerning takeaway, however, is the stark disconnect between the FBI’s multiple allegations against Page versus the fact that he hasn’t been charged with a single crime after nearly two years of DOJ/FBI investigations.
There has been a lot of confusion lately in the mainstream economic media as well as in independent media circles as to the behavior of stock markets in the wake of the recently initiated global trade war. In particular, stocks suffered one of the longest runs of negative days in their history in June, only to then spike just after Donald Trump “officially” began trade war tariffs in July. The expectation by many was that the headlines would cause an immediate and continued downturn in equities markets, but this was not the case. Many analysts have been left bewildered. This is an issue I have touched on multiple times since the beginning of this year, and it is something I predicted long before Trump’s election in 2016. But it is obvious that the schizophrenic nature of stocks needs to be addressed in a very concise, no-holds-barred fashion, because there are still far too many people who are looking at all the wrong causes and correlations. First, let’s be clear: stock markets are NOT tracking the news headlines. The past month should have proved this if there was any previous doubt.