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Page added on June 12, 2018
What’s Wrong With The Economy: 9 Toxic Dynamics
These nine dynamics are mutually reinforcing.
Beneath the surface signals of an eternally rising stock market and expanding GDP, we all sense something is deeply, systemically wrong with the U.S. economy. These nine structural dynamics generate secondary dynamics, all of which are toxic to social mobility, sustainable prosperity, accountability and democracy:
1. The financialization of the economy, which transformed services, credit, risk and labor into commodities that could be traded globally. Financialization generates enormously asymmetric returns: those with access to low-cost credit, global markets and expertise in finance collect the lion’s share of gains in income and wealth.
2. The technological transformation of the economy, which has placed a substantial scarcity premium on specific tech/managerial/communication skills and devalued ordinary labor and capital. As a result, the majority of gains in wealth and income flow to those with the scarce skills and forms of capital, leaving little for ordinary labor and capital.
3. The end of cheap fossil fuels. The fracking boom/bubble has obscured the long-term secular trend: the depletion of cheap-to-access and process oil. As many analysts have observed (Nate Hagens, Gail Tverberg, Richard Heinberg, Chris Martenson et al.), the global economy only grows if energy and credit are both cheap.
4. Globalization, which transformed the developing world into the environmental dumping ground of the wealthy nations and enabled the owners of capital to offshore waste and labor.
5. The destructive consequences of “growth at any cost” are piling up. “Growth” is the one constant of all existing political-economic systems, and none of the current Modes of Production (i.e. the structures that organize production, consumption, the economy and society) recognize that “growth” is not sustainable.
The first two dynamics drive three other dynamics that have hollowed out the productive economy:
6. The dominance of debt-funded speculation as the means of “getting ahead”as opposed to producing products and services of intrinsic value that serve the core needs of communities.
7. The economy’s gains in income and wealth are concentrated in the very top of the wealth-power pyramid: the top 5%–entrepreneurs, professionals and technocrats, etc., and within this class, most of the gains go to the top 1/10th of 1% –the existing owners of wealth, and financiers/speculators with access to cheap credit.
The net result is the bottom 95% have few opportunities to “get ahead” outside of gambling in the asset bubbles du jour: the stock and housing market. While the average middle class household may be able to borrow enough to speculate in the housing bubble, two factors limit the odds of success for ordinary investors/gamblers:
A. The gains in housing are concentrated in specific markets; outside these hot markets, gains are modest.
B. Asset bubbles eventually pop, leaving those still owning the assets with losses. The risks are thus intrinsic and high. The average investor/gambler lacks the experience needed to recognize the bubble has stopped expanding and exit the market before ll the other speculators rush for the narrowing exit.
8. The devaluation of ordinary labor and capital means the bottom 60% of the economy that lacks the requisite skills with a scarcity premium in the Emerging Economy have lost easy access to the ladder of social mobility.
9. The concentration of wealth and power in the hands of the self-serving few corrupts the economy and democracy. The U.S. economy is dominated by insider and elite rackets, skims, scams and cartels/quasi-monopolies, all of which corrupt the economy by creating perverse incentives for exploitation and gaming the system to benefit the few at the expense of the many.
This corruption in service of maximizing private/personal gains at the expense of the system itself also corrupts the mechanisms of governance, which are now little more than cloaking devices that protect insiders and elites from scrutiny and consequences.
The 20% above the bottom 60% may appear to have some access to social/economic mobility, but this is largely an artifact of the bubble economy since 2009. Once the bubble deflates, the illusion of social mobility for the “middle class” between the bottom 60% and the upper 20% vanishes.
The “upper middle class” between the bottom 80% and the top 5% is being squeezed by the over-production of elites, i.e. the over-abundance of those with college degrees and the relative scarcity of secure jobs within the top 5%. As a result, credential inflation is rampant, with Masters Degrees replacing Bachelors Degrees as the default for a white-collar job, and PhDs replacing Masters diplomas as the new default for positions that lack security and upward mobility.
In other words, the number of people who qualify for and desire a slot in the elite class (top 5%) far exceeds the number of slots available. As Peter Turchin has explained, this competition generates social disorder at the top of economic heap as the top 20% fight over the few positions open in the top 5%. The disgruntled, frustrated losers far outnumber the relatively few winners.
These nine dynamics are mutually reinforcing, meaning that each dynamic strengthens one or more of the others, reinforcing each other so the sum of the nine is far more powerful than a mere addition might suggest.
The New Aristocracy (the top 9.9%) (The Atlantic)
* * *
Charles Hugh Smith via OfTwoMinds blog
346 Comments on "What’s Wrong With The Economy: 9 Toxic Dynamics"
Cloggie on Thu, 14th Jun 2018 1:47 pm
“I am watching the US Open with Tiger playing..A real sport for sophisticated gentlemen”
Hence yet another branche of sport where Europe dominates:
https://en.wikipedia.org/wiki/Ryder_Cup#Results
Seriously, golf is not a sport but a pasttime for gents who will soon be dead.
GregT on Thu, 14th Jun 2018 1:47 pm
“A real sport for sophisticated gentlemen.”
Tiger Woods is hardly a sophisticated gentleman MM, and calling golf a sport is a bit over the top. It’s more like a leisure activity. One that I personally first took up when I was 7 years old.
JuanP on Thu, 14th Jun 2018 1:50 pm
MM, You are the most repugnant human being I have interacted with in my life. You just beat another one of our board members, which I won’t name, for the title. It makes me happy to know that you must be an extremely unhappy person.
MASTERMIND on Thu, 14th Jun 2018 1:52 pm
JuanP
Who gives a shit if they are the largest country..The us is the third largest and we have around 100 million more people than Russia..And our economy is ten times as large..If the US is horrible than why did you come here? To leach off of us..You are just like that filthy Asian carp..
Cloggie on Thu, 14th Jun 2018 1:53 pm
““I am watching the US Open with Tiger playing..A real sport for sophisticated gentlemen”
Tiger Woods, millimind’s idea of “sophistication”:
https://en.wikipedia.org/wiki/Tiger_Woods#2017_arrest
“2017 arrest
On May 29, 2017, Woods was arrested near his Jupiter, Florida home by the Palm Beach County Sheriff’s Office at about 3:00 a.m. EDT for driving under the influence of alcohol or drugs. He was asleep in his car that was stopped in a traffic lane with its engine running. He later stated that he was taking prescription drugs and did not realize how they might interact together.[248][249][250] On July 3, 2017, Woods tweeted that he had completed an out-of-state intensive program to tackle an unspecified issue.[251] On August 9, 2017, Woods, who skipped his arraignment,[252] entered a not guilty plea through his attorney Douglas Duncan and agreed to take part in a first time DUI offender program and hold another arraignment on October 25.[253] At a hearing on October 27, Woods pled guilty to reckless driving. He received a year of probation, was fined $250, and ordered to undergo 50 hours of community service along with regular drug tests, and was not allowed to drink alcohol during his time of probation.[254] If he violated his probation, he would have been sentenced to 90 days in jail with an additional $500 fine.[254]”
MASTERMIND on Thu, 14th Jun 2018 1:57 pm
greg
You just don’t like Tiger because you are a Nazi and white nationalist sympathizer..You are just jealous because you are a piece of soggy white bread..Who can’t run, jump, sing, or dance..And your wife has a hairy bush..you should take a weed wacker to that thing..
LMFAO!!
GregT on Thu, 14th Jun 2018 1:58 pm
“The us is the third largest and we have around 100 million more people than Russia..And our economy is ten times as large.”
Two of the largest hurdles facing humanity in the not so distant future. Overpopulation, and economic depression.
MASTERMIND on Thu, 14th Jun 2018 2:00 pm
Clogg
Tiger is still a human he makes mistakes..And what about all the rest of his life when he has been a perfect gentlemen?..what about the millions of dollars he has raised for charity? I don’t see you talking about that..Tiger is the ultimate underdog..A black man playing golf..Just like Obama..A true American hero..Against the odds..someone who can give anyone hope..
JuanP on Thu, 14th Jun 2018 2:02 pm
Mm, China and India have a bigger population than the USA. Your country is not the best at anything worth mentioning. You are scum. And why would you think I need to justify my actions to an insane, illiterate, retarded lowlife like you? The idea is preposterous! You are one deeply disturbed motherfucker!
GregT on Thu, 14th Jun 2018 2:04 pm
“Who can’t run, jump, sing, or dance.”
I have been a long distance runner for most of my life MM, and I still run with my wife from time to time. I can play the piano, guitar, base, harmonica, trumpet, and I can hold my own on a drum kit. I began vocal training when I was a young boy, and have been in a number of bands throughout my life. My mother was a concert pianist and a Royal Conservatory piano instructor, so music has been a very big part of my life.
I have absolutely no desire to ‘jump’.
JuanP on Thu, 14th Jun 2018 2:06 pm
Mm, Only scum like you could consider TG a gentleman and a hero. All he is is a good golf player, that’s it.
JuanP on Thu, 14th Jun 2018 2:08 pm
And, Obama is a spineless coward. Your heroes say a lot about you, scum. If you want to pick a black hero because you are racist you should at least pick someone better. How about MLK or Mandela?
Cloggie on Thu, 14th Jun 2018 2:13 pm
“Tiger is still a human he makes mistakes..And what about all the rest of his life when he has been a perfect gentlemen?..what about the millions of dollars he has raised for charity? I don’t see you talking about that..Tiger is the ultimate underdog..A black man playing golf..Just like Obama..A true American hero..Against the odds..someone who can give anyone hope..”
If it is any consolation to you, I have TW in much higher esteem than white f* like you, who openly and repeatedly advocate that Russia needs to be destroyed in a surprise nuclear attack. Scumbags like you are the bottom of the barrel of humanity. Every ounce of you is pure misery. Failed DNA.
GregT on Thu, 14th Jun 2018 2:13 pm
“All he is is a good golf player, that’s it.”
Was. He kind of went downhill after he was caught messing around on his wife, when she was pregnant with his kid, no less. Yah, a real gentleman……
Davy on Thu, 14th Jun 2018 2:29 pm
“Doomsday warning: It would only take 100 nuclear weapons to wreak global devastation”
https://tinyurl.com/ybd9plem
“New research argues that 100 nuclear weapons is the “pragmatic limit” for any country to have in its arsenal. Any aggressor nation unleashing more than 100 nuclear weapons could ultimately devastate its own society, scientists warn.”
“This “environmental blowback” would involve a significant drop in global temperatures as soot from nuclear blasts prevents sunlight from reaching the Earth’s surface. This, combined with reduced precipitation, could severely impact food production, experts warn, potentially resulting in mass starvation. “If the agricultural productivity reverts to preindustrial yields because of a nuclear strike, most countries would not be able to feed themselves,” the study says.”
GregT on Thu, 14th Jun 2018 2:45 pm
“Doomsday warning: It would only take 100 nuclear weapons to wreak global devastation”
Faux News? Better than The Hedge™, by not by very much. Try harder Davy.
LOL!
Davy on Thu, 14th Jun 2018 3:00 pm
grehggie, try harder to explain that this warning is not true, dumbass. BTW, you guys need to quit polluting the board with your lame sports talk. Facebook your groupie pussies already. This is a place to discuss issues not your stupid soccer, golf, and musical instruments ability.
JuanP on Thu, 14th Jun 2018 3:07 pm
Shut the fuck up, Davy, or I am going to get on your case again. We all remember how it went for you the last time. The only reason I’ve been ignoring you is because I think you are a completely hopeless lunatic so don’t get me started. Nobody has posted more bullshit on this forum than you over the years, so you have absolutely no right to tell others what to write. I hope for your own good that this is the last I hear about it.
JuanP on Thu, 14th Jun 2018 3:07 pm
Goaaaaaal! Goooooooooal! Goooooooal! Goooooal! Gooooooooooooooal! Go Russia!
Russia 5 – Saudi Arabia 0
What a great day for Russia, Russians, Putin, and the world! Russia couldn’t possibly have asked for a better result. The Russians beat the crap out of the Saudis. Russia wins the Russia 2018 FIFA World Cup opening game in Moscow earning 3 points and a positive 5 goal difference. I couldn’t be happier right now. I am going to troll the board’s imperialists like crazy for a day and rub this amazing triumph on their faces. GO RUSSIA!
Davy on Thu, 14th Jun 2018 3:23 pm
Your choice Juan. I’ll give you a break today I think you are drinking or drugging something.
MASTERMIND on Thu, 14th Jun 2018 3:24 pm
Davy
Sharing faux news..I knew you were a Jesus freak..You dumbshit..Whats next the dailymail..LOL
MASTERMIND on Thu, 14th Jun 2018 3:25 pm
Why is JuanP such a fanatic for Russia? What a fucking retard..Keep sucking Putin’s cock, maybe when clogg is finished he can give you sloppy seconds..
Davy on Thu, 14th Jun 2018 3:32 pm
Mm, like I told grehggie, do you have an opinion on the subject or you just playing your stupid pricking games? No wonder the two of you play together so much you both think alike.
JuanP on Thu, 14th Jun 2018 3:35 pm
I don’t drink or do drugs, Davy, but you are obviously a delusional exceptionalist. This is your last warning. One more personal attack from you and I will hound you for three months. LAST WARNING! I hope you are smart enough to heed it!
JuanP on Thu, 14th Jun 2018 3:42 pm
Slavemind “Why is JuanP such a fanatic for Russia?”
I never in my life gave a fuck about Russia until a few years back. I have always stood up to bullies, though, and the reason I defend Russia is because I am sick and tired of the way the US government keeps bullying it. The USA’s Russia bashing is the reason why I defend Russia and I dislike the US government and media so much. The fact that you don’t understand or can’t accept what your country is doing is irrefutable proof of what a brainwashed idiot you are, Imaginary Neuron!
MASTERMIND on Thu, 14th Jun 2018 3:48 pm
Ukrainian neo-nazi mob mocks Roma women as they tear down Kiev camp with axes (VIDEO)
https://www.rt.com/news/429202-kiev-roma-camp-nationalists/
Davy on Thu, 14th Jun 2018 3:49 pm
Maybe you need to Juan or go back on your bipolar meds.
GregT on Thu, 14th Jun 2018 4:00 pm
“grehggie, try harder to explain that this warning is not true, dumbass.”
Just trying to help Davy,
Not everyone here has a vested interest in watching you fail so miserably, all of the time buds.
Davy on Thu, 14th Jun 2018 4:09 pm
Translation: I was only pricking you Davy. I have problems saying anything of substance so I pricki because it makes me feel tuff.
GregT on Thu, 14th Jun 2018 4:12 pm
“Ukrainian neo-nazi mob mocks Roma women as they tear down Kiev camp with axes”
The same neo-nazis that Victoria (fuck the EU ) Nuland, and John (put him out to pasture already) McCain, supported in the U.S. State department’s valiant overthrow of the democratically elected government of Ukraine.
MASTERMIND on Thu, 14th Jun 2018 4:13 pm
Russia warns Norway of ‘consequences’ after it invites in more US Marines
https://www.independent.co.uk/news/world/europe/russia-norway-us-marines-nato-border-moscow-ukraine-crimea-a8399601.html?utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#Echobox=1529010083
GregT on Thu, 14th Jun 2018 4:18 pm
“Russia warns Norway of ‘consequences’ after it invites in more US Marines”
As they should. The Empire is far more than just a little bit out of control.
JuanP on Thu, 14th Jun 2018 4:18 pm
Davy “Maybe you need to Juan or go back on your bipolar meds.”
I gave you two chances, but I guess you couldn’t control yourself.
I apologize to our few civilized, reasonable board members but I will be fighting Davy until the Fall when I start farming again.
Prepare yourself to be hounded for three months, exceptionalist. It is quite obvious that your insanity has overridden your intelligence. I had fun the last time I fucked with you so I look forward to what’s coming.
GregT on Thu, 14th Jun 2018 4:22 pm
“Translation: I was only pricking you Davy. I have problems saying anything of substance so I pricki because it makes me feel tuff.”
Never look a gift horse in the mouth Davy.
Faux Noise isn’t exactly a shining beacon of credibility. Linking to one of their ‘articles’ isn’t exactly lending any to yours either, not that you had any left to begin with.
JuanP on Thu, 14th Jun 2018 4:23 pm
It is really disappointing to see what Europe has become in the last few years; I expected better from them. I never had high expectations for the USA because most Americans are a bunch of illiterate, obese, ignorant, delusional retards, but I used to have a good opinion of Europe. I still respect Europeans, who are mostly intelligent and well educated, particularly when compared to Americans, but their governments are hopeless.
Makati1 on Thu, 14th Jun 2018 4:50 pm
“Davy chimes in with his usual bullshit, third grade putdowns and other meaningless posts.”
GregT on Thu, 14th Jun 2018 4:55 pm
“I had fun the last time I fucked with you so I look forward to what’s coming.”
Try not to be too hard on the poor guy Juan, he’s likely still traumatized from the time that the nanny made him go to his wing of the estate, without his creme brûlée.
MASTERMIND on Thu, 14th Jun 2018 4:55 pm
The cold war could only be played to a draw..But now with troops all around Russia and missile defense systems surrounding him..This game can be played to a win for the US..
Live free or die!
MASTERMIND on Thu, 14th Jun 2018 4:57 pm
The brighter the light, the darker the shadow..
-Carl Jung
Davy on Thu, 14th Jun 2018 4:58 pm
Idiots. Read the article and offer your lame reply then we can talk.
I see we have the gang back together again. You guys have to stalk and prick in groups because alone you are easy to neuter. In groups you can manage the extremist agenda easier. You guys think and act alike so this is understandable. This is great just a bigger challenge.
Davy on Thu, 14th Jun 2018 4:59 pm
3 is a charm dementia man. You said that twice yesterday 3rd world.
Makati1 on Thu, 14th Jun 2018 5:00 pm
“… one in five (Us) companies have debt obligations exceeding their cash flow—i.e., they are zombies just waiting to die.”
https://americansystemnow.com/wapo-warns-of-mother-of-all-credit-bubbles-whos-listening/
“Corporate America, in effect, has transformed itself into one giant leveraged buyout.”
WAPO is correct in this analysis. Finger pointing at China will not change the major collapse of the Us. Slip slidin’…
Makati1 on Thu, 14th Jun 2018 5:01 pm
As I said: Davy chimes in with his usual bullshit, third grade putdowns and other meaningless posts.
Makati1 on Thu, 14th Jun 2018 5:03 pm
MM doesn’t have an original though in his empty head. Just irrelevant quotes or peer reviewed bullshit. Oh, and Davy level putdowns.
MASTERMIND on Thu, 14th Jun 2018 5:15 pm
Madkat
Why do you always attack the peer review process? That is how the scientific method works..And has worked for over 200 years..Would you rather they not try to test things for accuracy?
I think it might be time to change your diaper old man..you stink!
MASTERMIND on Thu, 14th Jun 2018 5:20 pm
Studies show around half of all men last less than two minutes in bed..
Makati1 on Thu, 14th Jun 2018 5:24 pm
“MM doesn’t have an original though in his empty head. Just irrelevant quotes or peer reviewed bullshit. Oh, and Davy level putdowns.”
Does that answer your question? “Peer review” is years old before it is published. The world had changed since the time taken to do the “study”, write it up and circulate it to a select group of like minded ivory tower nerds. And…someone paid to do the study so it has built in spin. Nothing is done for free these days. Especially in the US. Everything has “spin”. Everything.
“Spin is a contemporary term for a form of propaganda that relies on deceptive methods of persuasion.”
https://www.thoughtco.com/spin-communication-1691988
Nuff said.
GregT on Thu, 14th Jun 2018 5:27 pm
Show others a little bit of common courtesy and respect Davy, or continue to reap the rewards of your own shit.
MASTERMIND on Thu, 14th Jun 2018 5:32 pm
Madkat
Peer review is not done years after..You have no idea what you are talking about..You just want to discredit science. if there was a better method than we would use it..You are just an old ignorant uneducated conspiracy loon..a former filthy construction worker..who has never studied shit..
JuanP on Thu, 14th Jun 2018 5:42 pm
Davy, the board’s foremost delusional exceptionalist lunatic keeps spouting the same BS like a broken record. Be afraid, guys, he is “moderating” us. LOL! What a freak!