Of Two Minds

The mutually reinforcing crises aren’t in the future, they’re here now, and Jay Powell’s shuck-and-jive has lost its magical powers to cloak the rot with speculative bubbles. How many more times do we have to watch Jay Powell claim his speculative bubble isn’t a bubble, and that his massive expansion of billionaires’ fortunes will magically create jobs for all those living in the real world he’s created of stagnation, social depression and inequality?

Any economy stupid enough to rely on the insane distortions of GDP “growth” as its primary measure will richly deserve a Darwin Award when it inevitably collapses in a putrid heap of squandered resources and capital. We’re told the gross domestic product (GDP) measures growth, but what it really measures is waste: capital, labor and resources that are squandered and then mislabeled “growth” for PR purposes.

Perhaps we need an honest national dialog about declining expectations, rising inequality, social depression and the failure of the status quo. Even as the chirpy happy-talk of a return to normal floods the airwaves, what nobody dares acknowledge is that “normal” for a rising number of Americans is the social depression of downward mobility and social defeat.

Is that really what you want to spend your time doing, paying higher taxes? “No matter how much money I make, they will always print more. I can’t print anymore time.”

Kill authentic price discovery, you also kill markets, and in killing markets, you kill allocation of capital and risk management, and in killing those, you kill the economy. Back when prosperity was authentic, the Federal Reserve had little need for public relations.

How much energy, water and food will the “money” created out of thin air in the future buy? Finance is often cloaked in arcane terminology and math, but the one dynamic that governs the future is actually very simple.