‘The Next Question’: Socially Useful Counternarrative
One of the reasons I gently (and ironically) discourage people from consuming too much in the way of "alternative" commentary around markets and geopolitics is that the vast majority of it is pure counternarrative -- that is, counternarrative for its own sake. Or, actually, not for its own sake. Rather, for the sake of generating web traffic by preying on the gullible. Prior to big-tech's efforts to demonetize and otherwise knee-cap platforms associated with foreign influence campaigns and pro
15 thoughts on “‘The Next Question’: Socially Useful Counternarrative”
Trump being the master of the counternarrative and false equivalency.
I’ll borrow from Alan Watts here on Money, “Imagine you are a carpenter and you show up on the job site and the boss says ‘sorry, we’re out of business, we’re all out of inches.” So you say “what do you mean? we have lumber and workers and land and people need the house right?” “Yeah but you see we just do not have anymore inches, it’s impossible.”
We’re still addicted to the idea Money exists in and of itself. MMT is really just acknowledging that money is a bookkeeping tool and nothing more. You don’t build a house with money. You don’t feed an army with money. Inflation and Deflation are just examples of what happens when you’re doing the bookkeeping poorly.
In an episode of Rick and Morty, Rick destroys the intergalactic federation by changing a cell in a spreadsheet from 1=1 to 1=0 making the entire intergalactic economy collapse immediately as the “Dollar” became worth zero dollars. This sounds like cartoon nonsense but it’s basically where we are. Until we start modeling the economy in terms of physical properties instead of dollars and driving the economy through policy instead of interest rates and QE we’re going to continue trying to grow crops, etc. by putting more numbers into excel.
As I so often seem to comment, the constraint to debt monetization seems to be the rapidly expanding wealth gap and the crowding out of the middle and lower class from an ever increasing portion of American life. Healthcare, education, home ownership, (food and other commodities these days 😉 )
Your piece on the feds lack of self awareness in this regard (several months back if remember correctly) was a beauty.
The highly-educated (e.g., people with post-graduate degrees) aren’t generally amenable to counternarrative for its own sake because they typically ask “the next question.” Almost as a rule, no purveyor of counternarrative for its own sake will ever answer (or even acknowledge) “the next question.”
There are symptom solvers and problem solvers.
“There are [many] symptom solvers and [few actual] problem solvers.” This condition persists because we generally don’t know how to frame problems properly. All adaptive systems, those that react to changes in their internal and external environments, all have explicit or implied goals they must achieve or maintain to remain at a steady state within the limits of their resources. All problems are the same — not maintaining system performance within required limits. The reasons for failing to achieve adequate performance vary, but in business firms the reasons for failures in performance are virtually all the fault of bad management. Symptoms are neither causes nor problems. Rather they are legible signposts that show bad performance and suggest causes. Symptoms themselves cannot be “fixed” and the problem (bad performance) can only be solved by eliminating the causes. As suggested by fredm421, all constraints are resource-based.
Our only restrictions are physical.
So what’s say the Fed decides to issue every single United States citizen 1 Million dollars? What would actually happen? A ton of spending, inflation, tax receipts, and the hottest economy that the world has ever seen. No more homelessness, hunger, poverty (for a time anyway).
Why not just do that then?
This is an interesting proposition. Lets say the Fed by some mechanic deposited $1,000,000 into every persons new free checking account at the USGOV bank which they just setup.
So first I imagine everyone wipes out all consumer, mortgage and student loan debt. A massive multi-Trillion dollar surge hits the banking industry followed by a complete drop in revenue. Private banks are set for 100 years and publicly traded ones pay the biggest dividends and bonuses in history then immediately begin to struggle to survive.
Next people start quitting jobs they hate and going to college, trade school, moving abroad, etc. Open job positions begin to climb rapidly driving up wages.
Next people begin to start spending on things they have always wanted to do. Home repairs and renovations, fancy cars, travel and having children. The next baby boom is beginning.
Interest rates start to normalize to balance the demand as inflations starts and investments are shifted to more stable less speculative instruments.
Then a couple years in people will likely start looking at those ROTH IRA’s with interest… I mean I can max out my contributions annually with ease. The stock market already flying high on enhanced demand for goods and services goes hypersonic.
So far so good.
But there will be some real big losers here. Imagine you owned the next 30 years of a students income at 6+% interest or you owned $35k in credit card debt on a bunch of US families. Instead of milking them for the next few decades… you just get your cash back. That sucks, better things stay the way they are… You can never let people out of debt bondage.
The fed wouldn’t issue the money. The fed would purchase the treasuries necessary to keep the long end of the curve from running away (though, hey, maybe they’d just let the long end run away).
Possible results include asset price inflation to make today’s seem tame (assuming the fed continues with controls) and real economy prices spiraling due to increased consumption without increasing supply (I suppose we could call them supply chain disruptions if they prove some semblance of fleeting)
Asset price inflation definitely (already been seeing that anyway). Why do you assume there wouldn’t be an increased supply? I mean initially we’d see what we’ve been seeing the past year vis a vis inflation and things selling out. But increased demand would drive increased production and more efficient production. With everyone spending all this money and having ample supply of it available, business revenues would fly through the roof while labor for crap jobs would plummet. You’d see an immediate uptick in automation purchases and hiring for automation innovation specialists. Skilled labor would become the only labor pool widely available and that pool would expect to work on things that they believed in.
An interesting thought experiment to say the least.
the supply chain disruption joke was meant to imply the possibility of long term supply increases.
Glad we agree on the asset price side.
One of the most tragic commentaries on the US is how the kleptocrats and oligarchs (including Wall Street and both political parties) have gaslighted nearly everyone into simultaneously believing:
1. the US is the richest country in history
2. the US is speeding toward bankruptcy
This is a contradiction. Not only is it bald-faced absurd, but it is a purely-mental prison of our own design. However, I also think it may lead to one of the greatest ‘own goals’ in history. As long as the contradiction is forced upon the world via orthodoxy, and it is swallowed and believed, the world will react to it as if it is reality. Because reality is intersubjective. That means, to me, it’s far, far likelier that the currency (issued by the orthodox high priests) will devalue in a type of soft default, than that the wealthy and powerful will ever voluntarily restore the ‘solvency’ of the ‘national’ ‘debt’ by using their immensely-adequate wealth. The country is not insolvent in a real economic sense, and the debt is not debt – the problem is that the nation is not “a nation”, really. Don’t be fooled by the flag waving and jingoism of sociopaths, there is simply no collective enterprise. Call it what you like, or choose your favorite analogy: extractive imperial colonialism, neo-feudalism, or an LBO on an otherwise sustainable operation that siphons off everything and leaves a dead carcass.
Yup, colonialism worked so well abroad they brought it home. There is a reason Doctors without Borders operates in the US.
I think what you really just described is a virus.
That’s why politicians are the gangsters of today. Some will say that’s too harsh so maybe I should say they are the least able to perform the functions that modern society needs from the role of politician. Certainly there are modern pols who mean well, but they are dupes (or martyrs at best) in an organized syndicate dedicated to sucking up as much wealth and power as they can for themselves and their capitalist enablers. Even when they can get a majority to support something worthwhile, they lack the technical skills to get it done. They are experts at manipulating the psyche of the masses to the point of getting us to sacrifice our sons and daughters in the fight against whatever bogeyman they can conjure to keep us imprisoned by our own fear.
I apologize for the rant, it’s born of frustration.