300 Million Hamsters

300 Million Hamsters

Has the Fed regained its credibility as a check on inflation?

That’s the question. Answers run the gamut.

At one extreme are incredulous lamentations for the ostensible absurdity of claiming to be “at war” with inflation when CPI price growth is still quadruple the Fed’s policy rate and PCE is more than triple its target.

At the other are exasperated protestations centered on the peril and, to some observers, the suicidal insanity, of claiming that the solution to economic misery brought on by soaring food and fuel costs, is more misery in the form of job losses.

Claudia Sahm, whose star has risen considerably over the past two years, encapsulated the latter argument. “A recession is worse than inflation. A lost pay check or even lost hours would far exceed the extra monthly costs due to inflation,” she wrote, in an Op-Ed for the Financial Times this week.

Let’s assume Sahm is right. That a recession is worse than inflation. That’s not true if inflation exceeds a certain threshold (say, 50%, for example) and stays there for a prolonged period of time. And the veracity of Sahm’s claim also depends on how long it takes for a newly jobless worker to find another job, and whether someone else in the same household remains gainfully employed, and so on. But let’s assume she’s generally correct. That in most cases, and in advanced, developed economies where we can be reasonably sure that inflation won’t exceed, say, 20%, even in a worst-case, a recession is worse than inflation. The next question is: Worse for whom?

At a very basic level (stripped of most nuance), the Fed must demonstrate enough resolve in the inflation fight to plausibly claim they tried their best. Their price stability mandate isn’t going to change in time to unburden monetary policy, officials have shown no appetite for moving the 2% target higher and all well-meaning Progressive talking points aside, the only sense in which the Committee’s maximum employment mandate isn’t met is if you adopt a literal interpretation of “full employment.” (Personally, I think we should adopt such an interpretation, but that’s an entirely separate discussion.)

That, in essence, is what Zoltan Pozsar argued this week in another provocative essay. Pozsar’s contention is that inflation, in its current manifestation (i.e., driven by geopolitical factors), may well be beyond the capacity of monetary policy to control. But the Fed nevertheless has to try. “Consider that inflation today is way above target and employment is way more than ‘full’ — there are more job openings than there are people to fill them,” he wrote, of the dual mandate, adding that,

‘Full-full’ employment is a part of the inflation problem. Fulfilling both of the Fed’s mandates requires less growth: Not in measurable goods but in immeasurable services, where we measure the health of the sector through wages and demand for labor. And today, demand for services and demand for labor still remain way too strong. The market can talk all it wants about a ‘soft landing,’ but we need an ‘L’-shaped adjustment in activity, and an ‘L’-shape has two parts: First an ‘I’ which you can think of as a vertical drop (perhaps a deep recession); second, an ‘_’ which you can think of as a flatline.

I’m sympathetic to that argument if for no other reason than that Americans’ faith in their institutions has never been lower. As expounded in “America Has An Existential Credibility Problem,” the Fed can’t afford to join Congress, the presidency and, most recently, the Supreme Court, in becoming the subject of public scorn and estrangement. If it does, the country risks a total meltdown. Whether we’d be better off for such a reset is an open question, which I’ll address below. But regardless, I understand the risk and therefore the appeal of prioritizing the inflation fight, even if the odds of a worst-case inflation scenario are vanishingly small.

It’s easy for us (i.e., for market participants who are all too familiar with never-ending Fed memes and conspiracy theories) to scoff at the idea of the Fed becoming another casualty of America’s institutional credibility problem. “The Fed is already the subject of public scorn!” some of you will exclaim. “Nobody trusts the Fed!”

But the fact is, the vast majority of Americans don’t know the first thing about the Fed, let alone what it does. Nobody showed up at the Eccles building in June to protest the largest rate hike since 1994, and the second such move, delivered a scant six weeks later, was likewise notable for a total lack of public interest, or at least relative to the hot-button social issues at the center of the country’s culture wars.

In many ways, this is a highly unfortunate state of affairs. The public does care about inflation and, as I’ve endeavored to explain on any number of occasions, if it ever finally dawns on Americans that nearly everyone is united in economic precarity — if not in absolute terms, then certainly relative to a tiny fraction of the polity — the nation would quickly rediscover a lost sense of community and common purpose. It’d be a tumultuous affair, but once the figurative and literal dust settled, society might be better for it.

As it stands, though, Americans tend to view inflation (and anything to do with economics, really) as the responsibility of politicians, but with caveats. Politicians are castigated for poor economic outcomes — voted out of office, even — but rarely demonized. By contrast, being on the “wrong” side of Roe risks literal demonization by half the electorate.

Make no mistake, it is still “the economy, stupid,” as the saying goes, but even as nothing should be more important to people at the end of the day than their finances (because that’s how families get fed, after all), recessions and inflation don’t engender the same sort of acute, reactionary rhetoric and behavior as issues directly involving race, creed, religion, gender and the nebulous concept of “rights.”

Currently, the country faces the worst cost of living crisis anyone under 40 has ever lived through. Yet, there are no burning cities — or if there are, it’s due to extreme weather, not angry citizens setting cars on fire. Two years ago, when the culture wars boiled over, cities burned. The fires were “wild,” all right. But they weren’t wild fires.

Politicians (and particularly Republicans) understand all of this quite well. They know that what really matters is the maximization of one’s economic means. And even if they don’t sit at the very top of the wealth hierarchy, the power they wield by virtue of their positions in government compensates for the wealth shortfall. Powerful politicians aren’t as rich as the titans of American industry, but those industries spend billions on lobbyists and, when the stakes are high enough, CEOs will grovel at the feet of lawmakers if it means getting what they want or, just as often, being spared something they don’t.

The current system doesn’t benefit everyday people who, by and large, live like hamsters. Whether you make $40,000 or $200,000 per year, you’re a hamster. Chances are, your day goes something like the following. You wake up, wander around an enclosure embellished with odds and ends that someone else thought you’d probably enjoy looking at (or laying on). You work, where that almost always entails some iteration of digging a hole only to fill it back up again. You go back to your enclosure and run full speed for 20 minutes on a conveyor belt (or ride 20 miles on a stationary bike to nowhere). You eat something very similar to what you ate the previous day, usually out of the same bowl (or one that looks just like it). Then you curl up and sleep in a corner. You’re a hamster.

With just a few exceptions, politicians want to keep it that way. But 300 million hamsters is a lot of hamsters! If they suddenly decide, collectively, that they want more out of life, there’s not a lot anybody can do to stop them — not if they act in concert after concluding that for all their differences, they’re united in a pitiable existence that’s become intolerable.

The best way to prevent a hamster rebellion is to ensure they never recognize a common cause, or if they do, that they see it as secondary to what makes them different. Politicians know that exploiting social issues is a foolproof way to prevent the public from uniting around the only truly common cause: Shared economic precarity, either outright or relative. That’s why they spend so much time feeding America’s culture wars.

Republicans prey on deep-seated prejudices and anxieties to lure voters who, from a purely economic perspective, have absolutely nothing in common with the GOP and stand to lose whatever pittance of money and bargaining power they have to Republican economic policies. Democrats pretend to care about income inequality, but the message is everywhere and always couched in the language of the culture wars: “Only we care about African American communities” or “We’re the party of gender equality” and so on.

Note that there’s one exception: Bernie Sanders. Bernie gets it. He tried to unite Americans around the only thing they all have in common. Twice. Twice he tried to lead a hamster rebellion. In a testament to the notion that preventing Americans from finding common cause is a bipartisan effort, Republicans never had to worry much about Bernie. Why? Because Democrats made sure he never won a primary.

How does this all relate to the Fed and the fight to control inflation? Well, it’s pretty simple, really. If the public loses faith in the money and long-term inflation expectations become truly unanchored, all of the divisive social issues that politicians spend every waking hour inflaming in a bid to ensure the public is too preoccupied with divisions that don’t matter to find common purpose in the only thing that does, will be supplanted, virtually overnight, by existential questions about survival in the face of rapidly devalued money and the perception that the people who are supposed to ensure the money’s stability lack not just the will to do their job, but in fact the capacity.

Perhaps — just perhaps — that’s why a deep recession is preferable to the risk, no matter how remote, of rampant inflation. Democratic governments can manage a disaffected populace through an economic downturn. After all, recessions are inevitable and although the public may not know much about the business cycle in a textbook sense, voters intuitively grasp the ebb and flow. By contrast, managing an already restive polity through hyperinflation is quite difficult. To the extent it’s possible at all, it generally requires true authoritarian rule — the public has to be more scared of the executive than poverty.

Over the past two months, Fed officials’ rhetoric around the prospect of an economic slowdown has shifted, albeit subtly. Below-trend growth is now seen as desirable, for example. Because below-trend growth is what’s necessary to bring down inflation. At the same time, the Fed’s rhetoric around inflation has shifted too, only not so subtly. As Jerome Powell is now fond of putting it, failure to control inflation “isn’t an option.”

Now, by all means, go argue amongst your fellow hamsters about today’s trending hashtag.


48 thoughts on “300 Million Hamsters

  1. Sorry this is a straw man argument. The choice is not a depression or extremely high inflation (or hyper inflation worst case). The choice is how quickly to bring down inflation and at what cost? Right now the FOMC is in a panic and wants inflation lower quickly. Personally I would rather that process be a little slower so maybe we can avoid a major downturn from an overly aggressive FOMC. Add into the fact that inflation is being caused 50% on the supply side which is out of the Fed’s hands. But pick your poison. Monetary policy works with a 6-18 month lag usually. These days it seems the market adjustment period is accelerated so maybe we are looking at 4-12 months. As far as the great Bernie Sanders goes I always ask his fans this question. How many bills has he sponsored as the major advocate that have become law? I believe the answer is a big fat ZERO- 30 years in Congress and absolutely zero to show in the legislative record. When the NY Times interviewed him for an endorsement for President back in 2016 and asked him who regulated the largest banks (One of Sanders biggest talking points his Major issue)? Old Bernie could not answer the question for them!!! (Comptroller of the Currency and the Federal Reserve fyi). So as far as I am concerned old BS is full of it and is a blowhard. Good at angry rhetoric and glorious phrasing but quite a bit short of accomplishment on his resume. This hamster has no interest in him as a leader. There are much smarter and more accomplished progressives.

    1. This comment is indicative of why Americans will always be hamsters. They don’t want transformative change. They want to hang out in their enclosures and hope that, over time, they can buy a larger enclosure. Centrist politics has failed this country. Neoliberalism has failed this country. If you look at the trend, you could argue that every single administration going back four decades has generally failed this country given that working people have become worse off, and worse off, and worse off over the entire 40-year period. Eventually, working people got so sick of it that they elected a reality TV show host and when he lost an election, a handful of them were mad enough to storm Congress with sticks and baseball bats and bear spray.

      So yeah, sure, it’s all going great. Inflation is transitory. Powell’s got this all under control. Biden’s approval rating isn’t 38 (that’s 38, with a three at the front). Joe Manchin doesn’t run the country. And the reason the GOP is increasingly dominated by unhinged conspiracy theorists has nothing whatsoever to do with a lack of hope, a lack of education and the generalized sense in which this country is becoming the closest thing to a failed state as you can get in a developed market.

      1. I’m not sure I agree with the statement that Americans do not want transformative change, I think it is more accurate to say we do not know how to achieve the change we seek and need, but the election of Trump and to a large extend Obama’s, were in large part driven by a real desire to change, a radical need for something different. The hamsters will likely be unable to bring about positive change, in my view they are more likely to bring destructive change that will end our nation as we know it today. The hamsters in my birth nation of Venezuela were convinced Chavez would bring about major change, he did, just not for the best. We’ll get something similar here, on the left or the right, the end result will be the same and the cycle will take care of itself, through inflation or recession the demolition of democracy is inevitable. Great read as usual H, even if I don’t see things the same way as you on this one I always enjoy reading your more “provocative” muses. I also enjoy RIA’s thoughtful commentary to many of your posts.

        1. It’s possible (and I’m just tossing this out there) that if Democrats don’t run a leftist demagogue (e.g., let AOC have the party), then Republicans will continue to push further and further down the road to establishing an authoritarian hybrid system that’s part far-right fascism and part theocracy.

          Here’s the thing: Bernie Sanders isn’t going to run again. AOC should be the heir to that platform. Running her is the best option for Democrats even if it sounds crazy right now, and I’ll tell you why.

          The old guard Republican party is over. I think we all know that. For a variety of well-documented reasons, the Trump wing is in the ascendancy, and will probably remain so for the foreseeable future.

          That bodes very poorly for the types of folks who frequent these pages (i.e., rational people) because it suggests the national conversation will continue to be divisive and people will drift further and further apart, raising the odds of conflict and further undermining societal cohesion such that every conversation is contextualized via culture wars.

          We’re already there in many respects, but it’ll get worse. A situation where no one can talk to anyone about anything unless they agree completely on national politics is totally untenable. Nobody really wants that. But that’s where we are. It’s miserable. Ask any Trump voter if they could have a beer with a Biden voter. They’ll tell you no. And vice versa.

          We know where the GOP is headed and where they intend to take the polity. They’ve made it very, very clear. And it’s not a great place. It’s also not a modern place. In some respects, it’s a crazy place for lack of a more nuanced way to say it.

          Biden probably won’t run again. Several Democrats have already said as much. I don’t know of another Democrat who can win a national election against a Trump or a DeSantis at a time when, as the commenter below correctly noted, everything is visceral identity politics.

          If inflation is still high by 2024, running a centrist Democrat in a stagflationary environment where voters are vulnerable and angry and the GOP is running either Trump or “Trump with a brain” (as some people call DeSantis) is a recipe to lose.

          When visceral identity politics is what matters, you fight fire with fire. Run AOC. She’ll either lose in a landslide or win in one, but either way, it’s better than losing for sure by pretending that — you know — Sherrod Brown or Amy Klobuchar can beat Trump by “reasoning” with “rational” Americans. That’s unrealistic. He’ll run them over, and anyone who’s being honest knows it.

          I won’t weigh in on what an AOC presidency might look like from a policy perspective, because who knows. What we do know, though, is that Trump’s brand (whether it’s perpetuated by him or some successor) is long-term social poison. It’s bleach in the veins, if you’ll pardon the joke. It sets the stage for something truly nefarious down the road. Everybody knows that intuitively, even if they won’t admit it.

          Do note that Trump himself reportedly (and repeatedly) suggested that AOC would be an effective candidate. By his own account, he was “starstruck,” even though he thought she “knew nothing.” Trump’s a guy who knows a thing or two about how to rally the disaffected masses.

          I don’t think Democrats can win with centrist, staid, transactional politics. I suppose you could argue they just did, in 2020. But I don’t know. I just don’t see it in 2024. I don’t think they’re playing to win right now. Running a boring candidate isn’t going to work unless, by some miracle, someone from the old guard GOP manages to beat Trump or DeSantis and Republicans emerge from their own primaries with a sane candidate.

          There is another option for Democrats. They could run Michelle Obama.

          1. Why in God’s name would you wish that on Michelle?

            Re: AOC, I had to google it, but she will technically be eligible. She turns 35 less than 1 month before election day 2024.

            Also, I appreciate that you don’t ascribe Republican voters’ choices to stupidity or evil, but rather to a lack of hope, to structural injustices, and such.

            In support of your point that a centrist, staid, transactional Democrat is unlikely to win despite Democrats having just won with a centrist, staid, transactional politician, Biden only won because of Covid. If the pandemic never happened–or if it merely waited a year–Trump would have been reelected in a landslide. Unemployment was trending down, wages were outpacing inflation, markets were going up… Biden would have gone down in flaming wreckage had it not been for the catastrophic mishandling of the Covid debacle. (Incidentally, WTF monkeypox? Is Biden incapable of learning?)

          2. Thanks as always, H., for your consistently interesting assessments of the state of affairs.

            The failing of democrats to stand their ground in the face of MAGA is their milk-toast manner of presentation. Most of them lack the stomach to deliver hard and meaningful rhetoric. They nervously cling to the idea of an idyllic Congress of lore in which republicans and democrats work hand in hand across the aisle, stating their case and finding common ground to hammer out legislative blessings, which is hogwash.

            While President Biden has been a noble President and restored some competency to the office, his lack of ability to use rhetoric from the bully pulpit of his office is a clear shortcoming. Likewise, he apparently has only a marginal ability to communicate and does a poor job of managing expectations surrounding legislative initiatives. There are important reasons why he is not popular. That said, I’m very thankful he and the Congress are managing to get some work done before November. It’s a good sign, and it’s grossly needed to enable any hopes for success in the fall election.

            A substantive variable required for the presidency is a capacity for rhetoric, which AOC has demonstrated. I admire her for that. Note also that she and her progressive colleagues had to learn some hard lessons about what it takes to get something done in Congress. It’s a good lesson to learn for members of Congress.

            AOC has the rhetorical chops to be a member of Congress, and maybe a senator. But it’s early in her career. I do not believe she demonstrates a capacity to be “presidential,” whatever that is. She would be a sympathetic candidate, but she needs more time. In a series of presidential debates with Ron Desantis, AOC would be bits of food on his plate. And beating her up would be a feast for the eyes of the MAGAs.

            Tim Ryan, on the other hand, has been a member of Congress for 19 years. He has a strong and passionate voice and rhetorical chops like no one else I see in the Democratic Party, with the exception of Pete Buttigieg. Either one of these guys would stand up to Desantis in a debate and hold their own.

            Yes the party of Lincoln is done. The party of Trump is on the rise, though his rhetoric defies logic and common sense, and he will likely be unable to run for office in the face of legal troubles and costs that will plague him for the remainder of his life.

            As for what becomes of the MAGA crowd as a whole, while I have no illusions about the MAGA crowd and the likes of Desantis will sharpen the quality of the rhetoric they use to promote themselves, the democrats potentially also have the capacity to put up better candidates and make better arguments. I need to wait and see how the democrats respond.

          3. H

            Wow. This comment is one of your best posts ever. Bang on the nose.

            One of the great myths of our Republic is that exists because of the miracle of compromise. BULL! Behavioral research shows that when two individuals or groups diverge in principle, the more they talk, the farther apart they get. In our country compromise, to the extent it ever existed, was purchased with hard currency, oft labeled the “pork barrel.” Look closely at a US map. Each state has at least one military installation, national park or forest, major government complex or regional division, something that brought big money to the state and likely has a key senator’s name on it, or behind it. Right now, pork barrel politics have become passe as our lawmakers believe they must win from principles, the most dangerous concept in politics.

            Ever notice how when Trump purses his lips, tilts back his head, and thrusts out his chin to convey his displeasure, he looks just like Benito Mussolini in his heyday. Uncanny, especially in three-quarter profile.

      2. If you want change, Bernie ain’t your guy. My point was that he cannot legislate his way out of a paper bag. Has had 30 years in Congress and nothing to show for it. Can you name a bill with his name on it? You cannot because there are none. 2. I like AOC, but she is nowhere near ready to be President. She really blew it chasing development out of Queens- by the way I live in NYC and she is not as popular there as this was a real error. That development could have been transformative and brought a lot of benefits to her constituents if handled properly. She was too busy being “progressive”. Every city in the country was vying for this development and she chased it away. 3. I did not say the FOMC should not raise rates and inflation is transitory. I did imply that the Fed is probably going too fast and the risk is probably not worth it. I suggested that the argument is about going too fast and too aggressively when the Fed’s part of the inflation problem is likely only about 50% of the problem. 4. I would love to see transformative change. We just don’t have the votes for it now. That is why a politician like Stacy Abrahams is so vital. She changed the dynamics of voting in Georgia almost singelhandedly. Much more important than a Bernie Sanders or AOC. The rubber meets the road there.

        1. Sometimes “legislative achievement” isn’t the best measure of a politician. You can argue that a willingness to compromise so as to achieve incremental things has value, and proud we are of all of them, but Bernie has always been willing to vote for the compromise bills and achieve that incremental improvement. At the same time, being an idealist allowed him to really move the needle. There’s something to be said for uncompromising idealism, and his example has at least pointed to an alternative path, even if the electorate hasn’t followed him (and don’t forget how damn close he came. He was within a tick of beating Hillary, and polls suggested he would have outperformed her versus Donald.) Idealism has its virtues, and Bernie has demonstrated that. Finally, do you really think Queens is worse off for lacking another hundred thousand Amazon employees? That said, I have to assume you’re correct that her actions were unpopular there, not being a local. Still, I’ll join your bid for Stacy Abrams; regardless of what one thinks of her politics, she’s the most effective Democratic politician in America right now.

          1. That area of Queens near Citifield (NY Mets stadium) is a very underdeveloped area of Queens with body shops and derelict industrial buildings- about 35-40 minutes from midtown via the 7 train. It was ripe for improvement and NYC has been dying to get it into a higher use. The spinoff benefits from a starter development (likely more would have followed) would have been huge- the 100,000 Amazon employees would have probably created another 200,000 jobs for the surrounding area- an area which is extremely poor. AOC’s big objection is that it would have driven up rents and put a strain on existing transportation. She also objected to the tax benefits to Amazon. The tax benefits were to be paid out over 20 years and with a clawback if certain employment metrics were not met. An experienced politician would have negotiated subway improvements and money for subsidized housing. AOC’s answer was just to say NO. Take a ride to the neighborhood and then think about the lost opportunity for some of AOC’s constituents. Every other city was rolling out the red carpet for this- only AOC in her supposed wisdom helped to put the kibosh on this. She hurt the people she represented. As for Sanders, the measure of a senator is how he or she can get things done with laws and/or working with the federal bureaucracy to benefit his or her state. Bernie has no bills he sponsored pass in 30 years. As for understanding the workings of the government as I posted he could not even name the regulators of the banks he was blasting- one of his signature planks in his 2016 campaign. Lots of bombastic rhetoric and not much to show for it. He has not been that effective as chairman of his committee either from what I can glean.

  2. Just off the top of my head- see Sherrod Brown of Ohio, Stacey Abrahms of Georgia (future), Letitia James (attorney general of NY), Amy Klobuchar (MN Senate), Peter Buttigieg (Mayor Pete transportation secretary), and even Beto (but he needs some seasoning as well)… there is a long list of better choices out there

  3. H, fantastic post, RIA, great comment.

    RIA, great point about Bernie, though in his defense his whole reason to be is to unite the hamsters and getting into nuanced government regulation conversations mean nothing to a very significant portion of the voting hamsters. Elections are visceral popularity contests.

    I would also gently note, even if we don’t get extremely high inflation, but persistently relatively high inflation its worth considering there is a financial breaking point to the resilient american hamster.

    1. I have to give people something “fun” to read and engage with in these summer months, even if “fun” means somewhat grating and hyperbolic. Even during the most exciting years (this being one of them), summer day after summer day of data and tedious policy debates have a tendency to wear on folks’ patience. Especially when Wall Street is on vacation and the audience skews more towards “general” readership. Tuesday was pretty tedious with the Zoltan pieces (notwithstanding his metamorphosis from short-end strategist to financial thriller author), and last week was downright exhausting on the data front. I wanted to do something lively and colloquial.

      1. These posts are definitely the most entertaining, and the comment section is a testament to that truth.

        Having said that–just to give some customer feedback–the meat-and-potatoes that keeps me coming back posts are all about CTA inflection points, gamma driven dealer flows, vol control updates, and the weird arcana of index breakdowns, blackout periods, buyback windows, and all that finance nerd stuff. The more greeks and acronyms the better. As an added bonus, the better I understand why markets are doing what they’re doing, the less I feel like a hamster.

        The real secret of understanding hamster psychology is realizing that hamsters don’t want to know that they’re hamsters.

  4. This article is a tremendous example of why I come here. There are some great laughs…but more importantly, the article forces me to consider several different topics (the Fed, inflation vs recession, culture wars, I’m a hamster, etc.) in ways that my brain is not used to looking at them…and I think that’s good for my brain.

  5. Wow — amazing post and comments. I totally agree with H’s take on future Dem candidates and that a particularly useful perspective is what seems to scare the crap out of the GOP. I would add Katie Porter to that list. (Ilhan Omar might be a bridge too far at the moment). I have felt for a while that the Dems seem to lack what I’ll call the barking dog factor. They seem to only be able to go high and serve their dishes cold and refined-like, rather than stand and fight. In addition, an awful lot of their best brawlers seem to get sidelined – Al Franken is perhaps the best example, but I’d add Eliot Spitzer, Rahm Emanuel, and Anthonies Wiener and Cuomo. I don’t love all those people, but they (along with the women mentioned) clearly raise Republican hackles. I truly believe Hillary might have prevailed if she had just turned on that debate stage and made a crack at his expense.

    I don’t think hamsters don’t want transformative change. They buy lottery tickets. fantasize about going on The Price is Right and root for home runs. I think corporations (and the super rich) and their political mouthpieces have done everything they can to scare the hamsters about transformative change. They give it scary names like radical socialist agenda. or undermine it as a boondoggle that won’t completely fix the problem in one fell, efficient swoop. They throughly demonize its proponents. The ACA is the best example I can think of. Look how many calories the Republicans have burned, and continue to burn, against that.

    And then we let those corporations (and rich people) give as much money as they want to their mouthpieces. I wish we could start there. I mean surely the number of Americans supporting unlimted/unfettered campaign donations is less than 10%, yet like gun control. it is essentially untouchable except around the margins.

    1. Been cogicating about your post. Furious One. At first I sympathized, witness the “bump” I posted in the Bullard commemt thread.

      But that’s a habit from my years as a hedge or prop trader days.

      If we advertise ourselves as long-term stewards of capital, the ssues being debated here are more important.

  6. Well, this hamster has thought about moving his cage to a different country, at least part of the time. I wonder what it’s like to be a remote-working hamster in, say, Copenhagen?

    1. I’ve thought about that repeatedly, but at the end of the day, I only feel secure in a country that’s not able to be invaded, that’s huge enough to rule out being obliterated by a single natural disaster, that has ample natural resources, that has a formidable military and that has a large nuclear arsenal. Only three countries check all of those boxes. And I’m absolutely not moving to the other two.

      1. Switzerland comes verrrrry close.

        A formidable military & nuclear arsenal can work by proxy (e.g. Australia or Canada under the American umbrella). Also, the nuclear arsenal has a downside–being a target. In the event of a nuclear exchange, all of planet earth suffers the consequences of nuclear winter (I dove through some interesting research on that subject, prompted by events of late February), but only countries that are direct targets suffer irreversible annihilation.

        The ideal location in some kind of worst-case scenario is likely somewhere in higher-altitude Indonesia. Unfortunately though, absent the worst-case scenario, you’d just be spending your life in a sweltering jungle for no purpose.

      2. Maybe I’ll try out being a hamster in a beret. An independent nuclear arsenal, core NATO member, not easily invaded (except by the folks who did it twice in the last century but now can scrape together maybe 20 working Leopard tanks), nuclear power generation, generally temperate weather, lots of uncrowded land if you like that kind of thing, universal healthcare, not terribly expensive outside of a couple cities, and food of high quality.

    2. I’m a remote working hamster in Switzerland. We’re staying because our (for now) political and societal stability. There’s also climate change. We moved higher and May move higher still.

  7. There was a hamster who use to get away and observe real things on a cloudy day dreams or in a pacing along moonlit broken cap rock vertebrae of giants kind of way. He heard it on the wind he copped a feel, he was rewarded. He did all of this because he saw it coming the wheel, the compartment, the decline. He still gives it hell on occasion but now even the weather confines and the potential right wing autocracy bubbles and spits in the core of every vein of discussion under the sun in his hamster land.

    Thank God he gets a peek sometimes a peer of other life out there, here.

  8. Agree with RIA on AOC. Though she will just make it to 35 by Election Day 2024, she will need a lot of seasoning prior to getting there. Shooting down developments in her backyard, while then showing up at a gala as a billboard, has the feel of inconsistency to be really up to the task. It is one thing to dunk on Cancun Ted during Uri. Quite another to get buy-in on a vision for a more perfect union from a large majority of the voting hamsters.

      1. This is one of the more interesting questions if you like to wargame political maneuvering.

        1) Biden has to say he’s running until the last minute, because otherwise he’s a lame-duck, and lame-ducks lose power.
        2) Kamala, as the VP, has to embrace this charade for as long as possible.
        3) Appearances must hold until the midterms, because midterms are important.
        4) Kamala will absolutely be running; but of course your implied question is whether she will stand a chance. And that is the question.

        The answer is no. No one likes her.

        1. Kamala is one of the less likeable politicians in the Dem party (not saying she isn’t charming in person, I’m talking about her public persona) and the underperformance of her Prez campaign plus the turmoil in her VP staff and the notable absence of any substantive role for her in the Administration are all unpromising signs.

          Funny aside, the Second Husband was one of my associates in my law partner days. When I realized that, this hamster started feeling very old.

  9. I’m often shocked by how aligned our worldviews are, Mr. H, coming from very different backgrounds (I’ve never worked professionally in anything remotely connected to Wall Street). This was a fantastic treatise.

    The ironic part of this story, to me, is that we’re all here to gain further insights into how we profit from the gyrations of the very heart of the beast, yet we danced around that there is a rot deep in the roots of capitalism that itself grows in complexity, velocity, feedback loops (doom loops!), veracity, and probably several other ‘ity’s.’ I have way more cynicism then ever and increasing doubts that an uncomfortable reset might not wait until after my own lifetime.

    The problem as I see it is that the hamsters all still believe they WANT and NEED this system, that there is no alternative (to borrow a phrase) and somewhere and somehow there are smart people who will continue to pull the right levers at the right time to keep the whole charade running.

    I think I’ll go have a drink now. I’ll toast you while I chuckle and contemplate how someone making $40k could feel kinship with someone earning $200k in their quest to make life better for all.

  10. I still believe that the people most qualified to hold public office also have enough sense not to run for public office. I think we would do much better drafting people to serve in the congress and senate for set periods, sort of like the Army. You get your draft notice, go serve for 4 years then go home. I suspect there would be more sanity in the system. It could have some restrictions, such as people would need an educational level of at least an Associates degree in order to be in the draft pool. And, like jury duty, some excuses would be allowed for not serving.

  11. “And the reason the GOP is increasingly dominated by unhinged conspiracy theorists has nothing whatsoever to do with a lack of hope, a lack of education and the generalized sense in which this country is becoming the closest thing to a failed state as you can get in a developed market.”

    The hope in Mar A Lago syndrome is manifest autocracy, where the victim hamster will reap the reward of their ongoing activism in a newer better cage off of the floor looking down the un-maga-fied lowly chump hamsters at cat level.

    But do not ask me who the democrats should run, I did not think Biden could pull it off. However he wa not a desperation play call with enough time on the clock to stick to a game plan.

    Dig into that Kansas strata that was accidentally exposed as a result of aggressive right wing activism. Run the ball right at that, over and over again.

  12. My wife and I have been discussing this article for the past half an hour. You are absolutely correct, we are all hamsters (slaves?) to the current economic system and government. This is by design, as you say, and both parties are complicit in furthering this system that benefits the very few, themselves included. We are also both Bernie supporters, we even went to a local rally of his. The Democrats claim they want transformative change but the reality is they are fat, dumb, and happy with the way things are. They get to be the “good guys” in a political system where the other guys are just crazy Russian propagandists. Do they change much? Nope, but they can sleep at night knowing they are TRYING to do good. I think we all know they aren’t trying and they really don’t care a whole lot about the little that they are accomplishing. Otherwise you’d see more urgency, more debate, more action in Congress.

    The inflation vs. recession argument cracks me up, by the way. Economic growth = inflated assets = inflated commodities = inflated consumer prices. Recession = declining assets = declining commodities = deflated consumer prices. How the hell else are you going to curb inflation except by forcing a recession? Now where this becomes problematic and to your point, where cities literally might burn, is when the recession turns into a depression. Now people are homeless and starving together, in a forced community of suffering, that is a recipe for revolt. With the current state of global inflation, a recession is a certainty, a depression on par with the 1930’s is more likely now than it has been since. I think everyone knows this, the Fed is leveraging the only tools they have to act like they somehow have control over the current global economic situation, but I think they are as clueless as anyone else on how to solve these problems.

    Personally, we have a plan to get off this hamster wheel, it’s called sailing around the world. When that plan goes into action, depends on how quickly things fall apart. Either we go into a global depression, which will make said boat more affordable for our cash heavy accounts, and we sail out of this burning nation thankful for our fortunes. Or, we sail out of this authoritarian nightmare of a country under the cover of night with no lights on. Either way, we have a plan, and sometimes that is all you need to keep yourself going.

  13. A final thought occurs to me. A slowly increasing number of legit scientists have begun to support the idea that our world, the Milky Way and the rest of the universe might just be in the Matrix after all. So folks have posited various outcomes that would be characteristics of a Matrix universe and have run experiments based on these ideas, only to find that several characteristics of our environment are actually compatible with membership in the Matrix. Not hamsters… exactly. Just sayin’

  14. Great article H. Thank you.

    Yes, I’m a hamster.

    Now what’s the alternative to being a hamster?

    If the population as a whole we’re mostly lions, well then in short order, there would be a lot of dead lions.

  15. I think the Democrats should go full “Reality TV” themselves in 2024 and run Oprah Winfrey and “The Rock” (Dwayne Johnson) for President. (Apparently Dwayne considers himself an Independent, but he endorsed Biden in the last election, and I think he would accept the role.) Just imagine what the 2024 Presidential Debates would look like then! (“Do you smell what The Rock is cooking?”) At one point chairs start flying and someone gets body-slammed right on the stage. How is that much different then the second Presidential debate in 2020, or from Trump’s staged photo-op with a Holy Bible in hand in front of a church after government officers had just tear gassed a group of protestors nearby? Imagine the dilemma you would create for the stereotypical, gun-toting, younger male, Republican voter who now has to choose between voting for Trump/DeSantis, or an actual action-hero movie star and WWE legend? I know, I know . . . could he or Oprah actually govern? Do we want to make a complete mockery of our most sacred institutions? The not so funny part is that we seem to have already veered into the Twilight Zone where some of that is concerned. In many ways AOC is the anti-Trump: young, female, minority, progressive, and wicked-smart. But she has already been vilified by the opposition, and even by some of her own party. I don’t see how she wins too many moderate or crossover votes, or gets a progressive agenda through Congress. Gavin Newsom’s name has also been mentioned, but I am uncertain about his national appeal. Other than Joe Biden, does any potential candidate have any meaningful foreign policy experience? That would seem to be very important right now, and Biden himself is struggling with it. What we need now is a legitimate candidate (dare I say from either party) with Abraham Lincoln’s conscience, Teddy Roosevelt’s energy, FDR’s ability, and John Kennedy’s charisma (or at least some combination thereof). That’s a tough ask people, and I don’t see anyone like that out there right now. Where is our Winston Churchill?

    1. I believe you hit paydirt T-Dog. Considering the right’s fascination with media celebrities, Reagan, Trump, Sonny Bono, Clint Eastwood, Arnold Schwarzenegger, Fred Thompson and Georgia football great Herschel Walker to name a few; republicans might cross over to vote for The Rock & Oprah ticket. But realistically, we’d probably end up with Rocky & Bullwinkle after the Democratic celebrity primaries.

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