So, the US posted another set of decent (not spectacular, but decent) job gains. It’s hard to credit this to anything but the price of oil. I say this because large chunks of the rest of the world are throwing off lousy stats, including China, either the most important economy today or the second most important, depending on how you slice your onions. And a lot of the non-job US numbers have been atrocious as well.
I’m curious how long this dynamic can go on. It’s good that oil prices are low (as long as you don’t sell it), but the general collapse of commodity prices and the general reduction in Chinese manufacturing activity looks very bad.
A lot of the world economy is in the hands of various decision-makers. Those who can print money, public or private, control the economy, and given the lack of mark to market, they are not particularly constrained by “economic reality” if such a thing exists.
The way inflation has pooled in highly specific areas tells the story. What we have is two things:
- Vast funnels of money to the rich;
- vast manipulation of prices to forestall market mechanisms from working (which would wipe out the rich);
This means there is vast mal-distribution of resources, even by the warped standards of pre-financial crisis markets.
Traditionally such mal-distribution comes to an end because those who don’t mal-distribute, or mal-distribute less, defeat those who do. But the world system is set up to make sure that no one can or will distribute in an effective and efficient matter, by freezing them out from needed resources, and by rewarding elites for cooperating with the current regime. “This might not be good for your country, but it’s good for YOU.”
Since external threats won’t work, and since internally oligopolies and the politically connected are rewarded over socially effective and efficient enterprises, this system can only end when it collapses internally. That can mean internal collapse of the world system—deals which become so ruinous for too many member countries that they revolt (Greece might, though it hasn’t yet. Venezuela tried and failed.) Or it means internal collapse, as the inefficiencies become so blatant that countries cannot maintain internal order and cohesision. You can see this in Mexico, which has buckled under the requirements of maintaining the world order. I can pretty close to guarantee that Mexico would not be in this state if the policies that pre-dated free trade deals were still in place.
The smarter elites are, thus, doubling down on repression. Whether it’s Canada after the Parliament Hill shooting, France in the aftermath of Charlie Hebdo, America in the aftermath of well, who needs an excuse any more—the developed world is clamping down with draconian near-panopticon surveillance, huge restrictions on previous civil liberties and draconian “justice” for anyone they want to destroy.
I think, personally, that this is a race they’re going to lose. I’ll write on why, next week.
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Monster from the Id
The Malefactors of Great Wealth will lose sooner or later.
Appetite and rage sometimes overcome fear, or else there would be no crime in the USA. Our “justice” system is already frightful enough to deter any rational actor who is not actually facing death by hunger and/or other deprivation, though Ian is correct that this fact won’t stop the Malefactors and their political lackeys from doubling down on repression.
Even if no other humans can defeat them, there is always “The Wrath of Gaia”.
Of course, the trouble with that is if Mommie Dearest Nature cuts loose, she won’t, indeed can’t, differentiate between the aristocrats who have agency, and us peasants who have none.
Dan Lynch
this system can only end when it collapses internally.
Yes, Iron Law of Institutions and all that.
There is no true democracy in the US that gives the 99% any real voice, and in any event the 99% are easily divided and manipulated by social issues. The oligarchs control the media and most people believe what the media tells them to believe and care about what the media tells them to care about.
So while optimists like Matt Stoller may see growing discontent as cause for optimism, I suspect it will merely lead to more civil strife and repression.
Eventually something will happen to force a change — an internal collapse, WWIII, climate change, or some such thing. But I’ll probably be dead by then.
I have never before been so pessimistic. I grew up in the Jim Crow South, the Vietnam War era, and yes there were tons of problems yet it seemed we were slowly making progress. Now we are headed in the wrong direction, going backwards, rolling back the post WWII social contract, expanding the police state, and ramping up military aggression.
Stirling Newberry
link
Lee Doran
OMW Ian…can’t wait to hear why — or how — they might lose! It’s too close to call for me right now…needs one or two more pennies to drop before a clear trend might become evident for me…looking forward, L.