“The simple step of a courageous individual is not to take part in the lie. One word of truth outweighs the world.”
– Aleksandr Solzhenitsyn
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August 5, 2024 — The truth is a touchy subject these days (what isn’t?). Lies, from small to large, are far more comforting.
You can take your pick on the lies.
In financial markets, the lie that AI is in a never-ending uptrend different from the dotcom boom has been questioned in recent days – leading to the market oscillating between all-time highs and a correction in the span of a few weeks.
The Magnificent Seven tech stocks, themselves, have given up $3 trillion in market cap since July 10.
On the political front, one of America’s two political parties rallied around a candidate without any voter input on the matter. The media christening has already begun, and we are, in this new candidate’s favorite bite of sound and fury signifying nothing, “unburdened by what has been.”
And there’s the biggest lie of all. That America’s prosperity will never be challenged, even as last week our total debt topped $35 trillion, up another $1 trillion in just a few months.
Today, friend of Grey Swan Investment Fraternity Joel Bowman looks at the ideas of truth, ignorance, and arrogance as they impact the declining American empire and its impact on the world. Enjoy ~~ Addison
CONTINUED BELOW…
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Arrogance Is Bliss
Joel Bowman, Notes From the End of the World
Our subject matter for today is one we know all too well: ignorance. It is a condition that strikes indiscriminately.
Whether male or female… abled or crippled… straight or gay… even two-spirited, one-armed eco-sexuals… we all, each and every unique snowflake among us, are susceptible to sudden and prolonged bouts of human-level nescience, which is to say, “unknowledge.” (Of course, some will experience stronger symptoms than others…)
Yes, gentle reader, the harsh prognosis applies to whites, blacks and Asians alike… to string beans and shrimps… to fatsos and chopsticks… to Democrats, Republicans and the mentally stable, too.
We mention all this not (only) to poke fun… but to offer some measure of relief to anyone laboring under the notion that there walks among our floundering species a chosen omniscient cohort, possessed of a knowledge both infinite and immaculate.
Au contraire!
To Hades in a Handbag
While it is true that we live in the so-called Digital Age, with heretofore unimagined access to information of every kind, not all of it is of equal, enlightening value. This may be of grave concern, as in the hands of fatally stupid people, even a little information can be a dangerous thing.
We might harness nuclear energy to power the world, for example, or blow the whole thing to Hades. Truly it must be said, when it comes to raw imbecility, to feeble-mindedness, thick-headedness and outright nit-wittedness, few creatures in the animal kingdom so distinguish themselves quite like man.
Speaking of our fellow sapiens, let us begin at the bottom of the pile. It is general election season, after all, that time of the Olympiad when the political class cranks up the dial on the Hubris-O-Meter to eleven (out of five), seemingly to test the credulity of its long-suffering constituents.
How often we hear extraordinary claims fall from the lips of these self-assured snollygosters… pretending to “know” all manner of unknowable matter… unfailingly backed up by an equally extraordinary lack of evidence.
MAGA…A
One candidate claims to know how to “Make America Great Again (Again)”… despite having done nothing of the sort during his first go around. Another promised he’d “Finish the Job” moments before dropping out. And now a third, replacement pantsuit announces, vaguely, “We are not Going Back,” leaving one to wonder where on earth she’s been…
But to begin our little segment here, it was President Donald Trump, with a jerrycan in one hand and a match in the other, who poured $8.4 trillion worth of kerosene onto America’s raging national debt inferno, something conservatives once pretended to care about.
The self-described “King of Debt” spent like a drunken Democrat during his term in office, adding 60,000 jobs to the federal payroll over that time, all while claiming to be “draining the swamp.” He inked almost $4 trillion worth of “pandemic relief legislation,” including $3 trillion in what were essentially helicopter checks, a number that would make Mr. Bernanke himself blush.
It’s true that (in part due to the unrestrained spending spree), the labor force participation rate inched up slightly during Mr. Trump’s first few years, but the increase was negligible, from about 62.7% when he took office in Jan. 2016 to 63.3% when covid came to town…
The ensuing pandemic panic sent that rate plummeting (to a low of 60.1% in April of 2020), before it recovered over time, in part while another dunderhead, President Biden, was fiddling in office (allowing him to erroneously claim that it was his own unalloyed genius which had driven a natural mean reversion and not, as was the case, pre-pandemic jobs being refilled as some – though by no means all – folk eventually went back to work).
There has been little mention of this metric since, of course, as it has quietly resumed its downward trajectory. Having peaked around the time Pets.com was exciting faint hearts, it has been steadily falling for a quarter of a century.
Mr. Trump’s “greatest economy of all time” claim is dubious, too. After all his bluff and bluster, average annual GDP growth under The Donald was almost exactly in line with his bombastic predecessor (2.3% per year)… and, it looks like, his sleepy successor, too (~2.2% projected).
Like the labor force participation rate, American GDP growth has been in steady retreat – through administrations red and blue – since shortly after the end of WWII. While annual growth rates averaged about 4% during the ‘50s and ‘60s, they drifted lower in the ‘70s and ‘80s, to about 3%, before fizzling to around 2% by the end of the century, where they have languished for the past two decades.
Presidents come. Presidents go. Only debt, deficits and decline remain…
Despite…not Because
Astonishingly to many, this seemingly inexorable march continues while the world’s mighty entrepreneurs and techno-whizzes are busily bestowing their beneficent bounty upon us… the dot com boom (and bust)… the fracking revolution vs. federal bans… social (and anti-social) media… cryptomaina vs. flailing fiat flimflamia… Artificial Intelligence and good ol’ fashioned human stupidity…
How, with such a cornucopia of goods and services at our trembling fingertips, from Netflix to Amazon… Uber to Alphabet (Google)… Tesla to Nvidia to NFTs and beyond… could our dear leaders fail to lead us to the promised land?
It will surprise few readers of these pages to learn that we thrive as a species not because of the genius intervention and omniscient central planning of our elite overlords… but despite them. It is not the state which grants us our liberties and the largesse that derives from the exercise thereof. Rather, it is a special knowledge which lies beyond the grasp of all would-be rulers…
Which brings us full circle to the inexhaustible subject at hand: all that which we do not (and cannot) know. It is not difficult to track the history of collective stupidity at the political level. Even the noblest of undertakings are fraught with danger.
You may begin an experiment confabulating with Franklins and Washingtons, Jeffersons and Hamiltons, Adams and Madison, for example, and within a devolutionary blink of the eye, wake to find yourself surrounded by Bushes and Obamas, Trumps and Bidens…and staring down the harrowing possibility of a Harris. ~ Joel Bowman, Notes From the End of the World
So it goes,
Addison Wiggin
Founder, The Wiggin Sessions
P.S.: We made a whirlwind trip of it… to Vegas and back in a few short days. I don’t want to waste your time if you’re not interested, but if you are, there’s a great write-up of the show we traveled to see: right here. The author is roughly my age and has had remarkably similar experiences to my own.
P.P.S.: How did we get here? An alternative view of the financial, economic, and political history of the United States from Demise of the Dollar through Financial Reckoning Day and on to Empire of Debt — all three books are available in their third post-pandemic editions.
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites:Bookshop.org; Books-A-Million; or Target.)
Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com
