Thursday, March 15, 2018

Post-2008: Failure Is The New Success

It's Republican against Republican now as the two sides of the party have to explain why forty years of economic orthodoxy just got thrown out the window. If it used to be so good, then why is it now so bad?

THIS, is what happens when a society gets taken over by salesmen.

My pending ebook will describe in graphic detail why Supply Side Economics has been a colossal failure. As if anyone needs proof, amid historically extreme debt levels, mass shootings, and fentanyl assisted suicides. 2008 proved definitively that Globalization and Supply Side economics failed, but somehow Generation Madoff revived the system for one more encore. As long as the Dow is going up, everything else can fall apart in real-time. We've turned into Japan - an aging Idiocracy recycling the same failed ideas over and over again, each time expecting a different result.  

I just watched Peter Navarro, Trump's trade advisor, provide a very cogent rationale for why trade protections are needed. Had he only made the same case forty years ago, all would be well right now. His key point is that the U.S. has the lowest overall (tariff/non-tariff) trade protections in the entire world. Which is the very same point I come back to over and over again. The legions of apologists for today's disaster believe that *free trade* is some sort of definitively proven paradigm for trade that has delivered unparalleled wealth to the societies that practice it. The only problem is that the very wealthiest societies on the planet don't have free trade. And no country in the history of mankind has ever used free trade to create broad based societal wealth. Real debt-adjusted U.S. wealth peaked long before *free trade* came into fashion. But that was before the days when debt was counted as GDP. The only reason why David Stockman et al. believe that trade protections were a Medieval policy is because they think that 1979 was the end of the middle ages. 

Honest GDP:
GDP - Federal deficit

As I said recently, the political problem is that the U.S. has far too many global multinationals domiciled in the country, which have every interest to subvert the U.S. political system to their own benefit. No other country has anywhere nearly as many publicly traded multinationals. Which explains why today's Mad Men have conjured up this fantasy narrative that free trade has made the U.S. the wealthiest country in world history. Whereas on the basis of debt accumulation, quality of jobs, middle class incomes, real minimum wage, and household median wealth - the U.S. economy has never been weaker. Again, that lesson was delivered in spades in 2008, but today's Idiocracy has the attention span of a coked up flea.

Therefore, what is needed is what is coming - the lesson that modern economics as taught in all major universities and believed by legions of today's EconoDunces has been an abject failure, infected by latent stage dementia.