We've become a society of corporate automatons who question nothing. Compliments of technology, the Idiocracy has knowledge that's a mile wide and an inch deep. Trusting the usual idiots is not going to work...
Denial pervades every aspect of our society from the environment, the economy, to health and all areas in between. Financialization has systematically destroyed the economy. CHS asks the relevant question, why have wages lost ground for the past several decades? The real answer, not the one he provides, is because financialization requires ever-higher returns on capital. If profits are not rising then stock prices don't move higher. Merely maintaining an asinine level of income means nothing to the stock market, growth is the only factor that moves prices. Without growth the P/E multiple expands since all future income at the current level is already "priced in". Only growth in "E" will enable growth in "P". The drop in wages relative to GDP is directly offset by an increase in corporate profits.
Wages versus profits, % of GDP:
As we see above however, there are limits to Supply Side Ponzinomics in the form of lack of demand. At some point demand displacement via outsourcing and automation reaches the limits of household and sovereign debt accumulation, at which point, the entire "system" collapses. In the meantime financial engineering via stock buybacks continues unchecked in an aging society which values return on retirement capital above return on wages.
On a similar note, this society is in no way prepared for the consequences of global warming. Just having the endless debate has winded this aging Idiocracy...
"Neither the B.C. wildfires nor the flooding are close to an end. Even when the immediate danger passes, the recovery and rebuilding will take decades. This is our new reality. We need to get used to it, and we need to start by being better prepared for these unprecedented disasters. Over the last 20 years, the number of weather-related disasters has nearly doubled...Not only are there more droughts, wildfires, floods, hurricanes, ice storms and tornadoes, they’re more severe."
The list of denialistic issues right now is staggering. The
Idiocracy is basically boxed in by denial:
The economy is boxed in by the Fed and Trump
Trump's tax cut is boxed in by the fiscal cliff
Treasuries are boxed in by the economy
The dollar is boxed in by Treasuries
U.S. stocks are boxed in by Japan, Europe and Emerging Markets
Emerging Markets are boxed in by commodities
Oil is boxed in by shale and OPEC production increases
Banks are boxed in by Trump's fantasy tax cut
Trump and North Korea are boxed in by hubris
There's no way out.
Which means we're in the sweet spot:
"This recovery is probably broader than it's ever been as far as participation. It's reached Main Street in America with full employment ... but it's already reached every corner of the globe"
"The recovery has reached every corner of my portfolio"
"Just buy Amazon and stop worrying about the 'Conomy"
"Stick with stocks, so we can sell"