Some economic doom & gloom

David Stockman says it wouldn’t be prudent

A sobering assessment of America’s economic health by a former Director of the Office of Budget and Management (OBM). Whether you agree or disagree with his analysis, it’s worth a listen:

Listen to “Josh Jalinski Talks to David Stockman, Author & Former Budget Director” on Spreaker.

Quoth David Stockman:

The trade war with China is aimed at the wrong problem: it’s not bad trade deals or even nefarious activities by the Chinese state, the problem is bad money – this tremendous money-pumping that the Fed has done over the last 20 or 30 years, which has really undermined the Main Street economy and caused production and good jobs to shift offshore.

[…]

At the federal level, we now have [$]22 trillion of debt… If you take households that have 15 and a half trillion of debt, business that has about 14, you take the federal government, state and local, and then financial institutions, the total debt in our society today is $70 trillion, sitting up there on top of a GDP that’s barely 20 trillion. So we have three and a half times as much debt as we have income, and if you look at history… that is off the charts, that is a warning sign that this system is not sustainable. When we had a healthy economy, pre-1971, we had in fact a whole century of good economic prosperity and progress, from 1870 to 1970, the average debt-to-GDP ratio for the whole economy was 150%, not 350%.

Dollar store America

Dollar store groceries

Delicious and nutritious!

Brother, can you spare a dollar?

A new report from the Institute for Local Self-Reliance’s (ILSR) finds that dollar stores tend to target rural and low-income neighborhoods, many of which are considered “food deserts,” meaning they lack access to fresh, affordable food.

“Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America,” Garrick Brown, the director for retail research at the real-estate firm Cushman & Wakefield, told Bloomberg in 2017. […]

As dollar stores grow increasingly popular, they’ve become an alternative to America’s biggest retailers, including Walmart, Costco, Walgreens, and CVS.

In the US, dollar stores are now feeding more people than Whole Foods. Their numbers have surpassed the combined total of Walmart and McDonald’s locations.

In 2016, the chain store Dollar General purchased 41 Walmart Express stores that were forced to shut down, despite operating on a similar model.

Though Dollar General isn’t a dollar store in the traditional sense (it sells items that cost more than $1), it’s often the only place to buy cheap groceries in isolated communities.

Clearly I need to revise my vision of the future:

  • Thesis: Dollar Store America
  • Antithesis: The United States of Bezos
  • Synthesis: A fully automated Bezos Dollar Store empire, with a jobless, UBI-collecting population fed by delicious, nutritious packaged foods whisked to their door by Amazon Prime Drones

Death of a nation

Social collapse intensifies as US life expectancy drops for the third year in a row:

Life expectancy in the United States declined again in 2017, the government said Thursday in a bleak series of reports that showed a nation still in the grip of escalating drug and suicide crises.

The data continued the longest sustained decline in expected life span at birth in a century, an appalling performance not seen in the United States since 1915 through 1918. That four-year period included World War I and a flu pandemic that killed 675,000 people in the United States and perhaps 50 million worldwide.

Public health and demographic experts reacted with alarm to the release of the Centers for Disease Control and Prevention’s annual statistics, which are considered a reliable barometer of a society’s health. In most developed nations, life expectancy has marched steadily upward for decades.

Life expectancy for men declined year-on-year, while that of women remained the same. Women enjoy 5 more years of life than men. Kirsten Gillibrand is right!

Overall, Americans could expect to live 78.6 years at birth in 2017, down a tenth of a year from the 2016 estimate, according to the CDC’s National Center for Health Statistics. Men could anticipate a life span of 76.1 years, down a tenth of a year from 2016. Life expectancy for women in 2017 was 81.1 years, unchanged from the previous year.

The growing drug epidemic has claimed more lives in one year than the total US combat deaths in World War I:

Drug overdoses set another annual record in 2017, cresting at 70,237 — up from 63,632 the year before, the government said in a companion report. The opioid epidemic continued to take a relentless toll, with 47,600 deaths in 2017 from drugs sold on the street such as fentanyl and heroin, as well as prescription narcotics. That was also a record number, driven largely by an increase in fentanyl deaths.

China is the main source of the illicit fentanyl in the US, raising an interesting parallel to the illegal opium trade which devastated Chinese society during the 19th and early 20th centuries.

This is why we can’t have nice things

Linus Torvalds

Linus Torvalds

Linus Torvalds, the famously surly creator of the Linux operating system, has been persuaded (pressured?) to grovel and step aside from the open-source project for the sin of… being rude.

The Linux community is probably the closest thing to a pure meritocracy that has ever existed on this earth. Perhaps not coincidentally, the Linux kernel powers every Android device on the planet, as well as most supercomputers, Amazon, Google, the New York Stock Exchange, the Japanese high-speed rail system and the US nuclear submarine fleet.

This is not hard to understand. A society that throws its geniuses under the bus to cater to the ever-changing whims and feelings of the mediocre, will rapidly cease to enjoy the benefits of genius. Once that happens, not only will progress grind to a halt, but the complex machinery of civilization will begin to fall apart, as the genius-hostile society loses the ability to solve large-scale problems.

Only a society in the grip of terminal madness would kill the golden goose because it was rude to the other geese.

Declining well-being of Americans

Professor Peter Turchin explains his observation that the well-being of Americans has been declining over the last four decades — a process called immiseration:

Last year I had an interesting conversation with someone I’ll call the Washington Insider. She asked me why my structural-demographic model predicted rising instability in the USA, probably peaking with a major outbreak of political violence in the 2020s. I started giving the explanation based on the three main forces: popular immiseration, intra-elite competition, and state fragility. But I didn’t get far because she asked me, what immiseration? What are you talking about? We’ve never lived better than today. Global poverty is declining, child mortality is declining, violence is declining. We have access to the level of technology that is miraculous compared to what previous generations had. Just look at the massive data gathered together by Max Rosen, or read Steven Pinker’s books to be impressed with how good things are.

There are three biases that help sustain this rosy view. First, the focus on global issues. But the decrease of poverty in China (which is what drives declining global poverty, because Chinese population is so huge), or the drop in child mortality in Africa, is irrelevant to the working America. People everywhere compare themselves not to some distant places, but to the standard of living they experienced in their parents home. And the majority of American population sees that in many important ways they are worse off than their parents (as we will see below).

Second, the Washington Insider talks to other members of the 1 percent, and to some in the top 10 percent. The top-income segments of the American population have done fabulously in the last decades, thank you very much.

Third, many economic statistics have to be taken with a grain of salt. […]

So what has been happening with the well-being of common, non-elite Americans? In my work I use three broad measures of well-being: economic, biological (health), and social.

Briefly:

-Economic: Wages of non-elite workers show “rapid, almost linear growth to the late 1970s, stagnation and decline (especially for unskilled labor) thereafter”; the “relative wage” (the nominal wage divided by GDP per capita) drops sharply after 1960; labor participation has been trending downward regardless of education level since at least the late 1970s.

-Biological: Average height of native-born Americans stopped growing after the 1980s (and has declined for some demographic groups); life expectancy growth has lagged behind Western Europe and for some groups, life expectancy has declined in absolute terms; suicide rates are climbing for all ethnic groups.

-Social: Average age of marriage and percentage of people unmarried are on the rise.

Remember when the original Star Wars came out? That was around the historic peak of American economic, social and biological well-being. Hard times are coming, and for an increasing number of people, have already arrived.

Training

Every age has its rituals. In the Age of Google, we have the Ritual of the reCAPTCHA, a compulsory visual test that requires a carbon-based organism to prove its sentience to a computer by selecting squares that seem to contain grainy images of a specified object. The organism must do this correctly in order to demonstrate to the computer’s satisfaction that it (the organism) possesses the mental faculties of invariant recognition, segmentation, and parsing, in which attributes humans tend to excel over computers. If the organism passes the test, it is permitted to continue with its intended task on the website.

That problem is that many human beings who are more or less sentient find the average reCAPTCHA to be hard and frustrating, owing to the intentionally crappy quality of the images, poor visibility of the objects, as well as certain definitional problems that the average internet user is ill-equipped to deal with. For example, should the user, tasked with identifying “street signs,” click on a square that contains part of a sign post? Then there are questions of process. Does the user click Verify immediately after clicking all the relevant squares, or wait for new images to materialize in the squares that have been clicked? None of this is clear, none of it is explained. The user twists in a fog of doubt and confusion, and frequently fails the test.

Google reCAPTCHA evil

Choose wisely (Source)

The reCAPTCHA is the reductio ad absurdum of modern life, a grudging surrender of countless man-hours of labor (over 100 million reCAPTCHAs are displayed every day) to feed the ravenous maw of an emerging artificial superintelligence. Because, of course, by completing these image recognition tasks, the human user is training Google’s vast machine learning datasets. TechRadar thanks you for your service in helping develop self-driving cars.

But while we are training Google’s neural networks, the machines are simultaneously training us — teaching us to be more compliant, more deferential to the machines, and more conversant in machine logic… in short, remaking humanity in their own image. The future is a slouched hominid clicking on a fuzzy image of a taco shop — forever.

The brief but glorious career of Fake Warren Buffett

Novelist Steve Hely points our attention to a fake Warren Buffett account on Twitter that somehow managed to rack up more than a quarter of a million followers while dispensing such insipid pieces of advice as “read and write more” and “you are not your job.” In a series of ridiculous tweets that captivated the entire internet, Fake Buffett guides us through the vicissitudes of life, offering his thoughts on “what’s cool” (saying thank you and holding doors open are cool), and serving up specially tailored “advice for the all the young people” [sic]. The account was suspended for being fake after just a few days of tweeting, but not before garnering approving retweets and likes from some of the biggest personalities in the media and entertainment world.

Many of these people apparently thought the advice was coming from the real Buffett, but putting aside the issue of their gullibility, it’s rather amazing how huge of a market there is for platitudes that would look lame even on a motivational poster. Fake Buffett may have been short-lived, but his legacy will endure as a window into the tragic mental landscape of the modern American.

Daily links: Economic stresses mount

Debbie Downer

We apologize for this depressing post

The rate of seniors filing for bankruptcy has tripled since 1991. The elderly have little financial cushion in the event of catastrophic health problems, and of course medical costs are rising. And more people are entering retirement age with debt.

More people are living in their cars as homelessness rises in America. “The problem is ‘exploding’ in cities with expensive housing markets, including Los Angeles, Portland and San Francisco, according to Governing magazine.”

Outstanding education debt in the US now exceeds $1.5 trillion (roughly the GDP of Australia), after tripling over the last decade, and more than one million student loan borrowers go into default each year.

The average American works longer hours than a medieval peasant: “Juliet Shore, economist, told the site that during periods of high wages, such as 14th-century England, peasants worked no more than 150 days a year.”

Daily links: Fentanyl and state failure

China is the main source of the insanely potent synthetic opioid fentanyl in the US, which killed more than 27,000 people in the 12 months through November 2017. “The biggest difficulty China faces in opioid control is that such drugs are in enormous demand in the US,” an official of China’s equivalent of the DEA is quoted as saying. The Opium Wars in reverse?

The trade deficit has sliced $457.2 billion off the US economy’s cumulative inflation-adjusted growth, or 14.33%, from the start of the recovery in mid-2009 through the first quarter of 2018, according to last week’s revised GDP figures. But we are told that trade deficits don’t matter.

Britain is probably not going to run out of food in the event of a “no deal” Brexit. Nevertheless, it’s interesting to note that the British government cannot guarantee food security for its people, and seemingly expects the food industry to take all the responsibility for stockpiling goods. Meanwhile, the food industry has absolutely no plans to do this.

A simulation models the release and spread of a moderately lethal and moderately contagious virus. It kills off 150 million people over the course of 20 months, including 15 to 20 million people in the US.

Over 100,000 Russians marched last month in the city of Yekaterinburg to mark the centennial of the slaughter of the Romanov imperial family by rabid Communists.

Duterte publicly destroys more than A$8 million worth of contraband luxury cars in the Philippines: