Sunday Reads…Don’t Shoot The Messenger

Widespread prosperity, it turns out, is incompatible with the American Dream. The only way our economy works is when there are winners and losers. If everyone’s a winner, the whole thing fails. That’s what we learned at the conclusion of our experiment. You weren’t supposed to see that. Now the genie is out of the bottle. For one brief shining moment, everyone had enough money to pay their bills and the financial freedom to choose their own way of life.

And it broke the fucking economy in half.

The authorities are panicking. Corporate chieftains are demanding that their employees return to the way things were, in-person, in-office, full time. The federal government is hiring 87,000 new IRS employees to see about all that money out there. The Federal Reserve is trying to put the toothpaste back into the tube – the fastest pace of interest rate hikes in four decades and the concurrent unwind of their massive balance sheet. Everyone is scrambling to undo the post-pandemic jubilee. It was too much wealth in too many hands. Too much flexibility for too many people. Too many options. Too much economic liberation. “Companies can’t find workers!” the media screams but what they really mean is that companies can’t find workers who will accept the pay they are currently offering. This is a problem, we are told. After decades of stagnating wages, the bottom half of American workers finally found themselves in a position of bargaining power – and the whole system is now imploding because of it. Only took a year or so.

The War on Inflation is the new War on Drugs. In the 1980’s they were willing to sacrifice entire cities and communities to the War on Drugs. A million brothers and sons behind bars, a million children in fatherless homes in service to some nebulous goal of a drug-free society that’s never actually existed at any time in human history. We figured out how to ferment barley to get intoxicated more than 13,000 years ago, which predates the invention of the wheel for god’s sake. The War on Drugs had less of a chance of working than Prohibition did. We went ahead and destroyed countless lives with it anyway.

Now we have a new war.

Today they’re willing to sacrifice the stock market, the bond market, housing values, anything – there’s nothing they’re not willing to do to get it all back under control. Over $10 trillion in wealth wiped out this year, a sacrifice on the part of wealthy Americans in order to ensure a return to normal. You’re hearing the term “normal” a lot these days or normalization. Normal is 2019, where the rich had unlimited options and the not-quite rich had the chance to join them someday by helping to maintain the status quo. The working poor had no options in this world but had lots of obligations. It’s just how things were. This kept the economy humming on an even keel. It was necessary. It was “normal.” It’s what the Federal Reserve is willing to crush the stock market and the real estate market in order to return to. Every time you hear a Federal Reserve official use the word “pain” they are really saying “recession” and when they say “recession”, which they are loathe to do, they are actually referring to people losing their jobs so that wage gains return to a “slower trajectory.” You are being fucked around with, assaulted with the English language and all its inherent trickery. The Greater Good requires a less good circumstance for millions of workers. Too many Chiefs, not enough Indians for the game to run smoothly.