Posted On: Saturday - February 18th 2017 8:13AM MST
In Topics:   Pundits  Global Financial Stupidity
A guy named Charles Hugh Smith writes a great blog that goes by the name of "Of Two Minds". Here is the latest post by him on the Financial Stupidity that is going on, in terms of debt. This guy does a great job and his post here, along with (possibly all of his) others is featured on ZeroHedge. It appears that the "Of Two Minds" blog does not have comments (just as it appears here too so far, har-har!!), so again we refer readers to the zerohedge website specifically for the great commenters - that can't be read on an older browser.
Here is just the part of it, but you must read the whole, fairly simple, post of Charles Hugh Smith to get his point (the Bold is from the original):
The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the "pie" being cheap energy, government revenues and consumption, sales and profits.
Horsetrading over a growing pie is basically fun. There's always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus
Horsetrading over a shrinking pie is not fun. Everybody is shrilly demanding their piece of the pie should either grow or be left untouched; any cuts must come out of someone else's slice.
The key point, from us and Mr. Smith, is that over the last 1/2 century, this expansion of "the pie" has been accomplished by borrowing, not actually increasing the real wealth. A big portion of the dough and filling have been borrowed from neighbors, to keep this analogy going, and they will want to get paid back eventually, but the pies are being eaten. (Mr. Smith uses 70 years, but the first part of that was all real creation of wealth).
Now, Mr. Smith didn't make up the three good graphs that appear with this article, but did do a great job picking these ones. I have lifted them to use in more detailed future posts about financial stupidity. His illustration of the debt problem we are in is a much better summary than I have written in the Global Financial Stupidity Topic Key in the series starting here, but especially in this one, regarding future obligations and the interconnectedness of all this debt.
Mr. Smith again:
The debts, unfunded liabilities, demographics and diminishing pools of income to tap are beyond policy tweaks and minor cuts. Take a look at these charts to grasp the unwelcome realities: sorry, we can't "grow our way out of debt" because the debts and unfunded liabilities are simply too large and expanding at too fast a rate.
ZeroHedge commenters also bring this up a lot: Government and Big Business, often almost one-and-the-same anymore have this idea that expansion must go on; this means expansion of revenues, profits, the amount of consumers or the spending power of consumers or both. (Notice I didn't say expansion of employees - they don't seem to care about that.) You will hear this over and over - "a business must grow, or it will die!" To me that one expression is one of those peak-of-stupidity things like "diversity if a strength!" that I wondered the truth of from the first time I heard it uttered. "Why?, Why is diversity a strength?" Why? Why will a business die if it doesn't continually expand". "Why do you spout bullshit and expect everyone to just believe it?" - that's another one.
I have worked for organizations of wide-ranging size from just myself (as I recall, I had the best boss in that job, come to think of it), 2 - 5 people, 10, 15, 200, 5000, and over 70,000 in just one location. In the smaller companies, I never found that I or anyone thought that we were going to be in financial trouble if we didn't keep growing - no such thing at all came to mind. In the bigger ones, who knew WTF was going on with the big shots? They didn't want to talk
Improvement is great and necessary for keeping competitive, but it doesn't have to come from constant expansion; what you do is increase productivity by constantly learning, changing out equipment or methods, and not being too complacent.
The constant push for expansion by Big Governments and Big Business shows either an ignorance or disregard for the limitations of resources of the planet and the quality of life of your average Joe who is not one of the elites in Big Governments and Big Business. This is coming to a head now due to:
a) The absolute population numbers are really getting up there, and the productivity of mechanical and electronic machines is getting so high that there are not so many place for the average Joe in this world.
b) The increases in population are in the regions of the world and in the sector of each population that are the most uneducated and of lower inherent intelligence. The world of the near future will not have a need for these ones due to (a). The big disparity in fertility between the uneducated/ignorant/stupid and the educated/developed/intelligent is mostly an effect of many years of Government policy put into effect by the supposed smart people of yesteryear. Some of the educated/developed/intelligent (the commies, aka "socialists") crowd really didn't have the smarts required to go change the world properly after all.
c) This is in addition to the Financial Stupidity problem - being in the huge debt-hole just makes things much worse. The grandchildren of these commies and the grandchildren of the innocent (of f__king-up the world) will pay the price for this commie-created stupidity fairly soon.
* BTW, don't confuse this guy with Brandon Smith, also featured a lot on ZeroHedge. Brandon Smith has a good website called Alt-Market which features much of the writing on the Global Financial Stupidity that both ZeroHedge and OfTwoMinds also do. My only one-time dealing with Brandon, however, when writing a comment to correct a small error, resulted in him wiping out the comment and figuratively foaming-out-the-mouth about it. I had praised the article and just told the guy that fixing the obvious error (the Confederate Army did not march on Ft. Sumter, seeing as how it's a coupla miles into the Charleston harbor from the battery) would avoid turning off readers only due to their lack of trust in his literacy.
Anyhow, he's a different guy.