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    My earlier post, Mapping the Road to American Disunion, discussed the apparent high likelihood of increased social and political unrest in America in the coming years – a process which, with the ongoing partisan stand-off in Washington, might well be under way. This was based on the work of Peter Turchin and his field cliodynamics....
  • […] and bust cycles, represent the effects of the population cycle as described by Peter Turchin (see here for a good description of the process). Population growth sows the seeds of its undoing, by […]

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  • You claim that our current govt will provide stimulus unlike in the 1930s. This is wrong as both Hoover and FDR tried the Keynesian approach which did not help at all. We are greater a Greater Deflationary Depression soon and there is nothing that can stop it.

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  • Great post. I think you come closer to the real problem then 99% of the pundits out there. However, robotics is not even the root of the problem. The problem is that the technological advances have created an eco-system that enables the willing and capable to add more value to society all the while stripping away the value added of the lower end of the bell curve. As to your prediction about a recession, I don’t think that will come any time soon. That is because of the following

    1. When society as a whole progresses economically, this enable even the lower end work to charge more for their goods. A perfect example is a barber. Today’s hair dresser earns a great deal more for an hours of work(by my accounts at least $20-$40/hour before shop expense) in spite of the fact that the productivity is similar to, say, a couple of centuries ago.

    2. We are living in a society of entitlements. Today, if you are not earning anything, unlike a couple of century ago, you have a roof over your head(section 8 housing), good food to eat( food stamps), a nice TV, cell phone etc). Most would even have public transport or the use of a car. I expect this sorts of “rights” of the poor to continue to expand going forward as they have all the voting power.

    3. Being enterprising that we are, someone will find novel uses that will employ the masses. There are societies much further down this road than United States. Think of India, with a billion mostly left end of the bell curve people and a very small intellectual elite. Somehow, they manage to find employment for most of the population.

    It does not mean that what you said won’t be a problem, it is just going to take much longer for any sort of crisis to emerge.

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    “An accountant or engineer who rode the bus to work, in spite of the inconvenience, would be an odd duck. A professional who bikes or walks to work would be considered crazy in most parts of the US”

    Ha! I love this comment. I do both of these things and I’m not exactly located in NYC or the Left coast. You are quite right, you have to not care about professional advancement or raises, which I don’t (I am not very money motivated, which always vexes my corporate superiors). I would also suggest never using anything other than the crudest most child-like vocabulary in business meetings, and never drawing large complicated renditions of your own company’s cannibalistic/monopolistic tendencies on white boards. Believe me, you’ll be glad you didn’t.

    Also in response to Randall and his ‘wrong college major’ comment, I say Bah, within reason. I took a biological anthropology degree and talked myself into major IT companies doing development. If you can do a job, demonstrate that skill, and you understand how to appropriately signal those things to a prospective employer, then your major is _almost_ entirely irrelevant. Heck, a lot of the best IT start-ups are snatching top programmers while they are still in High School. Being great at something useful never hurt anyone.

    ~S

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  • @Anonymous
    "This, is, by the way, why people calling for ways to reverse sub-replacement fertility are fundamentally wrong-headed. Unless you’re going to open up new frontiers for colonization, you don’t want fertility rates to get too high, because population growth without geographic growth inevitably leads to falling standards of living for the people and more strife. But such is the problem with people who can’t see beyond their own small little academic worlds."

    You yourself have exhorted smart liberals to have more children!

    Look I worry about sub-replacement fertility, but that doesn't mean I want to return to tfrs of 5 children per woman. I just think a country like, say, Italy, would be better off if its tfr for native Italian women were 1.8-2.1 as opposed to 1.2. I think most people who worry about sub-replacement fertility feel the same.

    subreplacement is only a temporary problem. any change is disruptive and will cause economic contraction ceteris paribus. but if the pain is endured, smaller populations will be richer eventually.

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  • @Jorge Videla
    jayman, sorry for the misspellings and incomplete sentence. i juast type looking at th keyboard and press post.

    you're an infantile leftist.

    class is so much less obtrusive in scandinavia and japan precisely because these countries are so homogeneous. class is ignored in les etats-unis merdeux because race pops up to obscure it.

    when the state vets all births there is class is no longer viable.

    THE DEEP reason why population control has never caught on is that any govt powerful enough to carry it out, like that iof the prc, wopuld be more powerful than CAPITAL could tolerate.

    grow up. there is an AUFHEBUNG between the far left and far right. it's eugenics.

    Look, no personal attacks. Last warning before moderation.

    when the state vets all births there is class is no longer viable.

    Fortunately, that’s never going to happen. Nor should it.

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  • @Anonymous
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time."

    indeed. if the only work one can do is demeaning and unnecessary, not real work at all, which has become the lot of at least half the population it would be better to live like ted kaczynski. his manifesto makes many of the points your post has made. (he was a terrorist, but he wasn't crazy at all. he is the most famous living Cynic.)

    the poor in the developed world aren't exploited; they are irrelevant, but middle class engineers are exploited. the expropriation of surplus value is real. dividend recapitalization is an egregious example practiced by lbo funds.

    the only solution is eugenics and forced sterilizations. when the useless can't be said to be inferior, there will be no shame in being idle.

    jayman, sorry for the misspellings and incomplete sentence. i juast type looking at th keyboard and press post.

    you’re an infantile leftist.

    class is so much less obtrusive in scandinavia and japan precisely because these countries are so homogeneous. class is ignored in les etats-unis merdeux because race pops up to obscure it.

    when the state vets all births there is class is no longer viable.

    THE DEEP reason why population control has never caught on is that any govt powerful enough to carry it out, like that iof the prc, wopuld be more powerful than CAPITAL could tolerate.

    grow up. there is an AUFHEBUNG between the far left and far right. it’s eugenics.

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    • Replies: @JayMan
    @Jorge Videla:

    Look, no personal attacks. Last warning before moderation.


    when the state vets all births there is class is no longer viable.
     
    Fortunately, that's never going to happen. Nor should it.
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  • @Anonymous
    "This, is, by the way, why people calling for ways to reverse sub-replacement fertility are fundamentally wrong-headed. Unless you’re going to open up new frontiers for colonization, you don’t want fertility rates to get too high, because population growth without geographic growth inevitably leads to falling standards of living for the people and more strife. But such is the problem with people who can’t see beyond their own small little academic worlds."

    You yourself have exhorted smart liberals to have more children!

    Look I worry about sub-replacement fertility, but that doesn't mean I want to return to tfrs of 5 children per woman. I just think a country like, say, Italy, would be better off if its tfr for native Italian women were 1.8-2.1 as opposed to 1.2. I think most people who worry about sub-replacement fertility feel the same.

    @MontU:

    You yourself have exhorted smart liberals to have more children!

    I have. Concern about eugenic fertility ≠ concern about sub-replacement fertility.

    Look I worry about sub-replacement fertility, but that doesn’t mean I want to return to tfrs of 5 children per woman. I just think a country like, say, Italy, would be better off if its tfr for native Italian women were 1.8-2.1 as opposed to 1.2.

    Yes, Southern and Eastern Europe may actually be wise to raise their fertility rates. This may not be all that easy, however.

    I think most people who worry about sub-replacement fertility feel the same.

    I don’t know about that. Many some of the wiser thinkers on the matter do. But some of the others who discover the concept of sub-replacement fertility but not the concept of HBD worry about fertility rates in and of themselves, when that’s ultimately secondary to the main issue for most people, especially for countries like the U.S.

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  • Anonymous • Disclaimer says:

    “This, is, by the way, why people calling for ways to reverse sub-replacement fertility are fundamentally wrong-headed. Unless you’re going to open up new frontiers for colonization, you don’t want fertility rates to get too high, because population growth without geographic growth inevitably leads to falling standards of living for the people and more strife. But such is the problem with people who can’t see beyond their own small little academic worlds.”

    You yourself have exhorted smart liberals to have more children!

    Look I worry about sub-replacement fertility, but that doesn’t mean I want to return to tfrs of 5 children per woman. I just think a country like, say, Italy, would be better off if its tfr for native Italian women were 1.8-2.1 as opposed to 1.2. I think most people who worry about sub-replacement fertility feel the same.

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    • Replies: @JayMan
    @MontU:

    You yourself have exhorted smart liberals to have more children!
     
    I have. Concern about eugenic fertility ≠ concern about sub-replacement fertility.

    Look I worry about sub-replacement fertility, but that doesn’t mean I want to return to tfrs of 5 children per woman. I just think a country like, say, Italy, would be better off if its tfr for native Italian women were 1.8-2.1 as opposed to 1.2.
     
    Yes, Southern and Eastern Europe may actually be wise to raise their fertility rates. This may not be all that easy, however.

    I think most people who worry about sub-replacement fertility feel the same.
     
    I don't know about that. Many some of the wiser thinkers on the matter do. But some of the others who discover the concept of sub-replacement fertility but not the concept of HBD worry about fertility rates in and of themselves, when that's ultimately secondary to the main issue for most people, especially for countries like the U.S.
    , @Jorge Videla
    subreplacement is only a temporary problem. any change is disruptive and will cause economic contraction ceteris paribus. but if the pain is endured, smaller populations will be richer eventually.
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  • […] A Second Great Depression? – from jayman. […]

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  • @ curious observer:

    I read an interesting story about the decline of the streetcar [tram] systems in the US and the subsequent transition to a car-centric society:

    http://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy

    I don’t believe this occurred in quite the same way here in the UK. However in the early 1920s the UK had more than 200 urban electric tram systems in operation. By the early 1960s following a large-scale programme of closures as a result of competition from buses and cars, there was only one tram system still surviving. [Since the early 1990s five tram systems have been reopened in large British cities in an attempt to improve public transport and tackle congestion on roads].
    Most continental European countries didn’t follow the British model and kept their electric tram systems in operation, and consequently also didn’t suffer quite the same problems of suburban sprawl and road building destroying large areas of countryside. People could live in closer proximity to urban centres where they worked and commute shorter distances using efficient public transport systems.

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    Sorry, Jayman. I didn’t originally mean to rant at such length, but when I get going, it’s hard for me to stop.

    A final point I’d like to make about the issue facing workers in the US, especially in the working and lower-middle classes, has to do with a pet theory of mine, which is that economies are geared towards different levels of consumption, and this affects the ability of individuals to change their level of consumption, even when they suffer severe consequences from not doing so.

    By analogy, if you drive a car with a standard transmission, there are different gears you have to shift to in order to change speeds. If you’re in first gear, you can’t go 30mph. The rpm would simply be too high. By the same token, If you’re in 5th gear, you can’t drop your speed down to 30mph. The rpm would be too low and the engine would putter out. You can change speeds within a certain range, but to move outside that range you have to shift gears.

    I would say that different economies are set in different “gears” and individual consumption is analogous to the particular speed one can drive in a particular gear. Now, if your economy is geared towards a moderate workload and moderate consumption, it’s easiest for to have a lifestyle that falls somewhere near that medium. A European country like Germany or France would be a good example. Cities are typically designed to be walkable or bikeable, and mass transit is widely accessible. Since space comes at a higher premium than in the US, housing is built more compact to begin with. However, people in these countries typically work shorter hours than in the US. So whatever inconveniences they suffer from their more frugal lifestyle, they can more easily adjust to, because they have more free time. One can easily get by without an automobile in these countries, without too much added inconvenience. On the other hand, people who want to go all out and live the American lifestyle in Europe pay much higher marginal costs (parking, gas taxes, etc.) because the societies in which they live aren’t set up for that sort of lifestyle.

    In the US, however, the economy is not really set up for people with a lower-consumption lifestyle. While it’s not impossible to live without a car, for example, it is far, far more inconvenient than in Europe. So for an individual, the trade-offs of being more frugal in that regard, in terms of time, inconvenience, and personal risk go up compared to the case for an individual in Europe. So it’s much harder to change your level of consumption below a certain point. Not impossible, but very difficult.

    The much thornier issue is how economies being stuck in different “gears” affects social expectations. People in certain professions are expected to maintain a certain type of lifestyle, essentially as a status marker. An accountant or engineer who rode the bus to work, in spite of the inconvenience, would be an odd duck. A professional who bikes or walks to work would be considered crazy in most parts of the US. This is poisonous to career advancement. Thus, social norms also contribute to keeping people stuck in a “high-consumption” mode.

    Government policies, such as urban planning based around walkable cities, and more comprehensive mass transit, would make it significantly easier to switch to a low-consumption lifestyle, by making it more convenient to give up the auto. In turn, drastically reducing one of the major marginal costs of working (transportation) would make working more cost-effective for the average person to have a job in the first place. This would be a step towards both increasing economic mobility, and would have the added bonus of being better for the environment. Unfortunately, I think such policies are unlikely to be widely adopted in the US. They really only seem to be embraced by high social capital countries like Germany, France, and the Scandinavian countries.

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  • Following on from what I post a few days back:
    (On BBC website today)

    “What does China own in Britain?”

    http://www.bbc.co.uk/news/uk-24473933

    “Re-balancing and the re-industrialisation of Britain”

    http://www.bbc.co.uk/news/business-24512779

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  • @ curious observer:

    You raised some excellent points. There are huge financial barriers faced by the average university graduate or unemployed person in today’s economy [applies equally to USA and UK] when wishing to enter the workforce. For example:
    Here in the UK, housing rental prices are at an all-time high: http://www.telegraph.co.uk/finance/personalfinance/houseprices/10179754/UK-rental-prices-hit-record-high-survey-shows.html
    Running a car and driving to work keeps getting more and more expensive: http://www.dailymail.co.uk/news/article-2148674/Cost-motoring-soars-6-000-year-time-fuel-prices-roof.html
    Commuting to work by public transport hardly cheap either: http://www.independent.co.uk/news/uk/home-news/england-has-the-priciest-train-tickets-in-europe-8434671.html
    Utility bills keep rising way above the rate of inflation: http://www.telegraph.co.uk/finance/newsbysector/energy/10130970/UK-electricity-prices-almost-twice-as-expensive-as-Germany-within-three-years.html

    A unemployed person living a life on state benefits here in the UK gets: a roof over their head; food on their plate; their bills paid; to go to bed at whatever time they want; to get up at whatever time they want; and to spend their day doing whatever they want [within the constraints of their limited budget]. No early starts; no long and stressful morning commutes; no job stress; no office politics; no expensive car to run; and plenty of free time.
    While I personally couldn’t survive on such a small income, the idea of such an easy life can sometimes be quite alluring [especially when the alarm clock goes off at 6:30am on a winter's morning].

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    Randall,

    “Wrong college major. If you are going to go to college then major in something that will start at much higher than $38k per year.”

    The majority of recent college grads make less than I do. I chose a fairly practical major (accounting) for a fellow with an above-average but not anywhere near outstanding IQ (probably around 115, as a rough estimate). Sure, there are some very specialized majors that make a lot more, but most of the people who do them have genius-level IQ and work their bums off through school and their working years. I went to school with lots of smart, hardworking people, and maybe one of them got a job that, starting out, paid more than $60K a year. He had a 1600 on the SAT, and still studied 30-40 hours a week outside of class. If he’s happy in his job, then more power to him, but the idea that I, (or the vast majority of people in this country), could simply choose to do his major (electric engineering, with a focus on medical applications), is pretty silly. Moreover, even if it was possible, and a bunch of people took your advice, then supply and demand would kick in and drive down wages in those fields, so then they wouldn’t be such a great deal. In any case, haven’t STEM salaries been stagnant for a decade? The real money, as Half Sigma has said, is really in value transference, but I’m neither clever enough, nor (I would like to think) sociopathic enough to do that.

    “I am struck by the need to be able to live in low cost housing in a safe neighborhood.”

    I’ll admit that, originally being from the midwest, I have this weird sense of entitlement to not being mugged when leaving my residence. In any case, as I said in my comment, the low-cost housing was also far away from where I work, so your next suggestion (drop the car), would be even more more impracticable if I had thrown caution to the wind and settled there. That suggestion might work in a handful of American cities, and probably in most European cities, but the simple fact is that urban planning in most of the US is predicated on automobile ownership, so most cities are not all that walkable, nor that friendly to bikers. Moreover, this trend is self-reinforcing through cultural norms. If I biked to work, besides smelling like armpit when I got there (I’m in the deep south, and it gets hot and muggy here), I’d be the weird, hippie (lol at that) guy, and that would probably impede my advancement at my job. So cultural norms in the US are also a barrier to living frugally.

    As for getting a roommate: That’s something I’m looking into for when my current lease expires. Unfortunately, moving to a new city tends to make that sort of thing harder, since one must find someone he trusts to:
    1. Not steal from him.
    2. Not trash the apartment and/or walk out on the lease
    3. Not run up the utility bill to ungodly levels.
    That social capital, it’s not just a nice thing to have, it’s also got a lot of practical benefits. Too bad social atomization in the US has left us with a dearth of that sort of thing.

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    My reaction to Curious Observer’s story: Wrong college major. If you are going to go to college then major in something that will start at much higher than $38k per year.Given the right major you can start at over $100k per year and go up from there.

    Being poor sucks in a big way. If you are smart enough to learn skills that pay way better then you are being negligent if you do not pursue getting those skills.

    As for the cost of living: I am struck by the need to be able to live in low cost housing in a safe neighborhood. The car cost could be avoided if you could walk or bike to work. The housing cost could be reduced by sharing housing.

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  • @Curious Observer
    Great Post! Although I'm a little late to the party, I'd like to add my 2 cents about another issue facing American workers: The high marginal cost of being employed.

    A personal anecdote: After graduating from college over a year and a half ago, I was, for almost six months, unemployed and living with my parents. Basically, a NEET. However, I did help out at home, by minding my younger siblings, fixing things on my parents' property that need maintenance, weeding the garden, cleaning house and running errands, so I wasn't a complete leech. I took up very little space, ate pretty frugally, and maybe added extra household expenses of about $300/month. This ended after I found a job with a company in another city. What has struck me about my situation since then is how much it costs simply to have a job these days. Now, my case isn't perfectly representative, since I had to change cities to find employment, but that is a situation which still applies to many workers, especially in the younger generation.

    First of all, I had to find an apartment in my new city. There is low-cost housing, unfortunately it's all in the "bad part" of town. It's also pretty far from where I work. The cheapest place I could find costs $7,000 a year before utilities, which are about $1,000 a year. Utilities would be higher, but I'm the kind of guy who lets the temp get up to 85 Fahrenheit in the summer and down to 60 in the winter, while taking 2-minute showers and rarely turning on the lights.

    Secondly, I had to find a car, since public transit in this city (like most American cities) is not very well-funded, and unreliable. I bought a used Honda Civic for about $12K. My car loan payments, with interest, amount to $4,300 a year for the next three years. In addition, I have to pay for collision (because of my car loan) and liability, of course, so my total insurance bill comes to about $2,200 a year (though that should drop in a year and a half when I turn twenty-five). I rarely drive anywhere except my job, and usually plan my trips to the grocery store so that they can be made on a beeline from work to home. Regardless, gasoline plus maintenance comes to about $1,200 a year.

    So overall, the extra cost that I have to incur, simply to have a job, is, per annum, $7000(housing) + $1000(utilities) + $4,300(car payments) + $2,200(insurance) + $1,200(gas and maintenance) - $3,600 (the household costs my parents saved when I moved out, counterbalanced on my end by not having to do as many chores), for a marginal cost of working of a little more than $12,000. I deliberately included only costs that I incurred specifically so that I can have a job in the field I trained for, since others (like food and healthcare) I have to pay for regardless of employment. Subtracted from an after-tax income of about $28K/year, out of a gross of $38K, I make a net income after taxes of $16k/year. Divided by roughly 2,000 hours a year (40 hours a week times fifty weeks, ignoring commute of about 40 minutes a day, and unpaid overtime), I make about $8/hour after my costs of employment. So I'm not really much better off, currently, than when I was a NEET.

    The upshot of all this is not to complain about my life. I recognize that, compared to most Americans, my situation is pretty good. Rather, it's to show the large disincentives that exist to working, for many Americans. My cost total didn't even include the cost of my education, since I got scholarships for most of it, but if I didn't have scholarships, the cost of me having the job I have now would be even higher. While I expect the situation to improve in the future (more experience = more money, plus the car loan will eventually be paid off and I can drop the collision insurance), somebody whose economic circumstances are very shaky to begin with and for whom the payoffs of education are uncertain could very easily be convinced not to bother with it by these facts.

    Precisely!

    Very well said, and excellent comment! Indeed, there are huge financial disincentives to work, as you excellently explain. In fact, I’m going to tweet your comment.

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    Great Post! Although I’m a little late to the party, I’d like to add my 2 cents about another issue facing American workers: The high marginal cost of being employed.

    A personal anecdote: After graduating from college over a year and a half ago, I was, for almost six months, unemployed and living with my parents. Basically, a NEET. However, I did help out at home, by minding my younger siblings, fixing things on my parents’ property that need maintenance, weeding the garden, cleaning house and running errands, so I wasn’t a complete leech. I took up very little space, ate pretty frugally, and maybe added extra household expenses of about $300/month. This ended after I found a job with a company in another city. What has struck me about my situation since then is how much it costs simply to have a job these days. Now, my case isn’t perfectly representative, since I had to change cities to find employment, but that is a situation which still applies to many workers, especially in the younger generation.

    First of all, I had to find an apartment in my new city. There is low-cost housing, unfortunately it’s all in the “bad part” of town. It’s also pretty far from where I work. The cheapest place I could find costs $7,000 a year before utilities, which are about $1,000 a year. Utilities would be higher, but I’m the kind of guy who lets the temp get up to 85 Fahrenheit in the summer and down to 60 in the winter, while taking 2-minute showers and rarely turning on the lights.

    Secondly, I had to find a car, since public transit in this city (like most American cities) is not very well-funded, and unreliable. I bought a used Honda Civic for about $12K. My car loan payments, with interest, amount to $4,300 a year for the next three years. In addition, I have to pay for collision (because of my car loan) and liability, of course, so my total insurance bill comes to about $2,200 a year (though that should drop in a year and a half when I turn twenty-five). I rarely drive anywhere except my job, and usually plan my trips to the grocery store so that they can be made on a beeline from work to home. Regardless, gasoline plus maintenance comes to about $1,200 a year.

    So overall, the extra cost that I have to incur, simply to have a job, is, per annum, $7000(housing) + $1000(utilities) + $4,300(car payments) + $2,200(insurance) + $1,200(gas and maintenance) – $3,600 (the household costs my parents saved when I moved out, counterbalanced on my end by not having to do as many chores), for a marginal cost of working of a little more than $12,000. I deliberately included only costs that I incurred specifically so that I can have a job in the field I trained for, since others (like food and healthcare) I have to pay for regardless of employment. Subtracted from an after-tax income of about $28K/year, out of a gross of $38K, I make a net income after taxes of $16k/year. Divided by roughly 2,000 hours a year (40 hours a week times fifty weeks, ignoring commute of about 40 minutes a day, and unpaid overtime), I make about $8/hour after my costs of employment. So I’m not really much better off, currently, than when I was a NEET.

    The upshot of all this is not to complain about my life. I recognize that, compared to most Americans, my situation is pretty good. Rather, it’s to show the large disincentives that exist to working, for many Americans. My cost total didn’t even include the cost of my education, since I got scholarships for most of it, but if I didn’t have scholarships, the cost of me having the job I have now would be even higher. While I expect the situation to improve in the future (more experience = more money, plus the car loan will eventually be paid off and I can drop the collision insurance), somebody whose economic circumstances are very shaky to begin with and for whom the payoffs of education are uncertain could very easily be convinced not to bother with it by these facts.

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    • Replies: @JayMan
    @Curious Observer:

    Precisely!

    Very well said, and excellent comment! Indeed, there are huge financial disincentives to work, as you excellently explain. In fact, I'm going to tweet your comment.

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  • It does seem to be a fact that nations without a dominant tribe tend to be in civil war, breaking up or getting subdued by other nations. For America the dominant tribe until the 1960s was the WASPs. Today, no group is strong enough to take on that role. As people get redundant in the work force their identities no doubt switch to other areas, like race and ethnicity. It’s hard not to think that people in some states will find secession or similar policies towards autonomy appealing. This has already happened in Italy as high IQ regions in the north have lost interest in financin low IQ regions in the south and gained economic autonomy. I guess places like the Dakotas and thereabouts could be feeling the same way.

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    The idea that your average suburbanite can actually grow a fair amount of food on a standard home lot implies to me that many folks can cut their food budget and dependence on food that’s being shipped via oil, while still working regular jobs if they have one, without moving.

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  • @Tregon
    One of the defining conditions of our day is rising economic inequality. The wealthiest Americans are pulling away from the rest of us. The staggering scale of this inequality... What’s the reason for this? There are two overarching reasons, those are labor oversupply (which stems from immigration and natural population increase) and labor obsolescence (which stems from automation and globalization).

    I don't think those are reasons: those are mechanisms whereby the elite enriches itself and impoverishes the historic American nation, i.e. European whites. The reasons for the growing inequality are the greed of the elite and its hatred for the historic American nation. The elite is greedy and hate-filled for genetic and cultural reasons. To understand what is happening in America, you have to look at Europe and European history. Europe is undergoing the same process for the same reasons.

    And while American and European whites are being impoverished and reducing the number of children they have, they're funding the population growth of non-whites, and particularly non-whites who are not suited to liberal democracies.

    Regardless of the role the elite play, how do you think it happens? As I’ve explain in this post.

    Yes and explained v. well. But there was no point in saying “Yay 4 Jay!” You can take that as read.

    Regardless of the role the elite play…

    IOW, regardless of the role the HBD plays. This is a HBD blog. Writing about the effects of HBD without mentioning the HBD is an interesting exercise. But then one other effect of the HBD in question is fear of mentioning the HBD in question. It’s perfectly rational fear too: that HBD would like to take away the First Amendment, but for the time being it has to be satisfied with destroying reputations and careers. Elsewhere in the world, it has already got the thought-crime laws it would like to enact in the US.

    You could also have written about the looting of Russia after communism. The “reasons” for the looting were asset-stripping, crooked auctions and collaboration between ex-communist officials in Russia and economists in the U.S. But behind those reasons lay, once again, HBD. And it was the same HBD:

    http://isteve.blogspot.co.uk/2013/06/marc-rich.html

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  • @Simon in London
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time"

    I don't agree. This seems barely more sensible than the 'guns & ammo' guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world's breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don't think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

    The problem wouldn’t be a shortage of food so much as a shortage of money, on the individual’s part.

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  • “In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time”

    I don’t agree. This seems barely more sensible than the ‘guns & ammo’ guys. Consider this:
    a) Food can be taken into cities and distributed cheaply. Rural areas are highly dependant on gasoline, especially in the USA. Petrol supplies to rural areas are far more vulneable than food supplies to urban areas.
    b) The USA is the world’s breadbasket, a massive exporter. Before the USA ceased to produce and distribute enough food to feed itself, much of the rest of the world, especially Africa, would be literally starving and dying.

    I agree that the US (and much of the ROW) is in a second Great Depression, and will be there a long time. But that does not mean significant food shortages. Want food? Go to Walmart, buy the cheap stuff. Even working a low paid service job will generate money for food much more efficiently than growing your own. If you want to grow your own food as a hobby, great. But don’t think that moving to the countryside and starting a greenhouse is a survival-maximising strategy.

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    • Replies: @JayMan
    The problem wouldn't be a shortage of food so much as a shortage of money, on the individual's part.
    , @EvolutionistX
    The idea that your average suburbanite can actually grow a fair amount of food on a standard home lot implies to me that many folks can cut their food budget and dependence on food that's being shipped via oil, while still working regular jobs if they have one, without moving.
    , @Curious Observer
    Great Post! Although I'm a little late to the party, I'd like to add my 2 cents about another issue facing American workers: The high marginal cost of being employed.

    A personal anecdote: After graduating from college over a year and a half ago, I was, for almost six months, unemployed and living with my parents. Basically, a NEET. However, I did help out at home, by minding my younger siblings, fixing things on my parents' property that need maintenance, weeding the garden, cleaning house and running errands, so I wasn't a complete leech. I took up very little space, ate pretty frugally, and maybe added extra household expenses of about $300/month. This ended after I found a job with a company in another city. What has struck me about my situation since then is how much it costs simply to have a job these days. Now, my case isn't perfectly representative, since I had to change cities to find employment, but that is a situation which still applies to many workers, especially in the younger generation.

    First of all, I had to find an apartment in my new city. There is low-cost housing, unfortunately it's all in the "bad part" of town. It's also pretty far from where I work. The cheapest place I could find costs $7,000 a year before utilities, which are about $1,000 a year. Utilities would be higher, but I'm the kind of guy who lets the temp get up to 85 Fahrenheit in the summer and down to 60 in the winter, while taking 2-minute showers and rarely turning on the lights.

    Secondly, I had to find a car, since public transit in this city (like most American cities) is not very well-funded, and unreliable. I bought a used Honda Civic for about $12K. My car loan payments, with interest, amount to $4,300 a year for the next three years. In addition, I have to pay for collision (because of my car loan) and liability, of course, so my total insurance bill comes to about $2,200 a year (though that should drop in a year and a half when I turn twenty-five). I rarely drive anywhere except my job, and usually plan my trips to the grocery store so that they can be made on a beeline from work to home. Regardless, gasoline plus maintenance comes to about $1,200 a year.

    So overall, the extra cost that I have to incur, simply to have a job, is, per annum, $7000(housing) + $1000(utilities) + $4,300(car payments) + $2,200(insurance) + $1,200(gas and maintenance) - $3,600 (the household costs my parents saved when I moved out, counterbalanced on my end by not having to do as many chores), for a marginal cost of working of a little more than $12,000. I deliberately included only costs that I incurred specifically so that I can have a job in the field I trained for, since others (like food and healthcare) I have to pay for regardless of employment. Subtracted from an after-tax income of about $28K/year, out of a gross of $38K, I make a net income after taxes of $16k/year. Divided by roughly 2,000 hours a year (40 hours a week times fifty weeks, ignoring commute of about 40 minutes a day, and unpaid overtime), I make about $8/hour after my costs of employment. So I'm not really much better off, currently, than when I was a NEET.

    The upshot of all this is not to complain about my life. I recognize that, compared to most Americans, my situation is pretty good. Rather, it's to show the large disincentives that exist to working, for many Americans. My cost total didn't even include the cost of my education, since I got scholarships for most of it, but if I didn't have scholarships, the cost of me having the job I have now would be even higher. While I expect the situation to improve in the future (more experience = more money, plus the car loan will eventually be paid off and I can drop the collision insurance), somebody whose economic circumstances are very shaky to begin with and for whom the payoffs of education are uncertain could very easily be convinced not to bother with it by these facts.

    , @Randall Parker
    My reaction to Curious Observer's story: Wrong college major. If you are going to go to college then major in something that will start at much higher than $38k per year.Given the right major you can start at over $100k per year and go up from there.

    Being poor sucks in a big way. If you are smart enough to learn skills that pay way better then you are being negligent if you do not pursue getting those skills.

    As for the cost of living: I am struck by the need to be able to live in low cost housing in a safe neighborhood. The car cost could be avoided if you could walk or bike to work. The housing cost could be reduced by sharing housing.

    , @Curious Observer
    Randall,

    "Wrong college major. If you are going to go to college then major in something that will start at much higher than $38k per year."

    The majority of recent college grads make less than I do. I chose a fairly practical major (accounting) for a fellow with an above-average but not anywhere near outstanding IQ (probably around 115, as a rough estimate). Sure, there are some very specialized majors that make a lot more, but most of the people who do them have genius-level IQ and work their bums off through school and their working years. I went to school with lots of smart, hardworking people, and maybe one of them got a job that, starting out, paid more than $60K a year. He had a 1600 on the SAT, and still studied 30-40 hours a week outside of class. If he's happy in his job, then more power to him, but the idea that I, (or the vast majority of people in this country), could simply choose to do his major (electric engineering, with a focus on medical applications), is pretty silly. Moreover, even if it was possible, and a bunch of people took your advice, then supply and demand would kick in and drive down wages in those fields, so then they wouldn't be such a great deal. In any case, haven't STEM salaries been stagnant for a decade? The real money, as Half Sigma has said, is really in value transference, but I'm neither clever enough, nor (I would like to think) sociopathic enough to do that.

    "I am struck by the need to be able to live in low cost housing in a safe neighborhood."

    I'll admit that, originally being from the midwest, I have this weird sense of entitlement to not being mugged when leaving my residence. In any case, as I said in my comment, the low-cost housing was also far away from where I work, so your next suggestion (drop the car), would be even more more impracticable if I had thrown caution to the wind and settled there. That suggestion might work in a handful of American cities, and probably in most European cities, but the simple fact is that urban planning in most of the US is predicated on automobile ownership, so most cities are not all that walkable, nor that friendly to bikers. Moreover, this trend is self-reinforcing through cultural norms. If I biked to work, besides smelling like armpit when I got there (I'm in the deep south, and it gets hot and muggy here), I'd be the weird, hippie (lol at that) guy, and that would probably impede my advancement at my job. So cultural norms in the US are also a barrier to living frugally.

    As for getting a roommate: That's something I'm looking into for when my current lease expires. Unfortunately, moving to a new city tends to make that sort of thing harder, since one must find someone he trusts to:
    1. Not steal from him.
    2. Not trash the apartment and/or walk out on the lease
    3. Not run up the utility bill to ungodly levels.
    That social capital, it's not just a nice thing to have, it's also got a lot of practical benefits. Too bad social atomization in the US has left us with a dearth of that sort of thing.

    , @Curious Observer
    Sorry, Jayman. I didn't originally mean to rant at such length, but when I get going, it's hard for me to stop.

    A final point I'd like to make about the issue facing workers in the US, especially in the working and lower-middle classes, has to do with a pet theory of mine, which is that economies are geared towards different levels of consumption, and this affects the ability of individuals to change their level of consumption, even when they suffer severe consequences from not doing so.

    By analogy, if you drive a car with a standard transmission, there are different gears you have to shift to in order to change speeds. If you're in first gear, you can't go 30mph. The rpm would simply be too high. By the same token, If you're in 5th gear, you can't drop your speed down to 30mph. The rpm would be too low and the engine would putter out. You can change speeds within a certain range, but to move outside that range you have to shift gears.

    I would say that different economies are set in different "gears" and individual consumption is analogous to the particular speed one can drive in a particular gear. Now, if your economy is geared towards a moderate workload and moderate consumption, it's easiest for to have a lifestyle that falls somewhere near that medium. A European country like Germany or France would be a good example. Cities are typically designed to be walkable or bikeable, and mass transit is widely accessible. Since space comes at a higher premium than in the US, housing is built more compact to begin with. However, people in these countries typically work shorter hours than in the US. So whatever inconveniences they suffer from their more frugal lifestyle, they can more easily adjust to, because they have more free time. One can easily get by without an automobile in these countries, without too much added inconvenience. On the other hand, people who want to go all out and live the American lifestyle in Europe pay much higher marginal costs (parking, gas taxes, etc.) because the societies in which they live aren't set up for that sort of lifestyle.

    In the US, however, the economy is not really set up for people with a lower-consumption lifestyle. While it's not impossible to live without a car, for example, it is far, far more inconvenient than in Europe. So for an individual, the trade-offs of being more frugal in that regard, in terms of time, inconvenience, and personal risk go up compared to the case for an individual in Europe. So it's much harder to change your level of consumption below a certain point. Not impossible, but very difficult.

    The much thornier issue is how economies being stuck in different "gears" affects social expectations. People in certain professions are expected to maintain a certain type of lifestyle, essentially as a status marker. An accountant or engineer who rode the bus to work, in spite of the inconvenience, would be an odd duck. A professional who bikes or walks to work would be considered crazy in most parts of the US. This is poisonous to career advancement. Thus, social norms also contribute to keeping people stuck in a "high-consumption" mode.

    Government policies, such as urban planning based around walkable cities, and more comprehensive mass transit, would make it significantly easier to switch to a low-consumption lifestyle, by making it more convenient to give up the auto. In turn, drastically reducing one of the major marginal costs of working (transportation) would make working more cost-effective for the average person to have a job in the first place. This would be a step towards both increasing economic mobility, and would have the added bonus of being better for the environment. Unfortunately, I think such policies are unlikely to be widely adopted in the US. They really only seem to be embraced by high social capital countries like Germany, France, and the Scandinavian countries.

    , @Sisyphean
    "An accountant or engineer who rode the bus to work, in spite of the inconvenience, would be an odd duck. A professional who bikes or walks to work would be considered crazy in most parts of the US"

    Ha! I love this comment. I do both of these things and I'm not exactly located in NYC or the Left coast. You are quite right, you have to not care about professional advancement or raises, which I don't (I am not very money motivated, which always vexes my corporate superiors). I would also suggest never using anything other than the crudest most child-like vocabulary in business meetings, and never drawing large complicated renditions of your own company's cannibalistic/monopolistic tendencies on white boards. Believe me, you'll be glad you didn't.

    Also in response to Randall and his 'wrong college major' comment, I say Bah, within reason. I took a biological anthropology degree and talked myself into major IT companies doing development. If you can do a job, demonstrate that skill, and you understand how to appropriately signal those things to a prospective employer, then your major is _almost_ entirely irrelevant. Heck, a lot of the best IT start-ups are snatching top programmers while they are still in High School. Being great at something useful never hurt anyone.

    ~S

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  • @Sisyphean
    You are absolutely correct about automation, I'm reminded of Kurt Vonnegut's 'Player Piano'. In my mind the greatest folly of our age is the very idea that technology itself will cure each and every ill that besets the human species. People starving in the third world? Why, we'll just develop new ways to increase food so those people can eat to their heart's content and make even more children. You used to build cars with your hands, well now you can use those hands to knit custom scarves for rich ladies on Etsy! And If you've got a vice we've got an app to exploit it! Only good can come of it of course and If you don't agree you're an ignorant luddite. It speaks to a society led by those with great heads for numbers and mechanical solutions but little understanding of how actual people live, work, and love.

    There isn't much love around the HBD sphere for Jared Diamond but I enjoyed his Collapse immensely. This is what we do. As a species we seem to sow the seeds of our own destruction so easily and thoughtlessly it would be a joke if it were not so tragic.

    ~S

    @bob but what do those people do when they can no longer shuffle paper? The art world is already awash in boring 2D painters, angel sculptors, and flower/sunset photographers. Only so many people can make a semblance of a living hocking other people’s castoff crap on ebay/craig’s list. So far our society has responded by ignoring it or denying that it’s a problem. This will continue until it can’t.

    ~S

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  • @Tregon
    One of the defining conditions of our day is rising economic inequality. The wealthiest Americans are pulling away from the rest of us. The staggering scale of this inequality... What’s the reason for this? There are two overarching reasons, those are labor oversupply (which stems from immigration and natural population increase) and labor obsolescence (which stems from automation and globalization).

    I don't think those are reasons: those are mechanisms whereby the elite enriches itself and impoverishes the historic American nation, i.e. European whites. The reasons for the growing inequality are the greed of the elite and its hatred for the historic American nation. The elite is greedy and hate-filled for genetic and cultural reasons. To understand what is happening in America, you have to look at Europe and European history. Europe is undergoing the same process for the same reasons.

    And while American and European whites are being impoverished and reducing the number of children they have, they're funding the population growth of non-whites, and particularly non-whites who are not suited to liberal democracies.

    @Dante’s Ascendancy:

    One of the defining conditions of our day is rising economic inequality. The wealthiest Americans are pulling away from the rest of us. The staggering scale of this inequality… What’s the reason for this? There are two overarching reasons, those are labor oversupply (which stems from immigration and natural population increase) and labor obsolescence (which stems from automation and globalization).

    I don’t think those are reasons: those are mechanisms whereby the elite enriches itself and impoverishes the historic American nation, i.e. European whites. The reasons for the growing inequality are the greed of the elite and its hatred for the historic American nation.

    Regardless of the role the elite play, how do you think it happens? As I’ve explain in this post.

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  • @Jorge Videla
    "dude", i'm one of hsu's subjects, and i'd be the first to stand in line for sterilization if i were selected according to some reasonable criteria.

    what's wrong is that people with a very high likelihood to bring into this world other people who will live in miserable poverty their entire lives and even worse be laughed and hated by their betters.

    the only way. THE ONLY WAY to put an end to class is coercive eugenics. because only then can the excuse of "you know those people. what do you expect." become impossible.

    you're not much of a liberal after all.

    and you know jayman you can be irriligious and even anti-religion without being an atheist. read being and time.

    “dude”, i’m one of hsu’s subjects, and i’d be the first to stand in line for sterilization if i were selected according to some reasonable criteria.

    That’s good for you. I wouldn’t want to impose this decision on anyone, nor should we as a society do so.

    the only way. THE ONLY WAY to put an end to class is coercive eugenics. because only then can the excuse of “you know those people. what do you expect.” become impossible.

    No. It wouldn’t make class go away. Coercive eugenics is wrong, and unacceptable. That is my official position. Please, do not make additional references to it, or I will have to subject your comments to moderation.

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  • One of the defining conditions of our day is rising economic inequality. The wealthiest Americans are pulling away from the rest of us. The staggering scale of this inequality… What’s the reason for this? There are two overarching reasons, those are labor oversupply (which stems from immigration and natural population increase) and labor obsolescence (which stems from automation and globalization).

    I don’t think those are reasons: those are mechanisms whereby the elite enriches itself and impoverishes the historic American nation, i.e. European whites. The reasons for the growing inequality are the greed of the elite and its hatred for the historic American nation. The elite is greedy and hate-filled for genetic and cultural reasons. To understand what is happening in America, you have to look at Europe and European history. Europe is undergoing the same process for the same reasons.

    And while American and European whites are being impoverished and reducing the number of children they have, they’re funding the population growth of non-whites, and particularly non-whites who are not suited to liberal democracies.

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    • Replies: @JayMan
    @Dante’s Ascendancy:

    One of the defining conditions of our day is rising economic inequality. The wealthiest Americans are pulling away from the rest of us. The staggering scale of this inequality… What’s the reason for this? There are two overarching reasons, those are labor oversupply (which stems from immigration and natural population increase) and labor obsolescence (which stems from automation and globalization).

    I don’t think those are reasons: those are mechanisms whereby the elite enriches itself and impoverishes the historic American nation, i.e. European whites. The reasons for the growing inequality are the greed of the elite and its hatred for the historic American nation.
     

    Regardless of the role the elite play, how do you think it happens? As I've explain in this post.
    , @Tregon
    Regardless of the role the elite play, how do you think it happens? As I’ve explain in this post.

    Yes and explained v. well. But there was no point in saying "Yay 4 Jay!" You can take that as read.

    Regardless of the role the elite play...

    IOW, regardless of the role the HBD plays. This is a HBD blog. Writing about the effects of HBD without mentioning the HBD is an interesting exercise. But then one other effect of the HBD in question is fear of mentioning the HBD in question. It's perfectly rational fear too: that HBD would like to take away the First Amendment, but for the time being it has to be satisfied with destroying reputations and careers. Elsewhere in the world, it has already got the thought-crime laws it would like to enact in the US.

    You could also have written about the looting of Russia after communism. The "reasons" for the looting were asset-stripping, crooked auctions and collaboration between ex-communist officials in Russia and economists in the U.S. But behind those reasons lay, once again, HBD. And it was the same HBD:

    http://isteve.blogspot.co.uk/2013/06/marc-rich.html

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  • @chrisdavies09
    Great post Jayman. I don't live in the States but everything you wrote makes perfect sense to me. Many of these points could apply equally to the UK. The USA and the UK both favour the Keynesian economic approach, with the Bank of England and the Federal Reserve pursuing economic growth at all costs, including zero interest rates and massive economic stimulus. Here in the UK David Cameron is implementing state-backed mortgages. Nothing has been learned from the 2008 crisis. And mass immigration still continues. Our economy is the emperor's new clothes. All manufacturing jobs exported. An economy based on debt-fuelled government spending, consumer spending. and house price inflation. Everything imported and very little exported. Domestic companies being taken over by Chinese state-backed companies, or Arab sovereign wealth funds. Worse still in my opinion is the drive towards a 'gender-neutral' society in western countries. If women are earning the same as men, or out-earning men, and in fact no longer need men except for creating children, what effect would that have on male incentives to be hard-working, productive, or create companies and jobs? Can a female-driven economy work? Can it compete with more traditional, patriarchal economies in other countries? Western civilisation and capitalism was male-led. If we transition from a 'K-selected' society to an 'r-selected' one, whether via feminism and the pursuit of a 'gender neutral' society, or through immigration, or both, the long-term effect in my opinion could well be economic collapse. And as far as I can tell the governments and institutions of most western countries, eg USA, Canada, UK, Western European countries, Australia, are totally committed to achieving gender equality or gender-neutral societies.

    and now median household income is higher in statist france than in the uk.

    the anglosphere ascendancy is over. it died from ideology and upper class windbags like your cameron.

    it’s now quite obvious that the wrong side won the world wars.

    germany still makes stuff. lots of stuff. germany has much lower inequality than the uk, and much higher mobility. germany is a great county. the uk is not.

    but unfortunately the anglo-saxon poison of neoliberalism germany says is good enough for greece and spain, yet germany would never practice it at home.

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  • @Anonymous
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time."

    indeed. if the only work one can do is demeaning and unnecessary, not real work at all, which has become the lot of at least half the population it would be better to live like ted kaczynski. his manifesto makes many of the points your post has made. (he was a terrorist, but he wasn't crazy at all. he is the most famous living Cynic.)

    the poor in the developed world aren't exploited; they are irrelevant, but middle class engineers are exploited. the expropriation of surplus value is real. dividend recapitalization is an egregious example practiced by lbo funds.

    the only solution is eugenics and forced sterilizations. when the useless can't be said to be inferior, there will be no shame in being idle.

    “dude”, i’m one of hsu’s subjects, and i’d be the first to stand in line for sterilization if i were selected according to some reasonable criteria.

    what’s wrong is that people with a very high likelihood to bring into this world other people who will live in miserable poverty their entire lives and even worse be laughed and hated by their betters.

    the only way. THE ONLY WAY to put an end to class is coercive eugenics. because only then can the excuse of “you know those people. what do you expect.” become impossible.

    you’re not much of a liberal after all.

    and you know jayman you can be irriligious and even anti-religion without being an atheist. read being and time.

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    • Replies: @JayMan
    @Jorge Videla:

    “dude”, i’m one of hsu’s subjects, and i’d be the first to stand in line for sterilization if i were selected according to some reasonable criteria.
     
    That's good for you. I wouldn't want to impose this decision on anyone, nor should we as a society do so.

    the only way. THE ONLY WAY to put an end to class is coercive eugenics. because only then can the excuse of “you know those people. what do you expect.” become impossible.
     
    No. It wouldn't make class go away. Coercive eugenics is wrong, and unacceptable. That is my official position. Please, do not make additional references to it, or I will have to subject your comments to moderation.
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  • Great post Jayman. I don’t live in the States but everything you wrote makes perfect sense to me. Many of these points could apply equally to the UK. The USA and the UK both favour the Keynesian economic approach, with the Bank of England and the Federal Reserve pursuing economic growth at all costs, including zero interest rates and massive economic stimulus. Here in the UK David Cameron is implementing state-backed mortgages. Nothing has been learned from the 2008 crisis. And mass immigration still continues. Our economy is the emperor’s new clothes. All manufacturing jobs exported. An economy based on debt-fuelled government spending, consumer spending. and house price inflation. Everything imported and very little exported. Domestic companies being taken over by Chinese state-backed companies, or Arab sovereign wealth funds. Worse still in my opinion is the drive towards a ‘gender-neutral’ society in western countries. If women are earning the same as men, or out-earning men, and in fact no longer need men except for creating children, what effect would that have on male incentives to be hard-working, productive, or create companies and jobs? Can a female-driven economy work? Can it compete with more traditional, patriarchal economies in other countries? Western civilisation and capitalism was male-led. If we transition from a ‘K-selected’ society to an ‘r-selected’ one, whether via feminism and the pursuit of a ‘gender neutral’ society, or through immigration, or both, the long-term effect in my opinion could well be economic collapse. And as far as I can tell the governments and institutions of most western countries, eg USA, Canada, UK, Western European countries, Australia, are totally committed to achieving gender equality or gender-neutral societies.

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    • Replies: @Jorge Videla
    and now median household income is higher in statist france than in the uk.

    the anglosphere ascendancy is over. it died from ideology and upper class windbags like your cameron.

    it's now quite obvious that the wrong side won the world wars.

    germany still makes stuff. lots of stuff. germany has much lower inequality than the uk, and much higher mobility. germany is a great county. the uk is not.

    but unfortunately the anglo-saxon poison of neoliberalism germany says is good enough for greece and spain, yet germany would never practice it at home.

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  • @Sisyphean
    You are absolutely correct about automation, I'm reminded of Kurt Vonnegut's 'Player Piano'. In my mind the greatest folly of our age is the very idea that technology itself will cure each and every ill that besets the human species. People starving in the third world? Why, we'll just develop new ways to increase food so those people can eat to their heart's content and make even more children. You used to build cars with your hands, well now you can use those hands to knit custom scarves for rich ladies on Etsy! And If you've got a vice we've got an app to exploit it! Only good can come of it of course and If you don't agree you're an ignorant luddite. It speaks to a society led by those with great heads for numbers and mechanical solutions but little understanding of how actual people live, work, and love.

    There isn't much love around the HBD sphere for Jared Diamond but I enjoyed his Collapse immensely. This is what we do. As a species we seem to sow the seeds of our own destruction so easily and thoughtlessly it would be a joke if it were not so tragic.

    ~S

    It is a mistake to think that automation only replaces manual labor. Intellectual labor is in many ways easier to replace because many kinds of intellectual work like medical diagnosis has a fairly logical structure that is easy to code. In engineering, computer aided design (CAD) has made major inroads into the engineering labor market. And GPS and CAD have reduced survey parties that used to consist of at least 3 to 4 surveyors to one-man operations. Financial analysis programs have likewise reduced the need for financial analysts, and low level law jobs are giving way to text search and analysis programs. Medicine, especially diagnosis and surgery, is well on its way to full automation.

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  • […] hold up to a frightening degree, but that’s for another day. Today I’m reading JayMan’s treatise on why we are doomed. I’m sure the Zero Hedge types will be memorizing passages from it all […]

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  • @Anonymous
    "In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time."

    indeed. if the only work one can do is demeaning and unnecessary, not real work at all, which has become the lot of at least half the population it would be better to live like ted kaczynski. his manifesto makes many of the points your post has made. (he was a terrorist, but he wasn't crazy at all. he is the most famous living Cynic.)

    the poor in the developed world aren't exploited; they are irrelevant, but middle class engineers are exploited. the expropriation of surplus value is real. dividend recapitalization is an egregious example practiced by lbo funds.

    the only solution is eugenics and forced sterilizations. when the useless can't be said to be inferior, there will be no shame in being idle.

    Dude, first of all, no sock puppetry. Stick with a name, even it’s anonymous.

    the only solution is eugenics and forced sterilizations. when the useless can’t be said to be inferior, there will be no shame in being idle.

    Forced sterilizations are wrong as a matter of course. We don’t need coercive eugenics.

    Read More
    ReplyAgree/Disagree/Etc.
  • Anonymous • Disclaimer says:

    “In short, subsistence living (or even producing excess to help others) may be a wise strategy to pursue. People who live in fertile rural areas are at a distinct advantage over everyone else here, at least for a time.”

    indeed. if the only work one can do is demeaning and unnecessary, not real work at all, which has become the lot of at least half the population it would be better to live like ted kaczynski. his manifesto makes many of the points your post has made. (he was a terrorist, but he wasn’t crazy at all. he is the most famous living Cynic.)

    the poor in the developed world aren’t exploited; they are irrelevant, but middle class engineers are exploited. the expropriation of surplus value is real. dividend recapitalization is an egregious example practiced by lbo funds.

    the only solution is eugenics and forced sterilizations. when the useless can’t be said to be inferior, there will be no shame in being idle.

    Read More
    • Replies: @JayMan
    Dude, first of all, no sock puppetry. Stick with a name, even it's anonymous.

    the only solution is eugenics and forced sterilizations. when the useless can’t be said to be inferior, there will be no shame in being idle.
     
    Forced sterilizations are wrong as a matter of course. We don't need coercive eugenics.
    , @Jorge Videla
    "dude", i'm one of hsu's subjects, and i'd be the first to stand in line for sterilization if i were selected according to some reasonable criteria.

    what's wrong is that people with a very high likelihood to bring into this world other people who will live in miserable poverty their entire lives and even worse be laughed and hated by their betters.

    the only way. THE ONLY WAY to put an end to class is coercive eugenics. because only then can the excuse of "you know those people. what do you expect." become impossible.

    you're not much of a liberal after all.

    and you know jayman you can be irriligious and even anti-religion without being an atheist. read being and time.

    , @Jorge Videla
    jayman, sorry for the misspellings and incomplete sentence. i juast type looking at th keyboard and press post.

    you're an infantile leftist.

    class is so much less obtrusive in scandinavia and japan precisely because these countries are so homogeneous. class is ignored in les etats-unis merdeux because race pops up to obscure it.

    when the state vets all births there is class is no longer viable.

    THE DEEP reason why population control has never caught on is that any govt powerful enough to carry it out, like that iof the prc, wopuld be more powerful than CAPITAL could tolerate.

    grow up. there is an AUFHEBUNG between the far left and far right. it's eugenics.

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  • @Sisyphean
    I don't know if you can solve that problem though. You introduce huge change very quickly with technology, much of it arguably for the better, but as learning organisms have a limited ability to adapt in real-time and basically zero ability to do so through evolution given the speed of the change. What we end up doing is creating new technology to solve the problems created by previous technologies. I'm not saying it's all bad just that it's a bit of a trap that the most mechanistic among us seem to revel in. There's a whole lot of short term thinking going on. Or I might just be being contrarian, we live in the age of wireless micro-transactions and the herd is going with the flow and I just can't do that for better or for worse. The funniest part being that my day job is enterprise IT development. Eh, back to painting monsters by candle light.

    ~S

    Or I might just be being contrarian, we live in the age of wireless micro-transactions and the herd is going with the flow and I just can’t do that for better or for worse. The funniest part being that my day job is enterprise IT development. Eh, back to painting monsters by candle light.

    I don’t think I have much to add. ;)

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  • @Sisyphean
    You are absolutely correct about automation, I'm reminded of Kurt Vonnegut's 'Player Piano'. In my mind the greatest folly of our age is the very idea that technology itself will cure each and every ill that besets the human species. People starving in the third world? Why, we'll just develop new ways to increase food so those people can eat to their heart's content and make even more children. You used to build cars with your hands, well now you can use those hands to knit custom scarves for rich ladies on Etsy! And If you've got a vice we've got an app to exploit it! Only good can come of it of course and If you don't agree you're an ignorant luddite. It speaks to a society led by those with great heads for numbers and mechanical solutions but little understanding of how actual people live, work, and love.

    There isn't much love around the HBD sphere for Jared Diamond but I enjoyed his Collapse immensely. This is what we do. As a species we seem to sow the seeds of our own destruction so easily and thoughtlessly it would be a joke if it were not so tragic.

    ~S

    I don’t know if you can solve that problem though. You introduce huge change very quickly with technology, much of it arguably for the better, but as learning organisms have a limited ability to adapt in real-time and basically zero ability to do so through evolution given the speed of the change. What we end up doing is creating new technology to solve the problems created by previous technologies. I’m not saying it’s all bad just that it’s a bit of a trap that the most mechanistic among us seem to revel in. There’s a whole lot of short term thinking going on. Or I might just be being contrarian, we live in the age of wireless micro-transactions and the herd is going with the flow and I just can’t do that for better or for worse. The funniest part being that my day job is enterprise IT development. Eh, back to painting monsters by candle light.

    ~S

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    • Replies: @JayMan
    @Sisyphean:

    Or I might just be being contrarian, we live in the age of wireless micro-transactions and the herd is going with the flow and I just can’t do that for better or for worse. The funniest part being that my day job is enterprise IT development. Eh, back to painting monsters by candle light.
     
    I don't think I have much to add. ;)
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  • yes, real simple – Income inequality. Less disposable income now than ever as the top gains wealth the lower working class erode!

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  • @Orthodox
    A depression also requires a massive credit bubble that leads to malinvestment. Imagine someone goes deep into debt to build a buggy factory as the automobile comes out; obviously a bad idea. It doesn't need to be that clear cut though, it is enough if someone calculates that a new widget factory is profitable at 2% interest rates, but not at 10% interest rates. There is only so much real savings in an economy (in other words delayed consumption), but the central bank and banks can create "excess" credit that is unbacked by real goods and services. If that credit is used to build a profitable factory that can repay the debt, then there is no inflation and the debt is retired. If credit continues to build in the system though, it means the credit is being used for less and less viable ventures. If a credit bubble pushes interest rates low enough, you get an artificial boom cycle filled with malinvestments that leads to a bust. (Student debt is another bubble. Wiping out the debts is a solution, but remember that all those debts are someone's assets. This is why real interest rates go very high during a depression: there is too little real savings and all the fake assets are destroyed.)

    The credit boom cycle, driven by inflation of the currency, delivers more gains to owners of capital. This is why inequality goes hand in hand with a credit boom. Under the economy's natural rate of mild deflation, any idiot can earn a positive return on his savings by putting cash under the mattress. Today, you must invest, and that takes some intelligence (not a lot, but consider who is at the very bottom of the economic pyramid).

    In sum, everything you say is true, but there would be no major depression if there was no credit bubble because there would be far less volatility. The economy would under perform for a time and then recover. Today, the massive debts in the economy increase the costs in the economy and creates a situation where more and more firms and individuals cannot pay their debts. If everyone was debt free, this vicious cycle would not happen.

    Finally, consider that the credit/inflation boom from about 1980-2008 also paid for a lot of bad behavior. Single parent homes, for example, are expensive, but the massive credit bubble provides tax money to subsidize it. When this crash comes, it's not just going to be economic, but societal. People who currently require subsidies to maintain their standard of living, be it from government or other Americans (so divorced women with kids are included) are going to lose their subsidies and have nothing. People won't starve, but they will internalize the true costs of their lifestyles (as will over consuming Americans driving gas guzzling cars).

    Great points! Thanks for fleshing this out for us.

    One thing though:

    Finally, consider that the credit/inflation boom from about 1980-2008 also paid for a lot of bad behavior. Single parent homes, for example, are expensive, but the massive credit bubble provides tax money to subsidize it. When this crash comes, it’s not just going to be economic, but societal. People who currently require subsidies to maintain their standard of living, be it from government or other Americans (so divorced women with kids are included) are going to lose their subsidies and have nothing.

    I don’t expect government subsidies to disappear. In fact, should a collapse start to get really bad, I expect more subsidies, more stimulus by government in an attempt to pull us out of it (even the development of more social welfare programs). This attempt will eventually be partially successful.

    One can hope that they also enact real efforts to reduce some of the labor surplus that is dragging us all down.

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  • […] JayMan has a blog post about the possibility of a second Great Depression. […]

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  • @Greying Wanderer
    Excellent post.

    Thank you! Notice the nod to your earlier comment.

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  • @Sisyphean
    You are absolutely correct about automation, I'm reminded of Kurt Vonnegut's 'Player Piano'. In my mind the greatest folly of our age is the very idea that technology itself will cure each and every ill that besets the human species. People starving in the third world? Why, we'll just develop new ways to increase food so those people can eat to their heart's content and make even more children. You used to build cars with your hands, well now you can use those hands to knit custom scarves for rich ladies on Etsy! And If you've got a vice we've got an app to exploit it! Only good can come of it of course and If you don't agree you're an ignorant luddite. It speaks to a society led by those with great heads for numbers and mechanical solutions but little understanding of how actual people live, work, and love.

    There isn't much love around the HBD sphere for Jared Diamond but I enjoyed his Collapse immensely. This is what we do. As a species we seem to sow the seeds of our own destruction so easily and thoughtlessly it would be a joke if it were not so tragic.

    ~S

    I think technology is a great thing. I mean, technology is what we as humans do – we are utterly dependent on it. That said, a key problem is that our social/economic organization hasn’t fully adapted to accommodate the changes wrought by technology, yet. That’s a problem we’re still working on (indeed, this is a continual process), especially with regards to automation.

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  • Excellent post.

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    • Replies: @JayMan
    @Greying Wanderer:

    Thank you! Notice the nod to your earlier comment.

    ReplyAgree/Disagree/Etc.
  • A depression also requires a massive credit bubble that leads to malinvestment. Imagine someone goes deep into debt to build a buggy factory as the automobile comes out; obviously a bad idea. It doesn’t need to be that clear cut though, it is enough if someone calculates that a new widget factory is profitable at 2% interest rates, but not at 10% interest rates. There is only so much real savings in an economy (in other words delayed consumption), but the central bank and banks can create “excess” credit that is unbacked by real goods and services. If that credit is used to build a profitable factory that can repay the debt, then there is no inflation and the debt is retired. If credit continues to build in the system though, it means the credit is being used for less and less viable ventures. If a credit bubble pushes interest rates low enough, you get an artificial boom cycle filled with malinvestments that leads to a bust. (Student debt is another bubble. Wiping out the debts is a solution, but remember that all those debts are someone’s assets. This is why real interest rates go very high during a depression: there is too little real savings and all the fake assets are destroyed.)

    The credit boom cycle, driven by inflation of the currency, delivers more gains to owners of capital. This is why inequality goes hand in hand with a credit boom. Under the economy’s natural rate of mild deflation, any idiot can earn a positive return on his savings by putting cash under the mattress. Today, you must invest, and that takes some intelligence (not a lot, but consider who is at the very bottom of the economic pyramid).

    In sum, everything you say is true, but there would be no major depression if there was no credit bubble because there would be far less volatility. The economy would under perform for a time and then recover. Today, the massive debts in the economy increase the costs in the economy and creates a situation where more and more firms and individuals cannot pay their debts. If everyone was debt free, this vicious cycle would not happen.

    Finally, consider that the credit/inflation boom from about 1980-2008 also paid for a lot of bad behavior. Single parent homes, for example, are expensive, but the massive credit bubble provides tax money to subsidize it. When this crash comes, it’s not just going to be economic, but societal. People who currently require subsidies to maintain their standard of living, be it from government or other Americans (so divorced women with kids are included) are going to lose their subsidies and have nothing. People won’t starve, but they will internalize the true costs of their lifestyles (as will over consuming Americans driving gas guzzling cars).

    Read More
    • Replies: @JayMan
    @Orthodox:

    Great points! Thanks for fleshing this out for us.

    One thing though:


    Finally, consider that the credit/inflation boom from about 1980-2008 also paid for a lot of bad behavior. Single parent homes, for example, are expensive, but the massive credit bubble provides tax money to subsidize it. When this crash comes, it’s not just going to be economic, but societal. People who currently require subsidies to maintain their standard of living, be it from government or other Americans (so divorced women with kids are included) are going to lose their subsidies and have nothing.
     
    I don't expect government subsidies to disappear. In fact, should a collapse start to get really bad, I expect more subsidies, more stimulus by government in an attempt to pull us out of it (even the development of more social welfare programs). This attempt will eventually be partially successful.

    One can hope that they also enact real efforts to reduce some of the labor surplus that is dragging us all down.

    ReplyAgree/Disagree/Etc.
  • […] the Road to American Disunion and A Second Great Depression? – from […]

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    ReplyAgree/Disagree/Etc.
  • You are absolutely correct about automation, I’m reminded of Kurt Vonnegut’s ‘Player Piano’. In my mind the greatest folly of our age is the very idea that technology itself will cure each and every ill that besets the human species. People starving in the third world? Why, we’ll just develop new ways to increase food so those people can eat to their heart’s content and make even more children. You used to build cars with your hands, well now you can use those hands to knit custom scarves for rich ladies on Etsy! And If you’ve got a vice we’ve got an app to exploit it! Only good can come of it of course and If you don’t agree you’re an ignorant luddite. It speaks to a society led by those with great heads for numbers and mechanical solutions but little understanding of how actual people live, work, and love.

    There isn’t much love around the HBD sphere for Jared Diamond but I enjoyed his Collapse immensely. This is what we do. As a species we seem to sow the seeds of our own destruction so easily and thoughtlessly it would be a joke if it were not so tragic.

    ~S

    Read More
    • Replies: @JayMan
    @Sisyphean:

    I think technology is a great thing. I mean, technology is what we as humans do – we are utterly dependent on it. That said, a key problem is that our social/economic organization hasn't fully adapted to accommodate the changes wrought by technology, yet. That's a problem we're still working on (indeed, this is a continual process), especially with regards to automation.

    , @Sisyphean
    I don't know if you can solve that problem though. You introduce huge change very quickly with technology, much of it arguably for the better, but as learning organisms have a limited ability to adapt in real-time and basically zero ability to do so through evolution given the speed of the change. What we end up doing is creating new technology to solve the problems created by previous technologies. I'm not saying it's all bad just that it's a bit of a trap that the most mechanistic among us seem to revel in. There's a whole lot of short term thinking going on. Or I might just be being contrarian, we live in the age of wireless micro-transactions and the herd is going with the flow and I just can't do that for better or for worse. The funniest part being that my day job is enterprise IT development. Eh, back to painting monsters by candle light.

    ~S

    , @bob sykes
    It is a mistake to think that automation only replaces manual labor. Intellectual labor is in many ways easier to replace because many kinds of intellectual work like medical diagnosis has a fairly logical structure that is easy to code. In engineering, computer aided design (CAD) has made major inroads into the engineering labor market. And GPS and CAD have reduced survey parties that used to consist of at least 3 to 4 surveyors to one-man operations. Financial analysis programs have likewise reduced the need for financial analysts, and low level law jobs are giving way to text search and analysis programs. Medicine, especially diagnosis and surgery, is well on its way to full automation.
    , @Sisyphean
    @bob but what do those people do when they can no longer shuffle paper? The art world is already awash in boring 2D painters, angel sculptors, and flower/sunset photographers. Only so many people can make a semblance of a living hocking other people's castoff crap on ebay/craig's list. So far our society has responded by ignoring it or denying that it's a problem. This will continue until it can't.

    ~S

    ReplyAgree/Disagree/Etc.