Category Archive: 5.) Charles Hugh Smith

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The Criminalization of Financial Independence

2017-02-22

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2017-02-22

Wage GDP 1950 - 2016
Just as the "war on drugs" criminalized and destroyed large swaths of African-American and Latino communities, the "war on cash" will further criminalize the few remaining avenues to financial independence and freedom. The introduction of "entitlement" welfare in the 1960s generated a toxic dependency on the state that institutionalized worklessness, a one-two punch that undermined marriage and family in America's working class of all ethnicities.

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This Is How the Status Quo Unravels: As the Pie Shrinks, Everybody Demands Their Piece Should Get Bigger

2017-02-17

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2017-02-17

Government Pie
The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the "pie" being cheap energy, government revenues and consumption, sales and profits. Horsetrading over a growing pie is basically fun. There's always a little increase left for the losers, so there is a reason for everyone to cooperate in a broad political consensus.

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Want to Bring Back Jobs? It’s Impossible Unless We Fix these Four Things

2017-02-14

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2017-02-14

U.S. Healthcare System
It's your choice, America--you can keep your cartels and the captured government that enables and protects them, or you can fix what's broken and unaffordable. If there is any goal that might attract support from across the political spectrum, it's creating more fulltime jobs in the U.S. But this laudable goal is dead-on-arrival (DOA) unless we first fix these four things. Why is job growth stagnating? Many point to automation, and yes, that is a...

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The Colonization of Local-Business Main Street by Corporate America

2017-02-09

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2017-02-09

Corporate Profits After Tax 1950 - 2016
This is what our mode of production optimizes: ugliness, debt-serfdom, and servitude to politically dominant corporations.

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The Central Banks Pull Back: Now It’s Up to Fiscal Policy to “Save the World”

2017-02-08

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2017-02-08

Top Spending from 1990 to 2012
Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending. Have you noticed that the breathless anticipation of the next central bank "save" has diminished? Remember when the financial media was in a tizzy of excitement, speculating on what new central bank expansion would send the global markets higher in paroxysms of risk-on joy?

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Expropriation and Impoverishment: “Capitalist” Greece and “Socialist” Venezuela

2017-02-07

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2017-02-07

Greek Debt
Yesterday I noted that not all assets will make it through the inevitable financial re-set. ( Which Assets Are Most Likely to Survive the Inevitable "System Re-Set"?) Those that are easy to expropriate will be expropriated, and those assets vulnerable to soaring taxes, inflation and currency devaluation will also be hollowed out.

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Which Assets Are Most Likely to Survive the Inevitable “System Re-Set”?

2017-02-06

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2017-02-06

Share of Gross Domestic Income: Compensation of employees,
Your skills, knowledge and and social capital will emerge unscathed on the other side of the re-set wormhole. Your financial assets held in centrally controlled institutions will not. Longtime correspondent C.A. recently asked a question every American household should be asking: which assets are most likely to survive the "system re-set" that is now inevitable?

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The Central Banks Face Unwelcome Realities: Their Policies Boosted Wealth Inequality, Failed to Generate “Growth”

2017-02-05

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2017-02-05

U.S. Fed Summary
Rather than be seen to be further enriching the rich, I think central banks will start closing the "free money for financiers" spigots. Take a quick glance at these charts of the Federal Reserve balance sheet and bank credit in the U.S.

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What Would a Labor-Centered Economy Look Like?

2017-02-04

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2017-02-04

Wealth Pyramid 2015
How about moving the power to create money from the apex of the pyramid down to its lowest level? Let's spend a moment deconstructing the word "capitalism." Note it contains the word Capital. So far so good. Obviously the key concept here is capital. So what is "capital"? It turns out there are multiple kinds of capital. The most familiar kinds are tangible: cash, orchards, factories, water rights, tools, and so on.

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Why Our System Is Broken: Cheap Credit Is King

2017-02-02

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2017-02-02

Global Bond Market
You want to fix the economic system, reduce political bribery and reduce rising income inequality? Shut off the cheap unlimited credit spigot to banks, financiers and corporations. Cheap credit--newly issued money that can be borrowed at low rates of interest--is presented as the savior of our economic system, but in reality, it's why our system is broken.

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The Collapse of the Left

2017-01-23

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2017-01-23

Shares of Gross Domestic Income
The Left is not just in disarray--it is in complete collapse because the working class has awakened to the Left's betrayal and abandonment of the working class in favor of building personal wealth and power. The source of the angry angst rippling through the Democratic Party's progressive camp is not President Trump--it's the complete collapse of the Left globally. To understand this collapse, we turn (once again) to Marx's profound understanding...

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25 Years of Neocon-Neoliberalism: Great for the Top 5 percent, A Disaster for Everyone Else

2017-01-22

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2017-01-22

The global wealth pyramid
It cannot be merely coincidental that the incomes and wealth of the top 5% have pulled away from the stagnating 95% in the 25 years dominated by neocon-neoliberalism. One unexamined narrative I keep hearing is: "OK, so neocon-neoliberalism was less than ideal, but Trump could be much worse." Let's start by asking: would Syrian civilians agree with this assessment?

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Will Our Grandchildren Wonder Why We Didn’t Build a Renewable Power Grid When It Was Still Affordable?

2017-01-16

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2017-01-16

Total Primary Energy Consumption
Anyone seeking clarity on the energy picture a decade or two out is to be forgiven for finding a thoroughly confusing divide. On the one hand, we have reassuring projections from the U.S. Energy Information Administration (EIA) that assume current production of fossil fuels will remain steady for decades to come.

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Dear Self-Proclaimed “Progressives”: as Apologists for the Neocon-Neoliberal Empire, You Are as Evil as the Empire You’ve Enabled

2017-01-15

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2017-01-15

Federal Government Support
Dear Self-Proclaimed "Progressive": I love you, man, but it has become necessary to intervene in your self-destruction. Your ideological blinders and apologies for the Establishment's Neocon-Neoliberal Empire are not just destroying your credibility, they're destroying the nation and everywhere the Empire intervenes.

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What’s Truly Progressive?

2017-01-14

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2017-01-14

The New Normal
What's progressive? Pushing power, agency, skills, capital and solutions down to the individual, household, community, enterprise, town and city levels and focusing on doing more with much less.

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The Eight Forces That Are Pressuring Profits

2017-01-13

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2017-01-13

Spending by the top 5% pulls away from the 95%
If there is any economic assumption that goes unquestioned, it's the notion that profits will remain robust for the foreseeable future. This assumption ignores the tidal forces that are now flowing against profits. Any discussion of corporate profits must start by noting the astonishing rise in U.S. corporate profits since the heyday of the late 1990s dot-com boom. From $800 billion to $2.4 trillion in a few years is not just extraordinary--it's...

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Why Don’t the U.S. Dollar and Bitcoin Drop to Their Tangible Value, i.e. Zero?

2017-01-09

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2017-01-09

Bitcoin January 2016 - January 2017
I have covered the many reasons why the U.S. dollar (USD) has strengthened in dozens of posts over the past 5 years, (Could the U.S. Dollar Rise 50%?, January 12, 2011), and I described the positive dynamics of bitcoin last summer in An Everyman's Guide to Understanding Cryptocurrencies (June 13, 2016), back when bitcoin was under $600.

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Why Profits Are Faltering

2017-01-08

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2017-01-08

National Income: Corporate Profits
Profits are faltering for structural reasons that are not easily resolved. The bedrock assumption of the Bull market is that corporate profits will keep rising indefinitely. Hiccups are allowed, but current stock market valuations are implicitly based on profits expanding.

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We Can Only Afford One, So Choose Wisely: Social Security/Medicare, Cartel Cronyism or Inflation (a.k.a. Central Banking)

2017-01-07

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2017-01-07

U.S. Healthcare System, Health Expenditure, Life Expenctancy
Here's the problem with central banks seeking higher inflation: costs go up but wages don't. It's easy to quantify the annual cost of Social Security/Medicare, and not so easy to calculate the cost of Cartel Cronyism and Central Bank-created inflation.Cartel cronyism is a hidden tax on the entire economy, as is Central Bank-created inflation.

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Prosperity = Abundant Work + Low Cost of Living

2017-01-06

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2017-01-06

Net Annual Change in the Number of Firms
If we seek a coherent context for the new year, we would do well to start with the foundations of widespread prosperity. While the economy is a vast, complex machine, the sources of widespread prosperity are not that complicated: abundant work and a low cost of living.

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