Tuesday, April 02, 2019
Is the USS Ship of Fools Taking on Water?
For some time people have been telling me that I should watch the movie Idiocracy because it shows what the US is turning into. Well, I am not sure that a move about idiocy can avoid being idiotic, so I'll pass, but there is a definite increase in the level of stupidity displayed by those who are part of the US establishment. This shouldn't come as a surprise; after all, why would anyone possessed of wisdom and integrity want to have anything to do with it by this time? Points of extreme stupidity—so stupid it hurts to watch—are all around us at the moment. Let me point out a few important ones.
While I was busy twinkling my toes in the azure waters, special investigator Robert Mueller finally released his report. He had left no stupid stone unturned, but failed to accomplish his assigned task, which was to prove that Trump had colluded with Russia. In his report he claimed that although he found no evidence of collusion or obstruction of justice, his report does not exonerate Trump. Note these two points of extreme stupidity. First point: if there was no collusion, there was no crime, and no course of justice to obstruct. Second point: if, as Mueller admits, no crime has been committed, there is nothing to exonerate Trump from.
The Democrats, who have been hoping to impeach Trump on the basis of Mueller's report, should perhaps take hope in the fact that Mueller has turned out to be so incompetent that he can't understand such basics of his profession; perhaps there was collusion after all, but Mueller was too stupid to find evidence of it. Or perhaps the Democrats should collapse in a paroxysm of despair, because Mueller was their best and last chance and now they look like idiots for believing in him.
Next in the stupids parade we have attorney general William Barr, who, in his summary of Mueller's report, uncritically accepted the claims that Russian meddling in the 2016 presidential election did take place. What meddling was that?
There was a St. Petersburg troll farm run by somebody who was said to have once cooked for Putin. The trolls put up click-bait ads on social media. The scope of their operation was minuscule and most of their activity took place after the election, making the claim that they manipulated the election preposterous. Mueller's effort to prosecute them stalled out when their lawyers turned up in court and demanded to see the evidence. Mueller couldn't let that happen because it would have caused the entire courtroom to die laughing.
There was also the claim that Russian hackers hacked into an email server at the DNC, stole a bunch of emails showing an effort to rig the primaries against Bernie Sanders, and leaked them to Wikileaks. But there is evidence that these emails were not hacked but leaked by being copied to a thumb drive by somebody with physical access to the server.
Is Barr too stupid to realize the foolishness of his claims that "the Russians"—whatever that means—had manipulated the US election? Yes, it appears to be the case. With officials this stupid, how stupid was it for the Democrats to spend two years nurturing their dream of getting rid of Trump with their help?
And so Trump is here to stay. Is this where stupidity ends? No, of course not, for here we simply enter the next circle of stupidity. Trump dreams of "making America great again"; but is his dream stupid? Let's look at the results.
His idea was to renegotiate trade deals in America's favor and to repatriate manufacturing which had been offshored to low-wage countries around the world, slash the trade deficit and create lots of good jobs. Seems like a good plan, but let's step back for a moment and look at what the real issue is.
The real issue is that there is a massive imbalance in the US between what Americans produce and what Americans consume: they consume a lot more than they can afford.
One solution would be to slash consumption, but it makes up 70% of the economy, and doing so would shrink it, blowing up the already disproportionately large debt bubble and sending the US economy into deepest depression. This doesn't sound great at all.
Another solution would be to devalue the dollar through uncontrolled dollar emission. This would make American exports competitive with those of lower-wage countries. But this would undermine the US dollar as a reserve currency, cause US debt holders around the world to stampede toward the exits and result in a hyperinflationary shock that would send the US economy into deepest depression, again. This doesn't sound great either, but that was the plan floated by Trump's former advisor Steve Bannon. Perhaps Steve is a bit dense.
Yet another solution, proposed by William Dudley of the Federal Reserve, was to use fiscal methods to stimulate a rebirth of production within the US, and this is the one that Trump fell for and cut corporate taxes, allowing companies to repatriate their foreign earnings tax-free. Did this work? Of course not! Instead of investing in production, the companies used the money to buy back their own stocks, allowing their major stockholders to sell their shares profitably at public expense. Here is Alice Walton, 10% owner of Walmart, liquidating over 700 million of her stock in just the month of March.
We can be sure that Alice Walton won't be investing this 700 million in retail stocks. Was it stupid of Dudley and Trump to think that this plan would ever work? Apparently so.
And so here is where the plan to "make America great again" currently stands. The economy is tanking. The Federal Reserve can't pull it out of the nosedive by lowering interest rates because they are already too low. There is massive carnage in the retail sector and numerous US companies are about to go bankrupt. The once great General Electric has been kicked out of Down Jones and is busy selling its crown jewels to the Russians. What is there left to do?
Enter Janet Yellen, the former Federal Reserve chair, with a plan that is truly stunning in its stupidity. She proposes that the Federal Reserve intervene and start directly buying up corporate debt using newly printed money. Note how Yellen's plan beautifully combines the stupidity of Bannon's plan (pulling the rug out from under the US dollar) with the stupidity of Dudley's plan (giving corporations another chance to buy back their own shares so that their major shareholders can continue bailing out and making a profit at public expense). Here's a chart showing how well that's going even without Yellen's brilliant suggestion.
This dearth of non-stupid ideas leaves Trump bouncing around in his padded cell issuing stupid tweets such as the following: "Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!" Meanwhile, he banned US heavy oil imports from Venezuela (needed to make diesel) while US light oil exports (from fracking) are running into problems because of low quality, investment in fracking has fallen off a cliff, and energy companies that are in the fracking business, most of which never made any money, are reporting that there is a shortage of productive new places to drill for oil. It is stupid to think that tweeting will fix any of these problems.
To summarize, this ship of fools is taking on water and all of the proposals voiced so far are stupid ones and amount to attempting to bail it out using a sieve. It's really nauseating to watch! It makes me want to fly back to that beach and there to subsist on coconut milk, fresh-caught fish and tropical fruit, and to never connect to the internet again.
But I'll suck it up and carry on as before. Tuesdays will still be freebie days, while on Thursdays I'll treat my faithful supporters to grand new visions. Coming up next: the human ethnosphere, as an evolutionary aspect of the biosphere—a topic I thoroughly reserached while lying on the beach. It holds the key to understanding the life cycle of nations, some of which are full of energy and drive while others are well past their prime and run by some manifestly stupid people.