The Making of the American Mind

I forget now what somebody said that reminded me of this. lol

President Trump said Friday his choice for the next chair of the Federal Reserve should consult him on setting interest rates.

Trump added that he would like to see interest rates at 1 percent, “and maybe lower than that” this time next year.

LBJ destroyed everything when he started this in 1964. The inflation of the 70s didn't end until pure hell was unleashed by Paul Volker ending in 1982. It's nuts. All of the politicians are the same. It's literally the most important thing and nobody understands it.

Now look at this:

A Tax Base Built on Asset Bubbles

One of the most uncomfortable realities, one that neither party likes to confront, is how deeply America has come to rely on asset inflation to keep the fiscal lights on. Our tax system leans heavily on capital gains, as if markets will forever levitate, and as if a country can treat stock indices as its primary engine of revenue. Meanwhile, the wealthiest corporate titans legally arrange their finances so that effective tax burdens fall to levels that would make a middle-class household blush.

This is not an aberration, it is the blueprint. And it is wildly unsustainable.

A Crisis Decades in the Making

Much of today’s instability is the result of 30 years of policy half-measures and political evasions. America papered over structural stagnation by pushing globalization to its limits, exporting disinflation to the rest of the world, while importing cheap goods and congratulating itself on the “miracle” of low consumer prices.

That arrangement worked, until it didn’t. The global economy outside the U.S. absorbed the toxins of our overconsumption, suppressing their own growth to feed ours. Eventually, reality reasserted itself. The façade cracked.

They force us to use government money for geopolitical reasons.

They lie about the inflation rate. It's double what they say it is.

Then they lose control of the system like 2008, except they just print more money to "fix" it.

Then nobody can afford anything.

Then everybody whines about socialism and populism taking off.

RufusRJones (View Comment):

A Tax Base Built on Asset Bubbles

One of the most uncomfortable realities, one that neither party likes to confront, is how deeply America has come to rely on asset inflation to keep the fiscal lights on. Our tax system leans heavily on capital gains, as if markets will forever levitate, and as if a country can treat stock indices as its primary engine of revenue. Meanwhile, the wealthiest corporate titans legally arrange their finances so that effective tax burdens fall to levels that would make a middle-class household blush.

This is not an aberration, it is the blueprint. And it is wildly unsustainable.

But will it make money?
Good question. There is definitely a market for AI, but how big is it? Most AI companies are burning through investment cash like it’s going out of fashion. OpenAI has committed to spending about $1.4 trillion on data centres, with an income of less that $20 billion. [emphasis added] Clearly the math doesn’t math. 🙂

I keep reading stories about the total market for AI growing to the hundreds of billions, which sound great, but that’s still not $1.4 trillion being spent by one company.

Clearly there will need to be a big correction at some point. The proverbial bubble will burst.

AI is definitely interesting, and has some useful applications, but let’s not get this twisted. The AI bubble will burst, and it will bring down the US economy, and therefore the world economy with it for a time.[emphasis added] Hopefully a few years later we will start to see value coming from it, provided we’re still around to see it.

As a fluent speaker of several European languages, not to mention English, which may or may not be included, I still love the old country and, I confess, am inclined to defensiveness when it comes under attack from my fellow conservatives...But when I read Charles C.W. Cooke's recent article in National Review, I was in no position to offer any refutation. One can only mourn--and faintly hope...

The discussion of the Declaration of Independence was positively brilliant. I see that I have much to learn.

Just to be obnoxiously picky: For the second time in two days, I have heard "very unique" from commentators/fellow wordsmiths I much admire. Ouch!

Wolfsheim (View Comment):

Just to be obnoxiously picky: For the second time in two days, I have heard “very unique” from commentators/fellow wordsmiths I much admire. Ouch!

Jonah Goldberg had a riff on this a few decades back.

All snowflakes are said to be unique. But if you come across a snowflake that is 6 feet tall and has a surface temperature of 180 degrees, that would be a very unique snowflake.

Miffed White Male (View Comment):

AI is definitely interesting, and has some useful applications, but let’s not get this twisted. The AI bubble will burst, and it will bring down the US economy, and therefore the world economy with it for a time.[emphasis added] Hopefully a few years later we will start to see value coming from it, provided we’re still around to see it.

The Fed has a stupid mandate, which is as stupid as communism: low unemployment and controlled inflation all of the time. Now they have three mandates. The third one is the stock market. If the market goes down more than 20%, everybody's going to freak out and everything will collapse because the system requires endless credit growth which requires endless inflation.

They supposedly measure inflation, but if you look into it, the whole thing is absurd.