"All forward decks are now open for swimming"
Coronavirus imploded the global economic model known as Globalization. It was the last nail in the coffin, and a long time coming. Only ever-larger monetary bailouts post-2008 kept this fraud going this long. Globalization was never about solving global poverty it was solely about monetizing global poverty. Instead of raising Third World living standards, it lowered the developed world standard of living by imploding the middle class. A highly profitable, albeit temporary, industrial arbitrage brokered with massive amounts of deflationary debt.
Few if any of today's well known economists have ever openly admitted that it was a failure. Because from their lofty ivory tower, it was all going so well, for them. Fuck everyone else. Not only were their asset values constantly elevated, but their cost of living was constantly falling as well.
Globalization and its vocal supporters, were human history's biggest example of survivor bias. The people who extolled the benefits of the model were those who were its prime beneficiaries. Bill Gates informed us in 2014, (and more than once since then) that by any measure the world has never been better. The richest man in the world is apparently the official spokesperson for the slums of Calcutta. Because who better qualified to know what it's like to live at the absolute bottom of the Ponzi scheme, than the guy at the absolute top. His entire life has been a fantasy.
The moronic media and the dunces at large were of course complicit in this long running scam. Never once questioning official narratives, even as the economic body count stacked up.
Always the same failing rejoinder, "This is the best system ever invented".
Well now, this fantastic system is imploding in broad daylight. Even as moronic gamblers are currently of the belief that we have successfully transitioned to a totally online virtual economy - The truth is the EXACT opposite, we have now "successfully" transitioned to a totally offline economy. The global economy is shutdown and it's never coming back in the same way as before. This is a new age of frugality. The average household entered this fiasco totally unprepared. Now they are facing extreme economic uncertainty. As we see below the personal savings rate is at a forty year high due to the lockdown. However, social distancing measures will make this re-opening an economic dud. Economic activity will be a fraction of its former level. This lockdown has changed peoples' work patterns and consumption patterns, perhaps forever.
This week the Fed confirmed that they are NOT considering negative interest rates, which means that REAL interest rates are rising due to extreme deflation.
The deflationary mindset is fully in place. Meaning people know that if they wait they will get better prices on EVERYTHING. Want a used Ferrari? Wait 12 months for the 70% off sale.
The average business is even far worse off than the "consumer". The vast majority of the bailout money was targeted to workers not businesses. Businesses of all sizes are now twisting in the wind. QE won't work in this environment due to the total collapse in demand. Under these prevailing conditions, the economic multiplier is the limit approaching zero. Meaning that money is not circulating amidst businesses, because the majority of businesses are shutdown.
Meanwhile, the Democrats keep pounding away at the universal basic income, while Republicans keep pushing back. I believe this will be the central issue of the 2020 election. Over the coming months, Republicans will be forced to choose between mass poverty and failing capitalism. All of their failed ideologies are on the table now. And their political future is the table stakes. If they pull the trigger and vote for FULL MMT it would be tantamount to admitting they've abandoned capitalism. The alternative is ever-deepening poverty.
Either way, the party goes under the bus, because today's Conservative "think tanks" such as the Heritage Foundation are adamant that there should be no more fiscal stimulus for anyone.
"Individuals and businesses react to new government programs by scaling back their personal spending and shifting—rather than expanding—production, canceling out any theoretical benefits. Instead, Congress should allow the private sector to drive the recovery by removing barriers preventing businesses from expanding, hiring, and creating new products."
How many times have we heard this same bullshit in the past 40 years - we need to remove barriers such as labor protections and taxes to allow free enterprise to thrive.
“The problem is that quality of the stock of jobs on offer has been deteriorating for the last 30 years,”
The “whole story” told by the index, he adds, is “the devaluation of American labor.”
Labor share of the economy:
This isn't about "stimulus", this is about survival. Which means that these traitorous sleaze bags at these Stink Tanks will need to find a new country to bilk in their next life, because this one IS OVER. I see a much scaled down conservative movement on the other side of this collapse. One that constantly propagates the narrative that if we had only squeezed the middle class more we would have reached the promised land of broad based prosperity. The same lethal delusion they've been propagating for decades. Eventually someone dumb enough will come along and believe them again. In the meantime, today's Republican useful carbon is spent.