James Kunstler offers his perspective on what President Trump is trying to accomplish.
One reality we struggle with is the doleful fact that there is no work-around for the nation’s monumental debt. Since it can’t possibly be paid off, there are two stark paths for it: default and ruinous deflation (that is, money vanishes and the nation goes broke); or a futile attempt to inflate it away with more fake money creation (you’ll have money, but it’s increasingly worthless, so you’re effectively broke). Either way, you’re broke. In the meantime, the remorseless interest that has to be paid on $36.2-trillion squeezes out everything else we’re supposed to care for as relates to the common good.
Every broke-ass family or individual person knows how debilitating money-worries can be. And since unpayable debt is the common denominator across all of Western Civ, this perhaps explains the gross, suicidal mental disorder displayed lately by leadership all across Europe, North America and Anglo-Oceania. Europe, especially, exhibits behavior that is completely cuckoo — inciting war with Russia, inviting in murderous hostiles from foreign lands, and sadistically policing their own citizens.
The exception is Mr. Trump, a businessman-outsider to government trying to pull off an escape from the deadly debt quandary. It’s probably impossible, but he is trying nonetheless. It has three main features:
1) to readjust trade relations that, in theory, would restore industrial production across the land — a bootstrapping operation to kick off “growth.”
2) to engineer a severe re-set of the money system that would effectively amount to defaulting on debt but somehow without the feature of disappearing money. At best, this would induce some kind of fall in living standards, but mostly among the small sector of financial buccaneers who thrive on swindles and the Boomers living on investment accounts (figment wealth), who are now dying off anyway — which is to say, Great Depression Lite. And:
3) the least understood feature of Trumpism: to decouple the USA from the resource scarcity in the rest of the world, and the consequent strife it’s inducing, and withdraw into a sort of Fortress North America that can somehow carry-on self-sufficiently while everybody else collapses.
As big pictures go, this is a pretty wild one, stupendously ambitious, risky, and perhaps improbable. But what do Mr. Trump’s domestic opponents have to offer? To go back to their asset-stripping operation with its insane sideshow of race-and-sexual hoaxes and hustles? ... And despite his daunting agenda, Mr. Trump at least presents a sense of confident determination to get the country righted in some fashion, to recover a sense of purpose and enterprise after years of feckless, dissipative drift into the hallucinatory madness of the Left. You must give him a chance. There is no one else right now with no other way.
There's more at the link.
I'm not an out-and-out Trump fan. I've had reservations about aspects of his personality, and his policies, and I continue to have them. However, I'll be the first to admit that he's done a spectacularly good job at upsetting the progressive left-wing apple-cart that's dominated our nation for far too long. He's done so many things right that I'm more than willing to suspend judgment on things where I think he's made flawed decisions, in the hope that over the long term, he'll bring all things into balance once more. He's certainly achieved more in five months in office than many Presidents have achieved in an entire four-year term.
The question is, has the rot gone too far? Are the American people willing to work hard to generate a better future for themselves? There's a real question mark over that. As Mike Rowe has pointed out, there are millions of jobs available, but even more millions of Americans no longer want to work. In so many words, despite all the excuses and weasel words, in reality they've grown used to living on handouts and expect to be allowed to continue that lifestyle. That's simply not sustainable; yet without a change of heart to bring many Americans back to the workforce, our economy's transformation and growth will be unsustainable. We certainly won't be able to remove most of the illegal aliens from our midst, because our economy won't be able to function without them. All of us, as individuals and as a collective, have to put our shoulders to the wheel, because without that national effort, nothing President Trump is trying to achieve will, in fact, be achievable.
All that funnels back into our crushing, unsustainable national debt, which we've discussed at length over the past few days. Paying down that debt requires massive economic growth. Economic growth requires not only hard-working, intelligent leadership, but also a willing workforce that is (or is willing to be) trained in the complex skills required for a modern production environment. Leadership alone won't do it, just as a workforce alone won't do it.
Can MAGA bring the two elements together, to make it happen? We're going to find out, over the next year or two.
Peter
26 comments:
If Mr. Kunstler, or anyone else, thinks Trump is at all serious about dealing with the debt issue, they are out of their cotton-picking minds.
If you're actually serious about dealing with the national debt, part of it is dealing with the hundreds of billions of dollars lost to outright tax evasion, which means, at the very least, not taking an axe to the IRS, which Trump has tried to do.
No one likes being taxed, and no one likes tax collectors, but a weak IRS benefits no one except actual tax cheats who are trying to freeload off the rest of us.
Sorry Peter for the long post but it's important, friend.
A nation can survive its fools, even the ambitious. But it cannot survive treason from within....for the traitor appears not to be a traitor...he rots the soul of a nation...he infects the body politic so that it can no longer resist.
Marcus Tullius Cicero
A house divided cannot stand. More than half the "Government" is well employed protecting THEIR GRAFT, their "rice bowls" and so on.
More than half of the POPULATION of America is receiving "Public assistance".
America stopped making stuff for the most part decades ago, coasting on the wealth and power of our WW2 "Win" and Economic strength from Bretton Woods agreement and Kissinger's Petrodollar.
We "Produce DEBT" and the world bought it as WE were the World Currency.
SNIP
You may not know it, but something major went down recently that should have every American paying attention. The US government tried to borrow $16 billion through a routine Treasury auction.
But it turned into a complete disaster.
So bad, in fact, that the Federal Reserve had to quietly step in and buy $2.19 billion worth of bonds that private investors didn't want.
And here's the other thing…
This $2.19 billion purchase wasn’t an isolated event. Just two weeks earlier, on May 8, the Fed bought another $8.8 billion in 30-year bonds. That followed a flurry of buying activity the week before, when they snapped up $34.8 billion in Treasuries. That’s roughly $45.8 billion in bond purchases in a matter of weeks—and the month isn’t even over.
To put this in perspective: the Fed's own policy states they're reducing Treasury holdings by just $5 billion per month. Yet here they are, buying nearly ten times that amount in under a month. This isn’t portfolio management—it’s stealth quantitative easing (QE), aka money printing. Plain and simple. As MarketWatch commentator Charlie Garcia put it: "It’s monetary policy on tiptoes."
Who is lending money (and the stuff NEEDED to build factories and train workers) when you're a dead beat?
We are in fatal trouble, friend.
The lack of desire to work and EARN a wage is probably the worst effect the COVID lockdown has made long term. People were paid to stay home and people became accustomed to doing without. Why work if your government provides a parachute to catch you.
That is why many Third World people work ethic is so strong. Their governments did not provide hardly any benefits - sink or swim, your choice. No wonder why they would rather live here.
Trump has a lot of work and a long way to go - I hope his supporters give effort to help him succeed.
"Paying down that debt requires massive economic growth"
Yes, and I can just see tiny signs of that little thing happening, till the next career thief gets in that office.
It also requires a just as massive dedication in congress to cut spending drastically. Really hard core waste and fraud eradication, and fat cutting. Have you seen even the slightest indication they are even considering that?
I am reminded of what I saw in Commanding Heights in my econ class; what happened in Germany and Bolivia. And once again I find myself thinking that America needs a version of 'shock therapy' if we want to prevent an economic collapse.
Hey Peter,
I had several years ago did a blogpost on the "CCC" and the mindset of the average American, "Fair Days Work for a Fair Days Pay". Sure some of the work was "Make Work" but just staying home and collecting money was considered "scandalous" in society and you would be scorned by most everyone else. People wanted to work. Today there would soo many people trying to hustle and scam the system and get money and NOT work, to me shows a generational and societal rot that would take several generations to cure, like major catastrophe and the money tree stopping and people having to work, but a large segment of the population would just riot and steal rather than work, and the government(such as it were) would have to declare martial law and suspend freedoms and the age of the warlord would be here because our rights would never come back.
Mr Kunstler throws dismisses one (in my eyes) problem:
there are a number of us in the Silent (pre-Boomer) Generation who diligently put aside money and invested it for our old age (the remainder being an "estate" for our kids) only to find that we're now paying over $2 for what used to cost 20¢ when we were 30 rather than an unable to work/earn 80.
Would Mr Kunstler enjoy being the Judas goat leading us to the knacker's yard?
A Hundred Dollar bill won't last till Thursday!
Renegotiate all outstanding US sovereign debt. The debt is only as permanent as the system that created these now- unsecured, inadequately serviced obligations. The way it's going now, It won't be paid down until it's cancelled along with all other regime debt in a general currency collapse. This will be worse for Treasury creditors than any other solution, and the threat of completely valueless sovereign securities in the biggest reserve currency will cause the creditors to seriously consider accepting a lesser interest rate on this debt, to be renegotiated from a position of relative strength such as we have under Trump. Everybody who owns treasuries is scared of Donald Trump, we should take advantage of this while we've got him. Sooner or later we're going to have another moneyblowing cowardly democrat "Dominioned" into office. Before that happens, let's say, "accept a 1/2 to 1% return on your us treasuries and we'll do nice stuff for your country" They'd get a nominal payout, be first in line for some American style largesse, preferred nation status, tariff exemption all the things we used to give away for nothing. Latin American debt held in the US used to routinely default as a renegotiation tactic. But we think we have to wear the white hats. We do not. We're the big boys. The preferred outcome would be that the creditor nations would understand that it's preferable to have a low yield functioning sovereign debt market in the reserve currency and a little less interest paid, if it stabilizes the system and allows for realistic planning instead of recurring bailouts.. Central banks wouldn't be loading up on gold if interest bearing sovereign debt was worth holding for the longer term. I have some gold and silver, but I wish it was like 1963 and they're just coins in the till that nobody wanted to mess with because the paper dollar was highly valued everywhere. Those were good times .We could have that again.
Rick m
"but even more millions of Americans no longer want to work."
I have to admit, I kind of get it.
I've been working all my life...on the farm starting when I was big enough to be assigned chores and for a paycheck since I was 16. I'm now 60 so that's 44 years of working for a paycheck.
Don't get me wrong, I don't begrudge it. I was selling my labor to others for the money I needed to live my life. That's the way it works. I understand. The alternative is that I grow my own food, make my own clothes, create my own energy, etc. Much more efficient to specialize and buy what I need from other specialists.
I have no problem with the way capitalism works. The problem is this: for those 44 years, a significant amount of money has been taken from my paycheck every year to pay for the "retirement" of my elders with the understanding that the favor would be returned to me when I get too old to work.
Personally, I haven't believed that promise for decades, so I haven't depended on it...I've delayed gratification and invested and saved to try to have enough money that when the time arrives that I am no longer capable of producing a product for which employers are willing to pay, I can sustain myself in my dotage.
But what has that gotten me? I've got money in my retirement accounts, and that money is still growing and probably will be for at least the next ten years, but the value of that money is decreasing every year. Some years faster than the growth of the investments.
The debt bomb is going to explode at some point. I believe it's going to happen in my lifetime. When that happens, all those investments will be gone. How am I going to support myself then? I'll be too old to work, too old to raise my own food, and I'll have nothing to fall back on. I'll just starve.
"Buy gold" they say...but that's just as risky. If you have physical gold, it can be stolen (by thieves or the government). Plus, you're assuming that it will still be valuable to people after an economic collapse. Maybe it will, but I'm pretty sure you can't eat gold. Will it retain it's value, or will you be trading an ounce of gold you paid $3k for, for a chicken? How long will that last you?
If you have "gold investments" you're buying a piece of paper in which the investment company promises you a certain amount of gold in exchange for the paper...which is great until the economy implodes and they go bankrupt. Your piece of paper means nothing. You think those gold investment firms have a vault full of gold bars to back up all the pieces of paper they sell? If so, I've got a nice bridge in Brooklyn to sell you.
But I digress. The point is when the economy goes, it's going to be ugly and all my savings is going to mean nothing.
I'm pretty disheartened by that fact and the only thing that keeps me going is the hope that it will wait until after I'm dead and buried before it happens.
For someone who's 25? They're facing a lifetime of labor and effort with full confidence that it will be for naught. That at some point in their lifetime, the debt bomb is going to explode and everything they've worked for will be gone.
Not a whole lot of incentive there to put the nose to the old grindstone.
Personally, I'm not a fan of being on the receiving end of charity, but for kids who've been told their entire lives that government handouts are "entitlements"...I kind of get it.
Mike Rowe does not allow for the fact that a lot of US employers have utterly unrealistic expectations of what to expect from workers. I was turned down for "not having experience" when I was fresh out of college---where did they expect me to get experience? The Monkey Ward catalog? Not to mention expecting workers to be available at all times (connectivity is not always a boon, believe me!) not granting raises to stay in pace with inflation, and expecting workers to come in on Saturdays to make up for having had Christmas and Thanksgiving Day off.
The IRS has ruined more lives, more businesses, and more families than any disease, accidents, or terrorists in the United States. You don't have to take my word for it; just go and ask anyone who this giant malevolent beast has casually rolled over. Once it happens, your life is done.
The IRS should be dismantled and its leaders and enforcers executed, preferably by firing squad in the public square.
It is clear that the Dems, Deep State, and UNIPARTY does not want anything that Trump does. This is why the Judiciary is on working against every Trump action no matter if it is correct law.
The biggest change that Trump is doing is adding tariffs to all countries that have had them on the USA. Tariffs have killed almost all industry and products from being produced in the USA.
I was born in the late 50s. My Dad, which ended up working for a company in California and worked his way from the bottom to becoming a Manager over many many years and retired but later died. His plant was shut down about 10 years later and moved out of the country. This is common story of industry in this country.
Now a person in a job is usually in it for about 10 years and most times it is some sort of retail slant. COVID showed that China produced the virus but also all the Big Pharma vaccines are from China so we have a National Security Issue of health. There are also other issues for various industries to produce all sort of products needed for the USA without needing other countries.
No shortage of potential workers if illegal immigrants were excluded. Plenty of non-working US men.
https://cis.org/Report/WorkingAge-Not-Working-1960-2024
"Mike Rowe does not allow for the fact that a lot of US employers have utterly unrealistic expectations of what to expect from workers. "
Mike Rowe's efforts aren't about college grads...exactly the opposite. His point is that we need workers in blue collar jobs and you don't need a college education to be successful if you're willing to work and maybe get a little dirty.
This isn't directed specifically against you, I don't know you or the area you're in, so this may not apply at all, but I can speak to my area and my industry. I work in a tech industry and I can say that we struggle to find suitable employees. We don't struggle to find applicants, we struggle to find *suitable* applicants.
At any given time we'll have two to three entry level positions and one or two "experience required" positions open. Most of the applications are for the "experience required" positions whether they have the requisite experience or not. We often end up filling the entry level positions from a staffing service. We also hire a lot of summer interns from the local universities (once we even hired a highly motivated high school senior as an intern) and some of them end up becoming full time employees after they graduate...but for some reason, entry level people don't like applying for entry level jobs.
I suspect they're just expecting to be paid a salary equivalent to someone with experience even though they don't have any. The problem is, an entry level employee in our industry isn't really going to start adding value to the company until they've got 6 months to a year under their belts.
We're obviously not going to pay "experienced" level salaries to people who are providing negative value to the company. That's a good way to go bankrupt.
I got laid off before COVID. I almost had FY money, so I skipped the corporate rat race and took low-level jobs such as working at a big box store. When I was 16, I worked in a cafeteria and had a better time, better pay(adjusted via the McD index), and better benefits (all I could eat). These days, management is not happy unless they are making the work soul-crushing and painful. Today, companies are about financialization and profit. All employees are alike, cogs in the wheel, and soon to be replaced by AI.
You want people to work, treat them like they matter and give them the ability to help the customers. Cherish people who show up and do the job. Celebrate workers who solve problems. Get rid of DEI, what a poison that was in the workplace.
Productivity has gone up 2% for the last 50 years. Middle class should have 1 working spouse, not 2 with 2-3 jobs each. Taxes are part of the financial rape. Friend who got his CPA calculated cost of hidden taxes and concluded the middle class tax rate is around 70%. As a farmer, the middle class are the cash crop. The poorer your MC the poorer your tax base, the poorer your country.
Trump needs to root out the traitors and grifters in Congress, then the states, then county and local govt. Its a huge job and he has few investigators he can trust. Some may even want to crash the economy, better to rule in Hell than serve in Heaven.
We can avoid default, but so many ducks have to be in a row and in a timely manner that I am not hopeful. Still, despair is a sin. Every day I try to do something that will put me in a better position for the future, and God has blessed me to be able to do so.
I tried these prompts with Grok:
"Make a chart for the US, EU, China, Japan and India over the last thirty years. For each nation, for each year, subtract their annual government spending from their annual gross domestic product, then divide by the annual average cost of 1 gram of gold in that nation's national currency.
Please make an additional graph representing the national debt for all five countries over the last thirty years, dividing each country's debt by the annual average cost of 1 gram of gold in that nation's national currency.
Please make a graph for each of the world-wide major stock markets over the last thirty years, with their annual average prices divided by the annual average price of 1 gram of gold"
Grok make a lot of apologies about scarcity of data and interpolation, but it did make the graphs.
Call it: a virtual return to the gold standard.
I would also like to chime in on something I think most commenters have overlooked, and I know the author of the post overlooked.
The phrase is not, "not willing to work." The actual phrase is "not willing to work for starvation wages." If a company is not willing to offer wages that allow someone to live, not even thrive, but simple live. Then no one will take the job. Simple as that.
Are there a bunch of lazy people, yes, obviously. Every generation has them. However the difference is that a sizable chunk of the jobs of today are not offering to pay anyone anywhere near where they should be.
A few years ago there was a fight to raise the min wage. I was against it, as it would effective destroy the economy. Cali did it and destoyed large chunks of their economy. However they viewpoint was not wrong.
In 1913, the minimum wage allowed a man to have a home, a car, a stay at home wife, and two or three kids, plus at least two vacations a year. Today on the minimum wage there is a decent chance you will starve to death. Average wages are not that far above minimum wage. Add that in to the price of everything going bad, and I do not
blame a single person for refusing to work.
A man should not be a slave to survive. If a company is not willing to pay a survival-able wage, then the company should fail due to lack of workers.
- W
From my experience in public accounting, my clients who ended up in trouble simply didn't pay their tax bills. It wasn't a matter of couldn't, they made plenty of money, but they'd spend it on everything else (including vacations and shopping habits) before paying the IRS. I could and did get them out of trouble (and on payment plans) several times, but eventually the IRS would lose patience and I couldn't really blame them.
If there's no enforcement of the tax laws, the rest of us honest folks shoulder a heavier burden to make up for the scofflaws.
There is no way that Congress will allow Trump to implement the DOGE cuts. Too many bowls depend on all of those gimmes.
Zimbabwe and Venezuela, here we come !
No one incited war with Russia. Putin started the war for imperial reasons. Putin is the man that started the war, and keeps it going. He targets civilians, schools, hospitals, Churches. Putin is nothing but deeply corrupt scum.
Good news is when your paper investments return to intrinsic value you won't suffer as long as the 25-year old.
@Anonymous 11:17: I smell barnyard animal excrement. People who run afoul of the IRS to the point where their lives are ruined didn't make mistakes on a tax form, they deliberately skipped out on their taxes. I have no sympathy whatsoever for them or for you, because it's pretty obvious why you don't want the IRS around.
"In 1913, the minimum wage allowed a man to have a home, a car, a stay at home wife, and two or three kids, plus at least two vacations a year. Today on the minimum wage there is a decent chance you will starve to death."
There was no federal minimum wage in 1913. That started in 1930's. There were some state minimum wage laws before that, but they mostly applied to women and children to prevent exploitation (and to protect the jobs of men...why would you hire a man for a job if you could hire a woman or child for 1/4 the wage?).
The federal minimum wage was to prevent exploitation of people who were desperate during the depression and it was likewise limited to just certain groups of people and types of jobs.
My first minimum wage (corporate - non farming) job was at McDonalds when I was in high school circa 1980. The minimum wage at that time was $3.10 an hour (if I remember correctly, it went up to $3.35 an hour shortly after I got hired). Even in the 1980's economy, not enough to raise a family, but excellent for a kid living at home who just needed money to keep his muscle car in gas, bribe adults to buy him beer on the weekends and take a girl to a movie from time to time.
Again, I can only speak for my area, but most of the fast food, convenience stores and even big box stores around here are paying well over minimum wage because they can't find workers otherwise. And most of them have permanent "now hiring" signs in the windows.
Of course, the more they have to pay workers, the fewer of them they can afford to hire and keep their prices competitive and the end result is that the ones they do hire end up overworked and burn out quickly.
At any rate, minimum wage jobs are the lowest level of entry level positions. They are minimum wage for a reason: no experience, no skills and no job history required.
To be blunt: if you're trying to raise a family on a minimum wage job, you've made some poor life decisions up to this point. Unfortunately, facing the consequences of poor decision making is never fun.
"Good news is when your paper investments return to intrinsic value you won't suffer as long as the 25-year old."
Very true and somewhat of a relief. Unfortunately, I have kids and grandkids for whom that is not true. I fear for them, but protecting them is not within my power.
Again, I just hope I don't live to see it all come crashing down.
We need to enter into long term paths towards solutions.
The push to have a whole lot of fixing right here and now is a treatment for the debt-disease that will likely kill the patient, and in the process start a series of wars.
Every step taken needs to be incrementally better than the path we were on before, and our timeframe needs to be decades, rather than months.
Post a Comment