The last 100 years has been the era of the American Empire, which is monetized through the network effects of the dollar and dollar-denominated-assets. We don't have ships full of Potosí silver, but we do have 10% yearly S&P returns in an economy growing 3%. Extrapolating another year of that is probably reasonable, extrapolating another 100 years of that is probably not.
Yeah, it's easier to analyse the past than predict the future. I agree that I made a statement about the luxury of wealth the last century.
I don't know if the S&P500 will grow at the same rate the next century, but I am willing to bet a beer that stocks in wide index founds will grow faster than both inflation and average salary for the next century.
There are a sizable number of levers that raise the ceiling by lowering the floor. For some reason, intentionally giving all the power to people near the ceiling makes pulling these levers very popular. Not sure what the reason could be. Maybe we'll figure it out one day.
Not only that, but it provides opportunity to create levers such as you describe in the first place, due to the concentration of power and influence. Funny how that part of Adam Smith isn't worshipped as much
This blows my mind. $400B in annual revenue and they can't spare the few parts per million it would take to spruice up the foundation of their user experience.
This is speculation based on external observation, nothing internal other than rumours:
A big, increasing over last decade, chunk of that is fear that they will break the compatibility - or otherwise drop in shared knowledge. To the point that the more critical parts the less anyone wants to touch them (heard that ntfs.sys is essentially untouchable these days, for example).
And various rules that used to be sacrosanct are no longer followed, like the "main" branch of Windows source repository having to always build cleanly every night (fun thing - Microsoft is one of the origins of nightly builds as a practice)
Did you miss the Infrastructure act that spent $500B on roads, ports, and water projects? The CHIPS act that spent $50B on decoupling and R&D?! The Climate & Energy act ("IRA") that spent $400B on clean energy subsidies??!!
I can understand the perspective of wanting more, but the forward-looking policies of the last administration were in a different galaxy compared to those of the current administration, where the big plan is to chop USAID, boost deportations, and cut capital gains tax.
This is the difference between corn and the cob and corn in the toilet. No, it is not the same.
The problem is that China could have built the same infrastructure for $100B and in 25% of the time. Pumping subsidies into our bloated bureaucratic nightmare of a system is only going to make the lawyers and bureaucrats who are its gatekeepers fatter.
TSMC Arizona Gigafab, Intel's Chandler fabs, Micron's Boise megafab, these are all giant buildings full of equipment cranking out chips or credibly preparing to. I'd hazard a guess that more than lawyers were involved.
Oh, but trollbridge saw a lawyer once! That's it, phone it in, shut it all down, corruption proven, the gigantic buildings must be all be a mirage. Trollbridge saw a lawyer and that disproves everything!
In the google results, if you had bothered to google. It turns out $50B was enough to tip the investment calculus on half a dozen large projects and a dozen or so smaller ones.
So tell me: was it learned helplessness or partisan hackery that made you severely underestimate what turned out to be possible?
My opinion comes from my personal experience with CHiPs funded projects but admittedly thats merely anecdotal knowledge so I’m very glad to hear that Biden’s “biggest ever!”(tm) inflation reduction package met its goals and wasn’t just money printing and political cronyism. Imagine where we would be without all those new chip fabs and infrastructure fixes you mentioned finding in your Google search. You’re right, that was 50 billion, give or take, well spent!
The beneficial owners of the US economy sold our industrial manufacturing base to the Communist Party of China because the price was good. China got our hard power and US capital owners got to break the back of the US labor movement. A win-win deal for the ages.
The "centrally planned growth is hollow and doomed" narrative doesn't seem to fit China like it fit the USSR. Did the USSR ever make 80% of the stuff in your home?
As for making friends, the US empire is highly atypical in its "friendliness" and it's entirely plausible that its successor will revert to the mean.
> Taking the US dollar as world reserve currency for granted.
It's the exact opposite: US citizens got fed up with the domestic problems created by Triffin's Dilemma and wanted out.
Remember, the "imperial revenue" in our model doesn't get helicoptered into the economy, it pumps assets. Stocks, bonds, and real estate. Your share of the imperial loot is proportional to the value of the assets that you own, and worse, even if you don't have a big house and fat brokerage account you still have to compete with people who do and they're going to bid up the price of anything that doesn't have highly elastic supply. Health care, housing, and education are the ones creating problems. America got a great deal, but most Americans got a raw deal: costs went up, income didn't, misery ensued.
Pumped bonds allow (force, really) the government to run deficits (homework: what breaks if they don't? It happened in Clinton's term, you can go and check) and to some extent that distributes the money. There's the whole services narrative which held that the services sector would pump hard enough to backfill manufacturing, but it never did. The people who got the door slammed in their face are no longer convinced that the door is their path to prosperity and now they want to tear the whole thing down.
If you want to hear an actual economist talk about this, see "Trade Wars are Class Wars" by Klein and Pettis.
The fact that successive US governments choose to use their economic hegemony to pump assets rather than invest in their education and healthcare, or at least in their infrastructure, doesn't contradict the fact that it was a great gift, engineered since Bretton-Woods, confirmed at the Smithsonian institute and a few years later at the Kingston accords (and btw, had nothing to do with gold standard but the convertibility of the Dollar. The gold standard realistically ended in the 50s (died for the 5th time in the US alone), and for the 1st time, stayed dead).
True. We could have taxed and spent enough to spread the wealth around. We chose not to, and now the proverbial children who weren't embraced by the village are burning it down to feel its warmth.
I'm not against calling reserve currency status a privilege so long as you are crystal clear on the point that it was a privilege for America but a curse for most Americans.
But Robert Bork and the Chicago School of Economics and Ronald Reagan and the Republican Party assured me that mergers and trusts were good for me! Look, the companies even have self-serving rationalizations scribbled with crayons on butcher paper saying the same thing!
Seriously, though: I cannot believe how high and how far these utterly dogshit arguments flew without pushback and the amount of damage that consolidation has done to the American Experiment. The best time to get a Lina Khan in the FTC was 40 years ago but the second best time was 4 years ago. I just hope the next president picks up the project... though I'm sure the (by then) trillionaires will do everything in their power to stop that from happening.
It's crazy the fan fiction we have allowed to be recon'd into being 'Capitalism' when Capitalist thinkers thought that rent seekers/monopolies were destructive to Capitalist, and that strong government oversight was key part of a strong Capitalist system.
> extract value from citizens for the shared value of the state
This is extremely aggressive framing. It smashes together two wildly different kinds of citizen with wildly different, often opposing incentives and access to power: those who sell their labor for a living and those who literally own the economy. It poses them both in opposition to the government which has 1/5th the revenue of the latter.
If capital is the big bad, this framing is a mind-virus that makes the problem hard to think about and speak about.
> friction
Friction plays a key role in "the unreasonable effectiveness of capitalism." It's a big part of the reason why we can rig the game in favor of capital and not simply have the economy immediately degenerate into "capital rules, labor drools" due to the exponentials inherent in "rich people get paid for being rich in proportion to how rich they are."
Removing friction is not necessarily a net good if it contributes more to distributional problems than it relieves in deadweight loss. Nobody is a fan of deadweight loss, but I'd be a lot more sanguine about eliminating it if I thought we had a credible handle on the distributional problems. But we don't.
"Is the capital being deployed for rent seeking or for taking economically useful risks?" is a judgement call. You won't find it listed in a FRED time series.
When every industry is on a multi-decade streak of consolidation, when McDonalds is about land speculation rather than serving food, farming is about land ownership rather than growing food, airlines are about credit cards rather than transportation, it's not unreasonable to believe that a substantial amount of capital is being deployed towards rent-seeking rather than economically useful risk taking.
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