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Sunday, November 2, 2025

2025-11-02

 **** denotes well-worth reading in full at source (even if excerpted extensively here)


Economic and Market Fare:




................ Jeff deGraaf of RenMac once noted: “In this business, predictions are over-rated, but the mismatch between expectations and probable outcomes are underrated.”

........... I was always taught that when you’re in a bull market, it’s absolutely necessary for investors to ride it – at least until it’s clear that a recession is underway or the bubble is bursting.

Right now, I’m not seeing either.

The goal of investing is to make money. Full stop. Enjoy it while the offense remains on the field.

Having said all that, here are three charts I came across today that definitely raise my risk-management antenna. I flag these dynamics into the yellow “worth monitoring” category.



We live in what Brett Arends claimed as “The Dumbest Stock Market In History,” but I believe it is potentially the most dangerous era. That phrase is not hyperbole as it reflects structural distortion, extreme valuations, and an investor base intoxicated by momentum and narrative. The MarketWatch piece puts it bluntly: “At one level, there is no doubt that this is the dumbest market in history, because at this point it is completely dominated by ‘passive’ index investing.” That dominance means we are now in the most dangerous era where market mechanics, not fundamentals, rule. ............




Global strength has fueled the rally while domestically, participation is poised to continue to broaden


When Guidance Turns to Guesswork

At Macro Anchor, we have consistently argued two things about the Federal Reserve.
First, that policy should focus on demand, not on “supply constraints” that serve as convenient excuses for policy inaction.

Second, that political and fiscal pressures will ultimately force an aggressive easing cycle, one that began in September and, in our view, will not stop until the policy rate reaches around 2.5%, far below the 3.5% still anticipated by markets.

I watched Powell’s press conference, and it was a disaster. The Chairman appeared visibly uneasy, often defensive, and at times incoherent. His body language betrayed uncertainty; his tone, frustration. He jumped between supply and demand explanations, contradicting himself within minutes, and failed to give any coherent guidance to the market. One moment he said the Committee is “taking a step back,” the next he insisted that “policy remains restrictive.” This is not communication; it’s confusion. ...........


Central banks diverge, but all face the same constraint: fiscal gravity

............. Behind the technical language of “duration management” and “balance-sheet adjustments” lies a more political reality. By ending QT and reinvesting maturing MBS and Treasury Notes and Bonds into Treasury bills, the Fed is quietly engaging in yield-curve control by stealth, providing liquidity, funding short-term Treasury issuance, and cushioning fiscal pressures. With public debt above 125 % of GDP, monetary policy is no longer independent, it has become fiscal facilitation by necessity. The real neutral rate is now the one that keeps the Treasury solvent, closer to 2.5 % than to 3.5 %.


Tax your Friend, Yield to your Enemy

A lot is happening these days. This is our second post in as many days, following our analysis of the latest Federal Reserve meeting, which revealed a central bank in total confusion, cutting rates into a slowdown it refuses to recognize. But while the Fed’s confusion reflects domestic weakness, what is unfolding on the trade front shows how U.S. policy abroad is becoming an instrument of financial coercion.

Trump’s trade doctrine has evolved, but its essence remains the same. Instead of tariffs as a means to correct trade imbalances, they have become a weapon to extract capital commitments from U.S. allies. The new policy is simple: invest in America, or face tariffs.

Across allies, the pattern is now unmistakable. The United States is effectively conducting a capital-for-tariff diplomacy, exchanging market access for investment inflows. Altogether, these deals amount to approximately $3.5 trillion in foreign investment pledges over the next five years ..........

.......................... We are now entering a bipolar world economic and monetary order. The United States has locked in its allies through capital coercion and tariff diplomacy, while China is building a self-sufficient, resource-backed, yuan-based sphere. One system trades capital for allegiance; the other builds production and control over inputs.

In this confrontation, the United States has emerged as the clear loser. All China had to do was choke the very start of the global supply chain while exerting political pressure through the temporary import ban on soybeans, a targeted move that hit U.S. agriculture, a key political constituency. The result is a perfect display of asymmetry in game theory


Tariff uncertainty may be waning, but the damage will persist

......... So absent another toddler tantrum, we may be reaching peak Trump tariffs. But don’t celebrate. Trump’s chaotic tariff policies inflicted three types of economic damage: higher prices for American producers and consumers, economic uncertainty, and the global loss of American credibility. Even if the worst in terms of prices and uncertainty is over, it’s clear that Trump’s tariffs have inflicted lasting damage on the US economy as well as the global economic order.

To understand the extent of the damage, let’s begin by taking inventory of the tariffs’ actual effects on prices and the job market. ............



A leading indicator of U.S. non-residential construction activity, published monthly by Dodge Construction Network, shows continued strength in commercial and institutional planning, primarily driven by the data center buildout tsunami that is set to gain serious momentum in 2026. ........




Bubble Fare:


The S&P 500 stands at the most extreme level of valuations in history. As I detailed in August, our most reliable valuation measures – based on their relationship with actual subsequent S&P 500 total returns across a century of market history – suggest that the expectations of investors for long-term market returns are wildly misaligned with the returns implied by discounted cash flows. ................

As I’ll detail later in this comment, the corporate profitability that investors presently attribute to productivity and innovation is actually the accounting result of record government and household deficits. As we’ll see, innovation certainly affects the distribution of those profits, but maintaining this level of profitability, with nearly 90% of the benefit accruing to the wealthiest 10% of households, actually relies massive and sustained deficits in other sectors, which would eventually spell debt crisis and default.

Historically, corporate profits have fluctuated over time. When corporate profits are depressed, as they are during and just after recessions, price/earnings multiples typically soar – but these high P/E multiples have no bearish implications and are uninformative about future returns. Likewise, during economic booms, profit margins tend to be elevated. Normally, that results in seemingly normal-looking P/E ratios, but these P/E multiples are actually dangerous because they’re built on unsustainable earnings.

The worst case is when investors are paying extreme P/E multiples on record earnings, that in turn reflect record profit margins. This type of “double counting” has historically had tragic outcomes. ...................................................................................................................

The current economic environment features possibly the most untethered, and undoubtedly most imbalanced version of this philosophy in U.S. economic history. Yet the outcome has not been faster growth, nor even faster productivity growth. Rather, the combined slowing in demographic labor force growth and U.S. productivity growth has resulted in the slowest 25-year compound annual growth in real U.S. GDP in the nation’s history.


From an equilibrium standpoint, record corporate profits and free cash flow, particularly as a share of GDP, are the mirror image of record deficits in the government and household sectors. Again, this isn’t a theory. It’s an accounting identity. Sustaining record corporate surpluses requires sustaining record government and household deficits.

The problem is that this is a longer-term recipe for debt crisis and persistent inflation. That may be some part of why gold is on a ramp ........................



...................... Investors should be willing to pay high valuations for more growth, but can extraordinary growth rates for a handful of stocks continue? If so, high market valuations make a lot more sense.

Interestingly, some of the Magnificent Seven stocks, which have expensive P/Es but strong earnings growth, may be more conservative than the bulk of S&P 500 companies, which trade at high valuations but have little earnings growth.

To better appreciate this, we use the PEG ratio (Price/Earnings / Expected Growth). This ratio helps make P/E ratios comparable across companies and industries with different growth rates.

The FinViz heat map below shows the PEG ratio for the S&P 500 companies. Notice the sea of red—high PEG ratios — throughout the S&P 500. However, some of the Magnificent Seven, including MSFT, AMZN, NVDA, GOOG, and META, are pretty reasonable.



Opposition to data centres has been rapidly spreading internationally due to their fast-growing resource demands. DCs have been proliferating, driven by the popularity of artificial intelligence.



In fact, the CEO announced during the company’s earnings call on Wednesday, Meta will be spending between $70 billion and $72 billion on AI this year — up from its previous estimate of $66 billion to $72 billion, as CNBC reports.

Unsurprisingly, that cash bonfire isn’t going over well with investors. Meta’s shares slid by more than 11 percent on Thursday, indicating widespread skepticism about the company’s ability to stop bleeding billions of dollars as it races to keep up with the AI industry’s ever-escalating expenditure commitments.

That’s particularly striking because the drop comes in spite of Meta’s revenues exceeding Wall Street’s estimates. In other words, out of control AI spending is starting to rattle investors. .........



As I've established again and again, we are in an AI bubble, and no, I cannot tell you when the bubble will pop, because we're in the stupidest financial era since the great financial crisis — though, I hope, not quite as severe in its eventually apocalyptic circumstances.

By the end of the year, Microsoft, Amazon, Google and Meta will have spent over $400bn in capital expenditures, much of it focused on building AI infrastructure, on top of $228.4bn in capital expenditures in 2024 and around $148bn in capital expenditures in 2023, for a total of around $776bn in the space of three years.

At some point, all of these bills will have to come due. .....................

To be clear, everybody is losing money on AI. Every single startup, every single hyperscaler, everybody who isn’t selling GPUs or servers with GPUs inside them is losing money on AI. No matter how many headlines or analyst emissions you consume, the reality is that big tech has sunk over half a trillion dollars into this bullshit for two or three years, and they are only losing money. 

So, at what point does all of this become worth it? 

Actually, let me reframe the question: how does any of this become worthwhile?Today, I’m going to try and answer the question, and have ultimately come to a brutal conclusion: due to the onerous costs of building data centers, buying GPUs and running AI services, big tech has to add $2 Trillion in AI revenue in the next four years. Honestly, I think they might need more. ....................

Big tech’s lack of tangible revenue (let alone profits) from selling AI services only compounds the problem, meaning every dollar of capex burned on AI is currently putting these companies further in the hole. 

Yet there’s also another problem - that GPUs are uniquely expensive to purchase, run and maintain, requiring billions of dollars of data center construction and labor before you can even make a dollar.

Worse still, their value decays every single year, in part thanks to the physics of heat and electricity, and NVIDIA releasing a new chip every single year. 




“In our opinion, the debasement trade hasn’t really even started yet,” Darius explained. “This is an institutional portfolio asset reallocation. Term premia are about 100 basis points mispriced, inflation is about 50 basis points mispriced, and the positive stock-bond correlation is likely to persist as inflation remains elevated. Those three dynamics are working against investors who still hold too many Treasuries.”

Key Takeaway:  The shift away from Treasuries toward gold and alternative assets is still in its early stages. The real debasement trade will likely begin when the Fed is forced by internal political and external geopolitical dynamics to absorb excess Treasury supply.



Charts:
1:  super duper top secret!!


2: 
3: 
4: 



(not just) for the ESG crowd:


We are hurtling toward climate chaos. The planet's vital signs are flashing red. The consequences of human-driven alterations of the climate are no longer future threats but are here now. This unfolding emergency stems from failed foresight, political inaction, unsustainable economic systems, and misinformation. Almost every corner of the biosphere is reeling from intensifying heat, storms, floods, droughts, or fires. The window to prevent the worst outcomes is rapidly closing. In early 2025, the World Meteorological Organization reported that 2024 was the hottest year on record (WMO 2025a). This was likely hotter than the peak of the last interglacial, roughly 125,000 years ago (Gulev et al. 2021, Kaufman and McKay 2022). Rising levels of greenhouse gases remain the driving force behind this escalation. These recent developments emphasize the extreme insufficiency of global efforts to reduce greenhouse gas emissions and mark the beginning of a grim new chapter for life on Earth.

In this report, we seek to speak candidly to fellow scientists, policymakers, and humanity at large. Given our roles in research and higher education, we share an ethical responsibility to sound the alarm about escalating global risks and to take collective action in confronting them with clarity and resolve. We show evidence of accelerated warming and document changes in Earth's vital signs.  .....................



Imperialism has always come with a high body count. That remains true today with U.S.efforts to retain what is left of its hegemony. Sanctions, warfare (either direct or proxy), genocides, and exported class warfare all leave devastation in their wake.

In many ways US imperialism is similar to other colonial projects that came before it. Yet there is one obvious difference: our knowledge of climate change. Action to slow emissions was always going to be one of humanity’s greatest challenges, and efforts were slow in coming. Many have noted history’s cruel joke that at the moment global warming becomes widely accepted and as it accelerates, it is a hyper capitalist moment of human organization led by a nation dedicated to growth at any and all costs.

The US decision to go scorched earth as its empire crumbles is only making a bad situation worse. ..............

Sadly, we’re moving in the opposite direction. Climate tipping points are mentioned in passing —if they’re mentioned at all— and quickly pushed to the back pages by the latest nuclear brinkmanship in the New Cold War, approaching war in Venezuela and maybe Columbia too, US-Israel efforts to remake the Middle East through genocide. It’s not a coincidence that all these countries and regions being targeted by Washington also happen to sit on the largest known oil and gas reserves in the world as the US doubles down on a dystopian future filled with fossil fuels, climate chaos, and hierarchical class structures protected by a robust police state.

This path the economic elites are coalescing around not only precludes any action on global warming, but there are signs that they are actively embracing it as just another component of their imperial game. ............................................

............ Of course nobody knows with any certainty what havoc will be unleashed once more climate tipping points fall.

The US happens to be blessed with plenty of fresh water (as does the “51st state” to the north)—for now—but all of global warming’s other forces will do plenty of damage to America and cause destabilization there as well.

The problem here is that the economic elite in the US believe that their money will always allow them to buy a solution, and many are embracing a future in which they believe they can build an empire-by-contractor system where ruling clans do no more than oversee weapon systems, AI data centers, and mercenaries. ........



Yves here. For those minimally on top of AI power usage, the headline is a “Gee, ya think?” item. But this post documents a key point: not only is AI greatly increasing electricity demand, but that need is also being met enough by fossil fuels so as to reverse the decarbonization of electricity production.


The so-called “green transition” has triggered a mining boom all over the world which is leaving conflict, environmental devastation and political instability in its wake.

In this episode, researcher and climate analyst Nina Djukanović explains her recently published research into the  competitiveness, security, and socio environmental issues of critical raw materials around the world. Her paper, Material Dependencies, was produced for Czech think tank, the  Association for International Affairs, and she explains we simply do not have enough materials to transition to a green economy within an extractivist and growth model. She explains all this and more, revealing how the green transition is being dangerously interwoven with militarism and digitisation 


fwiw:
What I want everyone at COP30 to know.



We can all relax. Bill Gates has solved climate change. That should trigger every intuitive alarm our species has evolved.

His message is that climate change is a serious problem but he rejects the “doomsday view.” We should focus less on temperature and more on human welfare by lifting people out of poverty and curing disease. To do that we have to make clean energy cheaper and scale it to better meet the needs of everyone on the planet. We should measure success by how many lives have been improved.

That’s wrong. It locks in continued planetary destruction. The main problem isn’t climate change; it’s overshoot. That’s when humanity’s demand on nature exceeds what Earth can regenerate and safely absorb each year. In other words, we’re using and polluting faster than living systems can recover. Climate change is a consequence of that.

Human welfare rests on biophysical welfare, and that foundation is failing .................

................... Reaction to Gates’ recent article has been mixed. Some call it pragmatic and praise his concern for humans in poverty. Critics worry that downplaying climate threats will water down the urgency to cut emissions and acknowledge planetary limits.

I’ll be blunt: his manifesto is a recipe for disaster. He’s out of his depth.




Sci Fare:






U.S. B.S.:


......... My position was half “America has never been trustworthy to anyone, and it ignores NAFTA rulings and destroyed our aviation industry” and half “countries have interests not friends.”

The moment it wasn’t in America’s perceived interest to be friends, it wouldn’t be, and empires are always implicitly enemies of their vassals, seeing them as useful tools, not friends. 

But I want to emphasize how grateful I am to to Trump. If he had played along, given the appearance of friendship while slowly screwing Canada over, the way most recent administrations have, Canada would have gone along with it. If the past 45 years have taught us anything, it should be that people will tolerate a slowly eroding situation for ages, ..............



.................... Japan does roughly equal trade with the West, and with BRICS, with about a 2% edge to BRICS. This is a terrible position to be in, though I’d suggest that going with the rising powers rather than the falling ones is the way to go.

The problem is that America is forcing nations to choose. Playing both sides: trading with both, may not be possible going forward. There will be two payment systems, so simple financial sanctions won’t work, but other types of market controls like tariffs and import/export controls have come roaring back into use.

Trade that can be cut off or curtailed at any point, apparently arbitrarily, can’t be counted on.  ...........

America is trying to force a clean split into two blocs. But the other bloc is richer, more trustworthy and arguably stronger. And if it isn’t stronger yet, it will be in a decade, guaranteed.

This also relates to America’s actions in South America, an attempt to try and keep the America’s “American”, which is bound to fail. But as the declining power America wants to use its military force while it still has local superiority and before China and Russia can sell or give local nations enough weapons to become effectively immune to US force. .............


No Kings, Russia / Ukraine, and More On AI

For those who may have forgotten, the (Barack) Obama administration was warned when it shifted the judiciary function for capital cases abroad to the White House that doing so would come back to bite the Democrats. While Democrats trusted Mr. Obama to adjudicate fairly and only kill (as a King would) those who were deserving, few others in the world did. To now complain that too much power is concentrated in the Executive Branch would be rich if Democrats had any knowledge of what I am referring to.

It is the Democrat’s inability to self-reflect--- a product of their near-complete ignorance of the policies that they claim to support, that makes them so repellent to so many. While the following was as true of George W. Bush’s supporters as it is with today’s Democrats, those most supportive of the party know the least about its actual policies. Barack Obama’s economic policies, in particular his bailouts of Wall Street, were amongst the most socially destructive acts in modern American history. ............................

This isn’t to blame Mr. Obama for his time and place. Following from Bill Clinton, the Democrats are the Party of Wall Street, the rich, and ‘liberal’ class warfare. Even given the evidence, gullible Democrats still imagine that the ACA (Obamacare) was about public health rather than making Mr. Obama’s donors in the health insurance industry richer. And the automaker bailouts codified ‘tiered’ wages, assuring low and declining wages for younger workers in the US auto industry. Mr. Obama was no friend to labor.

Quite remarkably, today’s Democrats make no association between Barack Obama’s policies and oligarchic wealth, in particular, Donald Trump’s. Had Mr. Obama focused on saving the rest of the country rather than just Wall Street 2009 – 2016, the US likely wouldn’t be at war with Russia in Ukraine, in free fall in terms of international relations, some utterly useless Democrat would be in the White House, and the economy would suck a whole lot less in terms of how the American people get by. .........................

For those who may have forgotten, the last US President from the Democratic Party was a xenophobic, mass incarceration loving, proponent of every crappy American war of the last half-century, who instigated a war of choice in Ukraine while he participated in an ethno-nationalist genocide in Gaza. In terms of domestic policies, he promised quite a bit in order to steal the nomination from Bernie Sanders, and then failed to deliver on almost all of it.

To the ‘we would be at brunch’ signage of the No Kings participants, words fail. Your boy (Biden) started an honest-to-God WWII style genocide in Gaza as he goaded Russia to attack the US with nuclear weapons. Had the signs read ‘we would all be dead now,’ at least some connection to planet earth would have been in evidence. ........................

How this relates to Russia in the present is straightforward. From Woodrow Wilson to George W. Bush, Americans have been lusting after Russia’s vast resource wealth. ..................


Trump Wants Cash To Buy Shares in Key US Companies and Dictate To Them



......... What percentage of Americans even realize that Trump has bombed Somalia nearly a hundred times this year? I doubt it’s even one percent. The mainstream press barely mention it. Americans have hardly any idea who their own country is bombing.

In theory the press are there to create an informed electorate who can then use their votes to move their government in a healthy direction. In practice the press are there to keep the public too ignorant, propagandized and distracted to meddle in the workings of the imperial machine.

❖

Israel keeps violating the “ceasefire” and bombing Gaza whenever it wants to, then saying the ceasefire is back in effect. It’s like saying you’ve quit smoking whenever you’re not currently having a cigarette.  .............

❖

It’s not okay to still support a two-state solution in 2025. Israel has spent two years showing the world that it should not exist as a state. It needs to be disarmed, dismantled, and denazified.

It was still excusable to naively believe a two-state solution was workable prior to 2023, but after two years of Israeli officials openly saying with the overwhelming support of their citizenry that there will never be a Palestinian state while committing a genocide in full view of the entire world, this is no longer a tenable position to have. ................





Geopolitical Fare:




In a week, about a quarter of the entire US Navy will be off Venezuela. Trump has made claims about Venezuela smuggling Fentanyl to America, but this is completely laughable and anyone with a room temperature IQ knows its a lie. (Though, who knows, Trump may believe it, not having a room temperature IQ.)

Anyway, Venezuela has the world’s largest oil reserves and Trump does love other people’s resources.

But I think the geopolitics are more important. The entire world outside of America’s direct vassals are throwing off the West’s shackles. ............................

America’s in terminal decline and everyone knows it. But like Britain in the 1930s, that doesn’t mean it isn’t still powerful and couldn’t fuck you up.

The smart people in Trump’s administration, I think, see that their military force is a wasting asset. The longer they wait to use it the less they have, and the more their enemies have. Russia and China could get enough gear and advisors to Venezuela to make attacking it a complete no go, in principle, and given time, they will. Same with almost every other reasonable sized country.

So if America wants to attack Venezuela it has to be soon. ....................

Venezuela, the like the Gaza genocide and land grab, are among the last gasps of America empire. Empires die bloody. If we get away without a nuclear or world war, we’ll be doing well.

May America then break up into multiple states and never again be a unified nation capable of exerting its will upon the rest of the world.



There seems to be an emerging consensus among the YouTube commentators who are particularly inflential in shaping US/advanced economy perceptions among anti-globalists and other US hegemony skeptics and oppents. Many are coming to the position articulated early by Mark Sleboda, who has been the most accurate in forecasting the pace of the conflict, that Russia would have to take all of Ukraine, if nothing else because NATO officials and key EU political leaders have regularly and rabidly maintained that they will arm/rearm Ukraine even in the event of an apparent defeat. So the only secure and durable remedy to that, from the Russian side, is to make sure no US/NATO/EU-aligned Ukraine survives the war. That in turn would seem to require that Russia secures all of Ukraine’s current territory, by some combination of winning referenda in the Russia-receptive oblasts so they join Russia plus occupation or installation of a friendly regime in rump Ukraine. While I am in no position to observe directly, polls and the tone of commentary support the idea that Russian citizens more and more favor aggressive prosecution of the conflict, and subduing/controlling all of Ukraine and thus have been frustrated with Putin’s dalliances with Trump.

Even though occupying or otherwise dominatinng the entirety of Ukraine would entail more costs than other solutions, it is arguably the least bad result for Russia. But even so, Sleboda has warned that that outcome might not be unwelcome form of Russia victory to the West: “We’ll make you choke on it.”

But even in this “subjugate all of Ukraine” assumption, there are a lot of ways to skin that cat. John Mearsheimer has long argued that what Russia wants as an end-state is a dysfunctional rump Ukraine. That presumably includes Russia taking historically Russia-leaning Odessa1 to render what is left of Ukraine landlocked.

John Helmer has so far provided the most insight, due to his contacts in the General Staff, as to what the end game might look like. Helmer has suggested that the General Staff in particular has been frustrated with Putin apparently requiring a particularly slow grind on the ground, and holding back (until recently) on muscular prosecution of the electricity war. ................................

............... In addition, Helmer pointed out that the General Staff expected that an aggressive prosecution electricity war (as in turning out the lights, which would also result in no heat and destruction of infrastructure via burst pipes; key parts of the municipal waterworks depend on electric controls and heating) would produce a humanitarian crisis and mass flight westward. Helmer did make clear that the General Staff saw overloading border states with refugees as a plus, but Putin presumably does not like the optics of punishing civilians. One solution to that apparent dilemma might be for Russia to create intermittent but somewhat lengthy outages (a guesstimate is 12 to 72 hours) to give the citizenry a taste of what is in store and give them time to leave in a more orderly manner. ...................

However, I have not seen much consideration of what measures Russia can take to reduce the incidence of terrorism in rump Ukraine and the Russian Federation, not just the newly-integrated oblasts but pre-war Russia. MI6 lives for this sort of operation. Scott Ritter has claimed that Russia House, the CIA unit tasked to messing with Russia, is effectively a rogue operation. ....................


Some problems have no solution.

I don’t follow the traditional media’s coverage of the war in Ukraine very much—I leave that to those with stronger stomachs—but it’s impossible to ignore the two mixed and confused messages they broadcast about the chances of ending that war more-or-less peacefully. On the one hand, “talking to Putin” should be a capital crime, and any move suggesting that the West does so is a form of treason. On the other, newer and better wonder-weapons must be sent to Ukraine to “force Putin to the negotiating table.”

I’m not going to try to reconcile these messages, because I don’t think it’s possible, and anyway it would be a a waste of effort. Rather, I’m going to treat them both—and other things I’ll discuss as well—as examples of the fundamental incoherence, narcissism and superficiality of thinking and expression which typifies today’s Professional and Managerial Caste, (PMC) including political leaders and those who advise them and write about them. Let’s deal with that first, and then we’ll get back to Ukraine and some other places. 

In general, ruling classes in history have had their own ideology. Often, it was an ideology of self-preservation and self-justification, based on a conviction of fitness or entitlement to rule, and sometimes supported by religious doctrine. So King Abdullah II of Jordan’s legitimacy, like that of his forty ancestors, is based on being the direct descendant of the Prophet Mohammed and of course Islam has provided the ideology. In more recent times, as Natural Rulers went increasingly out of fashion, ideology as properly understood replaced divine or customary sanction, not just as a sign of legitimacy, but as a common source of values, a point of reference and a guide to behaviour for the ruling class as a whole. Obvious examples include the Revolutionary/Republican tradition in France, the conservative/religious/army influenced regimes of Franco or Pinochet, the Socialist ideology of many states, Communism after 1917 and China today. Of course, such ideologies are never entirely dominant, and rarely unchallenged. They do not preclude factional disputes and even outright conflict, and many of them eventually crumble and die. But they do at least provide a reasonably coherent set of doctrines, and a context for arguments about policy.

In the West as a whole, we haven’t really had that kind of coherent context since the Reformation, but at least it was possible until recently to identify shared patterns of belief, and understand why a party of the Left would generally behave differently from a party of the Right once in power. That’s no longer the case, but neither has there been a blanket replacement with an organised ideology of extreme social and economic liberalism, even though that’s part of it. Rather, the current western ruling class, like the Party in 1984, has no ideology in the traditional sense. It is interested in power and wealth, and it has factions which are obsessed with various social objectives and causes, but it is incapable of thinking in a coherent fashion, and doesn’t really see the need to do so. Today’s ruling class thinks of itself less as Ruling than as Managing, complete with its yellowing MBA textbooks. Party leaders may publicly talk about “our values” in an attempt to justify their actions, but these pronouncements seldom go beyond banalities, and rarely reflect the traditions and ideologies of any particular party or movement. Indeed, most parties of the Notional Left, for example, are embarrassed about their past beliefs and actions, and try to distance themselves from them as far as possible.

What has replaced genuine ideology as a basis for decisions and policies is a kind of collective and often arbitrary set of rules and customs .......................

This depressing state of affairs has its origin in two processes. One is the increasingly homogeneous nature of the current ruling class: the PMC. This is pretty much unprecedented in multi-party political systems, or even in oligarchies.  .....................

The result is that decisions are taken and influenced today by people who live by sets of vague ideas unpolluted by actual experience. And the traditional “countervailing powers” that in Liberal theory are supposed to counterbalance those in power just turn out to be more of the same people. .................

The PMC cannot cope with the idea that there are problems that have no solution, and can at best only be managed. ...................



Yves here. Readers may choose to dismiss this new version of a good old fashioned containment strategy, now attempted by the US in Eurasia, as doomed to fail. But even if it logically is, given the massive productive capacity of China and the arms prowess and natural resources wealth of Russia alone, the future might take longeer to arrive than anti-globalists might hope.

First, the US is vastly more willing to engage in violence to preserve its pretenses to global dominance than China and Russia are. While in the longer run this will be self-defeating (we can see how militarization and sanctions policies are already reducing living standards and increasing social and political fractures in Europe), it might have a measure of success as a costly delaying tactic (if the US and Europe had more managerial/execution competence, the odds would be a lot better). ..............


.......................... Might this be Japan’s real strategy?

To caress the narcissism in Trump to divert him from a Japanese move towards China which eventually may allow it to break with the U.S.?

I for one would call that a good plan.



Other Fare:

America is broken. We need to fix it.

I keep waiting for someone in power or seeking it to say the quiet part out loud: the amount of work required to fix this country is far bigger than “beating Trump” or “restoring norms” or whatever line gets handed to Democratic donors and MSNBC panels. I keep waiting for someone to look the public in the eye and say: we’re not going to vote our way back to the America we think we used to have, because the America we think we used to have never actually existed for most people.

Here’s the reality: we are the richest country in the history of the world — not just now, but ever — and one in eight Americans needs SNAP benefits to eat. Not because of COVID. Not because of a recession. Because our economic structure literally cannot sustain the basic well-being of tens of millions of people without federal food aid.

We spend twice as much per person on healthcare as Japan or Italy, and yet we live shorter lives, get worse outcomes, and bankrupt people for getting sick. Medical debt is the number-one cause of personal bankruptcy, and 70,000 people a year die because they can’t afford care in time. That’s not a healthcare system. That’s an extraction machine. ...........


It would be immoral to run a factory farm so it's immoral to buy from one

.................. But here’s a plausible principle: if it’s wrong to do something, then it’s wrong to pay other people to do it. Because it’s wrong to kill, it’s wrong to hire someone else to kill. Because it’s wrong to rob a bank, it’s wrong to hire someone else to rob a bank. So if it’s wrong to treat animals badly, it’s wrong to pay others to treat animals badly.

But that is what you do every time you purchase meat from a typical source. You pay for the product of months of torment and mutilation. Factory farms treat the animals on them every bit as badly as your friend in the above hypothetical. Every one of the practices I described is routine on the factory farms that house more than 99% of animals killed each year. So if it’s immoral to mistreat animals, then it’s also immoral to pay for others to mistreat animals. This would mean nearly all meat consumption is seriously immoral. ....................


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