Category Archives: Economics

Ideological Purity Only Works if Strongly Correlated with Reality

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Rapidly transforming the American public’s beliefs is a daunting task—all the more so if you dismiss their current values as unacceptable. The Democratic Party’s pragmatic wing has been pleading to broaden the tent, ideally before the Trump administration stamps out all opposition. The party’s progressives seem determined to reeducate the public rather than compromise for their votes. This is a seductive approach if the goal is ideological purity. It is a problem only if the party hopes to win elections.

Jonathan Chait
October 6, 2025
Democrats Still Have No Idea What Went Wrong

Ideological purity only works if the ideas have a strong correlation with reality. The problem Marxists have is that Marx’s ideas were found to be at odds with reality within a few years of him articulating them. His central concept, the labor theory of value, was rejected along with the incoherent fluff built upon that. He was a nobody until Lenin came along and concluded the incoherent fluff was actually genius.

Lenin brought Marx’s theories back from the dead, where they belonged, and laid the groundwork for the deaths of tens of millions in the Russia and U.S.S.R. As the Marxist infection spread worldwide over 100 million were murdered by their own governments. There have been hundreds of attempts to tweak the implementation of Marxist theory to create the promised utopia. While some of been far less deadly than others, the bottom line has always been that free markets and free minds outperform the Marx model of government.

Yet, 150 years after Marx’s ideas were first dropped into the dustbin, we have a major political party still trying to claim they have relevance. If they want to win elections (gain power) then they need to be at least somewhat content will a little power rather than a lot of power. They need to give up the authoritarian model of government. I suspect this is unacceptable to them and they would rather destroy the evidence they are wrong than accept the truth and exercise power within the confines of reality. The current government shutdown is only the most recent data point supporting this hypothesis.

Prepare appropriately.

Naive and Power Socialists

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I distinguish between naive socialists and power socialists.

Naive socialists have economically illiterate compassion.

Power socialists want to use envy and the compassion of naive socialists to gain political power to smash their enemies and control everyone.

Apatheia Ⓥ 🇺🇸 @DanKellyFreedom
Posted on X, July 16, 2025

Sadly, this account no longer exists. Perhaps it was a bot or something.

Regardless, the distinctions and descriptions resonate with me. And it is a little more polite than the more common, “useful idiots”. This comes in handy when you are discussing politics with your mother-in-law or others with the potential to disrupt domestic harmony.

Probably Fake but Accurate

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Name three things that the government does cheaper and better than private individuals and organizations. It would be no trick at all to name dozens of things that the government does worse and at higher costs.

Attributed to Thomas Sowell
Posted on X, August2, 2025

I strongly suspect this is not an actual quote of Sowell. It certainly fits the essence of Sowell’s work, but you will be hard pressed to find something that comes close to a direct quote.

Seize the Means of Production

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Zohran Mamdani’s run for mayor of New York City is a clear and present danger to the stability, economic health, and democratic foundation of both the city and the nation.

His platform is rooted in a radical socialist ideology that has, time and time again, led to failure, repression, and suffering wherever it has been tried.

And thanks to a clip surfacing on social media today, we see that Mamdani is not hiding this. In fact, he has been strikingly open about what he believes and what he plans to do. You can listen to his comments for yourself here.

Speaking in 2021 at the Young Democratic Socialists of America Organizing Conference, Mamdani said his goal is to “continue to elect more socialists” and to be “unapologetic about our socialism.”

He followed that with two key objectives: boycotting Israel and “seizing the means of production.”

The phrase “seizing the means of production” is not some vague slogan—it is the core tenet of Marxist revolutionary ideology. It means that private property, businesses, and industries are taken from their owners and turned over to collective or state control.

Quoth the Raven
June 30, 2025
“Seize The Means Of Production”: Mamdani Lays Bare His Agenda

This is consistent with yesterday’s QOTD.

Watch and listen to the video:

You can vote your way into socialism. You have to shoot your way out.

Prepare appropriately.

Socialism is Economic Cancer

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Thanks to a clip surfacing on social media today, we see that Mamdani is not hiding this. In fact, he has been strikingly open about what he believes and what he plans to do. You can listen to his comments for yourself here.

Speaking in 2021 at the Young Democratic Socialists of America Organizing Conference, Mamdani said his goal is to “continue to elect more socialists” and to be “unapologetic about our socialism.”

He followed that with two key objectives: boycotting Israel and “seizing the means of production.”

The phrase “seizing the means of production” is not some vague slogan—it is the core tenet of Marxist revolutionary ideology. It means that private property, businesses, and industries are taken from their owners and turned over to collective or state control.

Historically, this has been done not through elections or peaceful reform, but through authoritarian rule, state violence, and mass suppression.

Quoth the Raven
June 30th, 2025
“Seize The Means Of Production”: Mamdani Lays Bare His Agenda

Part of me wants to say, “Go for it! You can be a bad example for the current generation.” But that would be like rooting for cancer in your foot. It is already stinky, and it is not something you show off to your friends, but cancer is still a really bad thing.

Spending Less Triggers Collapse

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The dynamic that leads to collapse is as invisible as the extremes. Once the organization–household, institution, corporation or nation-state, the dynamic is scale-invariant–has hardened into a brittle state of stasis, it’s impossible to shrink the budget without collapsing the entire structure.

I call this the Rising Wedge Model of Breakdown: as expenses, self-interest and debt all expand, it becomes increasingly difficult to slash expenses without triggering the implosion of the organization.

Under the guise of cutting the fat to save the muscle, what actually happens is the muscle is cut to save the fat. This is a complex process, but in summary, the most competent realize the organization is dysfunctional and cannot be salvaged in its current bloated state of denial, and so they immediately jump ship.

The naive who believe they can turn the situation around give it their best effort but the resistance to any meaningful sacrifices is so tenacious that they burn out and quit.

That leaves the delusionally incompetent who reckon they’re finally getting the power they long deserved. This leads to the substitution of PR and artifice for actually reducing the organization to a sustainable level, for what’s required is not just a revised spreadsheet but an entirely new culture and value system.

…

The story of the next decade is the playing out of the Rising Wedge Model of Breakdown / The Ratchet Effect throughout the entire status quo: households, institutions, corporations and nation-states will all hasten to cut muscle to save the fat and then wonder why everything is imploding under the weight of delusion and denial.

As noted previously, what’s required is not just a revised spreadsheet but an entirely new culture and value system. Without that, we get zip, zero, nada in meaningful adaptation to new realities.

charles hugh smith
June 5, 2025
oftwominds-Charles Hugh Smith: The Ratchet Effect: Easy to Spend More, Spending Less Triggers Collapse

The key takeaway is that spending less triggers collapse.

Prepare appropriately.

Economic Forecasts

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We have a lot of dollars sloshing around the world thanks to years and years of artificially low interest rates and quantitative easing, and more of those dollars are going to be coming home as foreigners get out of U.S. financial asset.

You’re seeing a global exodus out of U.S. stocks, out of U.S. bonds, and all that cash is going to come back home, bidding up prices.

The solution involves much higher interest rates. Now, I understand that’s going to be very painful, given the economy that we’ve created, built on a foundation of cheap money.

It means stock prices come down, real estate prices go down, companies fail. There’s going to be bankruptcies. There’s going to be defaults. There’s going to be a protracted recession, probably a much worse financial crisis than 2008, but all that has to happen because the alternative to that is even worse.

The U.S. is on the path to “runaway inflation” that could become “hyperinflation.”

Peter Schiff
Euro Pacific Asset Management Chief Economist
June 18, 2025
Peter Schiff warns of stagflation for US economy | Fox Business

Is this true? It does resonate with me. Hyperinflation is one of my big concerns in life. And because of this I have socked away $100 Trillion for a rainy day. But I have never even taken a class in economics. Perhaps I should invest/prepare differently.

For me the big wildcard in all this is that economists can’t really accurately model the economy. The math does not exist to account for the emotional reactions of what people do with their money and other assets. It could be a one sentence post on social media by the U.S. President or Elon Musk changes the entire dynamic.

One could argue that short term blips are unpredictable, but the long-term averages adhere to some math model(s). But then, how do you explain economic Nobel Prize winner Paul Krugman having such an uncanny knack for getting nearly everything wrong? Economically blinded by TDS?

If so, then how do we know most other economists are not also economically impaired by the same or similar syndromes?

Oh, by the way, I ran out of Markley’s Law posts. The sources dried up early this year.

Sane or Insane?

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When wealth taxes fail, the Democrat Plan B is always to feed off the middle class through methods like new sales taxes or gas taxes.  Seattle is already in the midst of an economic decline and a budget shortfall of this size is a crisis.  Not only did their new taxes cost tens of thousands of jobs for the area, but they increased their spending projections, counting their chickens before they hatched.

Insanely, Democrats in Washington still want to pass a similar Payroll Tax system for the entire state (due to their own budget problems) despite the fact that it has been an unmitigated disaster in Seattle.  The economic events in Seattle and the Pacific Northwest in general are a canary in the coal mine for the entire nation; a warning of what is to come if Democrats are allowed to continue running some of Americas biggest metropolitan areas.

Tyler Durden
April 2, 2025
Seattle Economic Crisis: Proof That Democrat Wealth Taxes Lead To Disaster | ZeroHedge

It is only insane if they are motivated by the general welfare of the Seattle and Washington state citizens. If their motivation is the destruction of the city, state, and country, then it makes perfect sense.

Prepare appropriately.

No Surprise Here

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What could they possible expect? Surely, they did not believe companies would just pay the taxes, right?

Seattle payroll tax revenues fall short by $47M

Seattle Mayor Bruce Harrell released his payroll expense tax (PET) report for 2024 Tuesday, and its projections came up nearly $50 million short.

“Today’s announcement that PET revenues collected in 2024 were $47 million lower than projected requires action to ensure our budget remains balanced,” Harrell explained in a statement.

Harrell said that his 2025 budget proposal was based on the projections from the independent Office of Economic and Revenue Forecasts. But since they got it wrong, the mayor said for the 2026 budget, “my office will consider all options, including additional revenue sources and appropriate expense reductions, to ensure we are making the priority investments and funding the essential services that matter to our residents.”

Did the payroll expense tax push jobs out of Seattle?

The payroll tax is levied on large corporations in the city, like Amazon and Expedia. Such a steep revenue forecast error suggests high-paying companies or their jobs are leaving the city.

It’s precisely why KTTH host Jason Rantz called the news “catastrophic” in a thread on X.

“What people haven’t realized yet—but soon will—is that the sharp drop in payroll expense tax revenue means jobs are leaving Seattle,” Rantz explained. “The whole point of the PET was to squeeze ‘free’ money out of businesses because the city arrogantly assumed it held all the cards. But what did PET actually do? It pushed Amazon jobs to Bellevue, kept employees working from home (and out of Seattle), and helped fuel layoffs at companies hit hardest by the tax—like Expedia.”

Jobs are leaving Seattle

Even Harrell acknowledged, “This decrease in revenue is aligned with recent reports of major employers moving thousands of high-paying jobs out of Seattle to other cities in our region.”

And, of course, next they will try to push jobs completely out of the state:

He noted that the Seattle payroll tax idea may go statewide with the budget proposal from Washington Democrats.

What’s next?

Republican State Rep. Chris Corry of Yakima took notice of the payroll woes in Seattle. He posted, “Paging literally everyone in Olympia.”

I just can’t believe they would deliberately kill their geese laying the golden eggs. Hence, I have to believe they really are that stupid. And since they are incapable of learning they are going to double down on their mistake.

CRT and Marxism are Simple Things for Simple Minds

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Critical Race Theory is so popular because it provides a simple, single explanation for all the problems in the world and divides all of humanity into visible goodies vs baddies.

Alice Smith @TheAliceSmith
Tweeted on March 29, 2022

Marxism does the same thing. And people who push CRT are almost always Marxists.

Simple things for simple minds.

The complexity of the related literature is obfuscation.

Beware the Unintended Consequences

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It’s been slow coming, and far overshadowed by the rise of Trump. But one movement that’s finally seeing a bit of a breakthrough is “tax the rich.”

The landslide win this past week of a tax on millionaire pay in Seattle is the latest sign the public is agitated by massive wealth inequality — and finally willing to do something about it.

Danny Westneat
February 15, 2025
From Seattle to the Okanogan, ‘tax the rich’ is stirring | The Seattle Times

The unintended consequences of more taxes are so obvious and yet they did it anyway.

I am reminded of something Heinlein wrote in Time Enough for Love:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”

I give up on these people. They deserve what is coming.

Gold Price Forecasts

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The current spot price of gold is $2,656.41. But what will it be a few months or years from now?

From earlier today we have a self-proclaimed expert saying:

Gold Won’t Save You From Historic Market Bubble Bursting: Henrik Zeberg

“I think gold is actually in a kind of a smaller bubble by itself now,” Zeberg stated. “I think you’re going to see a rather strong decline in gold to the very reasons that I just said talked about here.”

Zeberg’s bearish stance on gold is rooted in his expectation of a deflationary bust. As the economy contracts and inflation falls, the US dollar is likely to strengthen, making gold a less attractive asset.

“I don’t want to hold gold into that environment,” he said. “I actually think it’s a very bad environment to hold gold.”

From an entire panel of experts on October 22nd:

Latest Gold Price Forecast & Predictions | Gold Eagle

Gold Forecast 1 Year
Bullish: $3,200
Medium-term price drivers:
US dollar, bear market in stocks and recession, investor sentiment

Gold Forecast 3 Years
Bullish: $4,825
Long-term price drivers:
US dollar, US budget deficits, central bank monetary debasement, negative real interest rates, and the potential for an uptick in sovereign buying.

I’m reminded of something an old engineer I knew many years ago was fond of saying:

The wonderful thing about standards is that there are so many to choose from.

Biggest Popular Delusion in World History

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#Bitcoin, crypto, and blockchain will likely go down as the biggest example of popular delusions and the madness of crowds in world history. The overall losses when the bubble finally pops will be staggering. It’s not just the speculators who will be left holding a bag of worthless Bitcoin, but also the investors who funded all the infrastructure and related businesses. This is likely the biggest misallocation of resources in human history. Not only will the net losses to society be staggering, but Bitcoin itself will do more to tarnish the reputation of libertarian capitalism and the concept of sound money than any failed government program ever has.

Peter Schiff @PeterSchiff
Posted on X, November 11, 2024

I am in tentative agreement about bitcoin being the biggest popular delusion in world history. The possible exception to this is faith in communism. And the tremendous amount of electricity consumed just boggles my mind.

But the bubble will last as long as enough people have faith in it. It is conceivable that will be decades or even a century.*

But the [dollar | bitcoin] will last as long as enough people have faith in it. It is conceivable that will be decades or even a century.

* Edited as per a suggestion via email from Mike H. only November 13, 2024.

What About a Zero Inflation Target?

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I recently finished Judy Shelton’s book Good as Gold. Today I ran across this article about her: Trump’s former pick to join the Federal Reserve has proposed a radical solution to solve inflation (msn.com).

I have never even taken an economics class, but I found her book ideas interesting. Among other things it outlined a way for the U.S. and the entire world to ease into a gold standard. Since gold reached a new all-time high today.* The idea of returning to a gold standard has more than a little bit of attraction.

As the article points out she is also an advocate for a target of zero inflation. The article is more than a bit down on that idea. But if I were President Trump, I would set up a debate. The debate would be between Shelton and a couple opponents of her zero-inflation suggestion. A compromise of a target of 1% inflation would still be beneficial. It would provide useful data about the utility of zero or near zero inflation.

* Or, the dollar hit a new all-time low.

Communism is no Longer an Economic Theory

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So the idea here is that the dominance in the Academy of skeptical and irrationalist epistemologies provides the academic Left with a new strategy. Confronted by ruthless logic, harsh evidence, they have a solution: “That’s only logic and evidence. Logic and evidence are subjective. You can’t really PROVE anything. FEELINGS are deeper than logic, and my feelings say Socialism.”

That’s my second hypothesis about the origins of Postmodernism. I call it the Kierkegaardian hypothesis, that Postmodernism is the crisis of faith of the academic Left. Its epistemology justifies taking a personal leap of faith in continuing to believe your Socialist ideals.

Communism is no longer an economic theory. It has failed utterly at that. It’s now a religion. And it’s proselytized in our education systems.

Kevin
October 23, 2024
More Quora Content – The Smallest Minority

Unfortunately, I am of the opinion this change does little, if anything, to make it less destructive. Politics have been an emotional team sport for a long time. Team communism will lose a few supporters, but they will pick up others. And those they pick up will be the type of people who thrive on strong emotions. Seeing those that opposed them piled up in a ditch will only give them a thrill and the wish to see more dead non-believers.

We Live in Interesting Times

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Gold has been on a parabolic run since October last year, rallying from near the $1,800 level to score consecutive back-to-back all-time record highs – not once, not twice, but on 37 separate occasions, so far this year.

Yes, you read that correctly. That’s 37 all-time record highs, so far in 2024.

On Tuesday, Gold prices skyrocketed to a new all-time record high of $2,758 an ounce, surpassing the precious metals previous all-time high of $2,749 an ounce reached only a day earlier – extending its gains by an impressive 53%, from this time 12-months ago.

According to GSC Commodity Intelligence – “Gold’s record-breaking run has been nothing short of impressive. Never before in history have we seen the precious metal score multiple back-to-back all-time record highs in such a short space of time”.

Phil Carr
October 24, 2024
Will The New BRICS Currency Supercharge Gold Prices? | FXEmpire

Of course, another way to read this is that the dollar has reached a new low.

Prepare appropriately.

Prepare for the Worst

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The U.S. in late 2024, IMO, is one lit fuse away from societal collapse–and there are multiple fuses, all lit. You can take your pick.

So, yes. Know your friends, neighbors, community. As the meme says, “Local, local, local.”

And prep like your life depends upon it.

TakeAHardLook
September 20, 2024
Comment to More Evidence of Astroturf – Area Ocho

I cannot find fault with this.

And have you seen the price of gold (buying power of the dollar)? It is up (down) over 45% (nearly 40%) compared to a year ago.

I want to be in an underground bunker in Idaho before the November election.

National Debt Will Turn Us Into Gaza

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A halfpinion looks at either the costs or benefits of a plan but not both.

Gaza residents were brainwashed to have a halfpinion about how to deal with Israel. October 7th was them getting the “benefit” too many of the residents wanted.

Now they are experiencing the “cost” side.

America has this same halfpinion disease. That’s why our national debt will turn us into Gaza fairly soon.

Scott Adams @ScottAdamsSays
Posted on X August 24, 2024

The same “disease” affects the gun control nuts too.

The One Man Whose Has Enslaved More People Than Anyone

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There is one white man who has enslaved more African Americans than anyone else in history.

His name is Karl Marx.

Alice Smith (@TheAliceSmith)
Tweeted on March 20, 2022

I would have thought it would be more accurate to have left out the word “Americans”. But it is true enough as is.

The U.S. Dollar Global Reserves Fall to 59%

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The global reserves count of the U.S. dollar has now fallen to 59% in 2024, reported the Atlantic Council The U.S. dollar in reserves stood at 72% in 2002 and has been declining steadily in the last two decades. In 22 years, the USD declined 13% in the markets as developing countries are distancing the currency from their reserves. In no surprise, BRICS member China’s local currency, the yuan, rose 3% during the same period.

Vinod Dsouza
August 10, 2024
BRICS: U.S. Dollar in World Reserves Fall Below 60% (watcher.guru)

We live in interesting times. Prepare appropriately.