"It's a Big Club, And You Ain't In It!"
We can fall into the trap and argue donkeys and elephants if we must, but it'd be better to just jump out of the pot.
As a follow up to Selling Your Soul In The Era of Social Degradation, I’ve decided to finally publish what remains of an email that has been on the shelf for several months. Some of what I had envisioned for this ended up in the opening paragraphs of the Worldcoin post roughly a month ago. However, given the obnoxious polarization of “Rich Men North of Richmond,” the time is right to get the rest of this out of drafts and into your inboxes.
As is customary in the era of politicizing everything, we can’t even have an angry folksinger getting some shine for spitting some real Carlin-esque shit without an establishment-bootlicker shifting the blame to a certain political party. The rebuttal from the LinkedIn-class seems to be this; Oliver Anthony’s anguish isn’t from a failure of big government, taxation, or the welfare state. Rather, it’s from Ronald Reagan and vicious capitalism. No joke, that’s a legit opinion that I read this week right here on this platform from a much larger publication than this one. Link not necessary. Trust me, I’m doing you a favor.
Part of the reason why I was very careful to refer to Washington as a “political duopoly dystopia-con” is because I don’t actually place blame on any one political party for this song’s existence. Why? Because the grift that is the erosion of the dollar is not an issue of politics, it’s systemic.
Cause your dollar ain't shit and it's taxed to no end - Oliver Anthony
Furthermore, blaming all of the working man’s woes on capitalism is a misunderstanding of capitalism as we don’t actually have capitalism in America. We have cronyism built with socialism for banks, airlines, auto manufacturers, and really anyone who lobbies enough for special treatment married with a cost of capital that is centrally controlled and managed by a board of less than 10 people. Calling this monster capitalism is…
The Rise of Populism in One Chart
Everybody thinks they’re underpaid. Turns out, a lot of people probably are.
This is one of my favorite (relatively dated) charts from the website WTFHappenedIn1971.com. It makes the case wages haven’t kept up with real GDP in decades. Whoever is controlling that URL is using it to support the argument that things went off the rails socioeconomically shortly following Nixon’s default on foreign Gold stock redemptions. I think the chart above speaks for itself so I won’t belabor the point. I generally agree.
People in America are pissed and they should be. People in other countries are also pissed and they should be too. Basically, people are pissed and they should be. We just don’t all have the same prescriptions for society’s ailments. I believe this divergence between production and wages over the last half century has directly led to the rises of populism on both the political left and the political right manifesting through Bernie Sanders and Donald Trump.
But the larger issue driving our inabilities to come to common ground on a lot of our disagreements is that they often become emotional arguments. Which is undoubtedly by design and
covered that idea very nicely a few months ago in Divide and rule:They want us fighting each other to protect their powerbase and obfuscate the real source of America’s biggest, most intractable problems: their control of the money supply.
The divide goes well beyond political lean; it’s also age, it’s ethnicity, it’s religious belief, it’s location, and it’s socioeconomic. This social divide manifested again recently but you won’t see it in any news reporting or any establishment data.
Repricing Productivity
A nameless corporation that I know somewhat well recently announced a new minimum wage for its employees… $20 per hour. Let’s just say reaction to this news internally was… mixed. Turns out when you can’t find new employees to fill openings for thankless jobs with crappy pay and poor hours, you have to do something to increase your prospect funnel.
Anyway, when I first learned of this $20 wage floor situation, I asked the person who told me about it why the people who were angry were so mad? As I suspected, the answer was essentially “many of them worked for 20 to 30 years to get to that point. Now everybody just gets it.” My near-verbatim answer:
Just wait until they find out how the money they’ve spent their lives earning comes into existence, then they’ll really be pissed.
I want to make this clear; I don’t like minimum wage laws. I think it’s fairly easy to argue they’ve actually hurt people more than they’ve helped them. Aided by a general lack of financial literacy in the broader public, I believe minimum wage laws have largely taken the “floor price” dynamic away from true market discovery (as illustrated above) and we’re quite literally paying for it now in the post-COVID era.
But if we’re absolutely committed to figuring out some sort of base rate for productive people and we’re unwilling to take the unit economics of each business into consideration, $20 might actually be a pretty good start and I can back that up with historical money debasement data.
Pay very close attention to what this table is saying:
Do you get it?
US Coinage used to be minted with precious metal. Starting in 1965, the silver composition in quarters went from 90% to nothing - this was enormous debasement. Five quarters, or the face value equivalent of the federal minimum wage in 1964, were worth about the same in silver weight at that time. This is an important comparison because in addition to being a monetary element, silver is a commodity that is used in industry. It’s a fine proxy for what we’re analyzing.
If we observe the labor floor through the lens of metal weight value rather than face value of the currency, the minimum wage in 1964 expressed through proper coinage would be a little over $21 today - the current federal minimum wage is less than a third of that. Since the coinage is now minted with base metal instead of precious metal, the melt value of the currency is currently about 20% of face. This is a drastic departure from when the coinage was essentially worth its melt weight.
Now, maybe I’m a crackpot. But it sure looks like currency debasement might be playing a harmful role in the long term return on labor. Or maybe it’s just a coincidence that corporations are willingly moving wage floors eerily close to the metal weight value of what used to be minimum wage 60 years ago. I suppose you can be the judge for yourself. And if you don’t think silver is the right proxy for wages, have a look at inflation-adjusted minimum wage instead:
Gee, look when it peaked…
The Problem in a Nutshell
In too many areas, we’ve shifted the social achievement of prosperity away from incentivizing actual production and instead created a system that rewards gamified proximity to an ever increasing supply of fiat currency. Unfortunately for the country’s “owners,” the filthy masses appear to be waking up to the ruse.
Turns out, the “money” can be digitally rained down from the ivory tower with a keystroke. We can monkey with inputs and methodologies that measure price inflation at the consumer level in a lame attempt to hide reality. But we can’t abstract away physics. When there is more currency chasing finite goods, the prices of those goods nominally increase. When the price of the material used to create the currency increases to the point where cheaper material is used as a replacement, the currency loses intrinsic value. That is the problem. It is obvious.
And yes, the government is at significant fault for this because it relies on a central bank monetizing budget deficits with counterfeit money rather than cutting spending or funding programs with efficient taxation. Those pulling the strings prefer slowly boiling the frog in water through the dishonest tax of perpetual currency debasement. The politicians take the grease, get reelected, and leave office with millions. I can’t imagine why they haven’t put a stop to the con yet…
To me, it’s clear. No matter how much some would prefer to create nonsensical tribal arguments, it isn’t one politician or party to blame; it is the entire system that created “Rich Men North of Richmond.”
It’s a big club and we ain’t in it.
Amen! Thanks again, Mike!!