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Economics and commerce, all built from scratch.

Global, Yes, Domination, No!

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Sneering at “globalists” has become an instinct among many Trump supporters. It was globalism that ruined this nation, they argued, and the only way to make America great again is to cut off the rest of the world. On the other side, there is an almost equally instinctual support for immigration and trade as much out of tradition as it is the thinly held belief that the system in place obviously made the nation strong.

Where is the truth? Like most debates, somewhere in the middle – or just off to the side a little. America is wealthier and better as part of the world, but the expense of trying to run the planet and tell everyone what to do is killing us. More to the point, it’s falling on working people who are expected to support it as a vanity project and chant “U-S-A!” while the benefits accrue to those with a lot more money to start with.

It can be changed. It has to be changed. It will change – either by design or by collapse.
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US vs The World

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The Bureau of Labor Statistics (BLS) announced the addition of 223k jobs in May, bringing the unemployment rate down to 3.8 percent. Labor markets are tighter than they have been since the Managed Depression started in 2000, and there is upward pressure on wages. What could possibly screw it all up?

How about a global trade war pitting the US against every other nation on the planet?

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Unlimited Credit

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This post from November 2015 is becoming more important as the federal deficit ratchets up and private credit is turning back up.  I am leaving in the references to Sanders and progressive counters because they may well be current again.

If you’re like most people, you probably think that you can never have too much access to credit. After all, you never know what might go horribly wrong or when an opportunity to really follow your dream might come up. A little scratch ready in the background might be the difference between the good life and something much less.

Then again, a lot of credit has a corrosive effect. In a world saturated with borrowing everything is judged against the expected return if the money was simply loaned out at market rates. It seems reasonable that where a little credit is a good thing a lot of credit, defining everything in the world, is the biggest enemy of both long-term thinking and a society looking to maximize happiness and human potential.

Logic says that where a little credit is good a lot could be bad, meaning there is an optimal point. Where is that? Where are we with respect to a good level of credit? It turns out that train left the station a very long time ago – and this may explain a lot of the problems in this economy.

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Risk and Reward

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The basis of any capitalist or free market system is risk analysis. Every investment, whether in time or capital or short-term inventory is made based on the potential reward for success and the potential risk of failure. Because these events happen in the future, confidence or anxiety often play a large role in the process.

Generally speaking, it’s all about the availability of the critical resource being invested. People with nothing left to lose often put their time into a project because their time is all they have. Capital markets flush with cash are often looking for places that will give them a big return. Yet in all of these cases, emotions eventually become important.

Lately, nerves are raw. Investment? You gotta be kidding.

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Dynamic, not Chaotic

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Our world appears more chaotic by the day. Some people enjoy the chaos, especially those who are looking for cover for their own misdeeds. Others are horrified by it, as they rely on a stable world to manage their vulnerabilities and look after their family.

What has caused this chaos? In a certain sense, it’s globalism. A world closer together is a world with seven billion neighbors and a lot more complex than a small town of 10,000. But globalism, as a concept, is a big word which easily hides important details. It’s a cop-out, a big term that shades more than it illuminates.

I have come to believe that what causes chaos is the move to a genuine market-based world from an industrial world. Attempts at understanding and controlling the world using old industrial models are failing terribly. The move to marketism is not defined by globalism, as it was, but defines globalism and the increasing irrelevance of nations as we know them.

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