Inflation is in the Rear-View Mirror - Mish Talk One of the critical aspects of the progressive movement is the elimination of individual responsibility and replacement of it with corporate collectivism. To Boomers and other progressives, the optimum outcome is zero responsibility married to a libertine society. This is why the progressive left is so antagonistic towards concepts like self-defense, and responsibility for one's actions. Only the state should have agency, the individual is an infant and should be only allowed the responsibilities of infancy. More below. One of the problems which arise from the elimination of individual responsibility is that people stop behaving prudently. Debt skyrockets, poor eating habits multiply. But the progressive politicians find all of this attractive. This means they have an endless number of problems which need to be addressed for which they will spend endless amounts of other peoples money.
We saw the same problem during the last decline period in American history, from 1908-1928. The result of this debt binge was the stock market crash which front ran the Great Depression. It took the Depression and WWII to correct America's vices and return us to the straight and narrow. Unfortunately, the Boomers decided the straight and narrow was not for them and kicked all of that to the curb when they kicked off the spiritual awakening beginning with the Summer of Love in 1967 and continuing through 1984 or so. The period that followed was the culture wars, with its atomization, increasing anti-responsibility ethic and the endless internecine warfare of gender, race, class, and culture. The Obama election, the great housing asset devaluation, and the Great Recession kicked off the fourth American crisis epoch, but Obama would not let the culture wars wither. He tragically reignited the gender, race, class, and culture wars for an additional eight years. It was not until the election of Trump that we were able to hack our way through the culture wars thicket. Because the decline epoch (the culture wars) lasted nearly 30 years instead of the more common 20, it is likely to take more effort to move beyond them finally. It also allowed these problems to be come more dangerous. Today the pension crisis, the state and local government funding crisis, the college debt crisis, the individual debt crisis are all far deeper and more advanced than they were a decade ago. I am not convinced that we will see a recession, I think we are likely to see a period of point specific asset deflation and sector recessions. The housing market is again ripe, as are auto loans, and some other debt specific industries. I also believe that we are likely to see the beginning of a massive, highly destructive debt spiral swallowing state and local governments, pensions (public and private). I am not sure what to make of student loan debt, it is out of control, and an amazing number of students are no longer servicing their student debts. I don't see these debts ever being repaid. On the other hand, I do not see an economy-wide general business cycle recession. The last recovery was not a recovery at all. Businesses not saddled with debt are ready for growth, as are Americans. I suggest we could see the anomaly of general economic growth with a devastating debt crisis and sector recessions with the main hit being taken by the public sector. Like Mish, I believe this will be a period of sustained deflation. Not only for the reasons he sees but also America's demographics show the nation as much older then we were during the last bout of inflation. We also have fewer children. Structurally the nation is not shaped to create inflation. It is shaped to create deflation. The sooner we throw off the oppressive yoke of progressivism and its collectivist root, the faster we will be able to move away from the problems which are bedeviling us at the end of the progressive era. The longer we wait, the more damaging the end of cycle economic consequences. Can we move on from progressivism now?
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