Stagnation Is Not Just the New Normal–It’s Official Policy

Well I never.

Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms.

In our pay-to-play centralized form of governance, any reform that threatens the skims, privileges and perquisites of existing elites and fiefdoms is immediately squashed, co-opted or watered down.

So the power structure of the status quo has embraced stagnation as a comfortable (except to those on the margins) and controllable descent that avoids the unpleasantness and uncertainty of crisis. We all know that humans quickly habituate to gradual changes in circumstances, and that if the changes are gradual enough, we have difficulty even noticing the erosion.

So wages/salaries stagnate, inflation eats away at the purchasing power of our net income, junk fees, tolls and taxes notch higher by increments too modest to trigger protest, fundamental civil liberties are chipped away one small piece at a time, healthcare costs rise every year like clockwork, and the gap between the bottom 95% and the top 5% widens, as does the gap between the top .1% and the bottom 99.9%, productivity stagnates, the growth rate of new businesses stagnates, but it’s all so gradual that we no longer notice except to sigh in resignation.

Japan is a global leader in how to gracefully manage stagnation. Here’s how Japan is managing to maintain a comfortable secular stagnation:

Japan’s central bank creates a ton of new currency every year, which it uses to buy Japan’s government debt/bonds. This keeps interest rates near-zero, so the cost of government borrowing is kept minimal.

This also gives the government a ton of new cash to spend that it doesn’t have to raise from additional taxes. The government then spends this “nearly free” money (i.e. deficit spending) to keep the whole stagnating machine glued together.

To keep asset prices comfortably elevated, Japan’s central bank creates additional gobs of currency out of thin air every year to buy assets such as stocks and corporate bonds.

It helps if domestic and global investors are willing to buy bonds yielding near-zero, but if not, no problem, the central bank can just create another trillion of new currency and buy all newly issued government bonds. What’s another trillion between friends?

There are only two potential spots of bother in this comfy setup:

1. If all this new currency is no longer accepted as having much purchasing power by the rest of the world

2. Inflation arises despite the tender machinations of the central bank and government.

Here are some snapshots of secular stagnation in the U.S.: here’s productivity:

productivity4-17.jpg

New business growth:

new-biz-growth6-16a.png

Fulltime employment:

fulltime-employed12-16.png 

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What Really

I ran across a phrase today that brought me up short.

It didn’t make sense to me in its context.  What to make of it?

So this post is what I made of it.

I love the breadcrumbs that I have followed above. I love the ambiguity. I love how we do make of words what we will.  It is chaos, but one that is lovingly held and dropped and picked up again.  Thankfully, language is anti-fragile and improves with ‘abuse’.  By definition it improves with ‘abuse’.

Plan Yr Wrk, Wrk Yr Plan

I tell my students about the best piece of advice I ever got when my wife and I were running our chimney sweeping business. I tell them it made us a lot of money. I tell them we paid for our farm and home with this piece of advice. Now they’re attending. And what was that advice?

The owner of Copperfield Chimney Supply, Bob Daniels (Sooty Bob to everybody in the business) shared this piece of advice in a six-cassette pack of tapes which I wore out completely over the years. His advice was very simple:

So I repeat this to them ad  nauseum as they work their way through the process of asking and answering a “burning question” in their lives.

One of the tasks I ask of them is to create weekly research plans and then progress reports on the plans.  I do everything along with them, solidarity in learning dontcha know. Below is the assignment and my research plan for this week.

DEADLINE FOR RESEARCH PLAN: September 29, 2017

I want you to come up with a research plan for answering your I-Search question.  This might be a list of items you want to get done. Or it might be in paragraphs.  Make sure you prioritize. In other words, I want you to say what you will do first, second, third, etc.  If you can’t do the first item, move on to the second and so on.  Don’t let your priorities stop you from constantly moving forward.  Imagine you are a shark after your prey, the answer. You never stop moving forward.  We will discuss your plan and how you progressed through it at your conference.

Here is my research plan for the week. I will let you know how it went on Blackboard. You will have an opportunity to do so as well:

Get copy of MIchael Mosley’s book: Michael Mosley, The Clever Gut Diet.

Read Mosley’s book and mark it up looking for ways to combine it with my DayTwo data.

Prepare an email to my doctor on the kinds of bloodtests I want to include in my appointment next week.

Write my introduction where I tell my readers why I am pursuing the question.

Do a journalling exercise called feedforwarding where I imagine the results of my question as clearly as I can from 10,000 feet.

Clean up my I-Search outlines in Diigo.

Follow up on the forums I have visited and get more involved there:  quantified self forum and gut smart forum.

When they come for their conferences, we will chat about their plans and the progress they have made.  We will do this until their first draft is due in about three weeks–planning their work, working their plan, rinse, repeat.