The Twilight-zone Economy Resulting From Covid-19

Currently, our economy is caught somewhere in the Twilight-Zone, a place that exists for moments but where wrong decisions often lead to madness. While this is happening a great deal of the population sits at home trying to ignore the reality developing outside their walls. The truth is we will not know where we are until we reach the other side. When that will be is uncertain but do not expect the economy to land on its feet. Hopefully, it will not be as bad as many hyped-up doom-porn forecasters predict, unfortunately, covid-19 has taken a heavy toll on society. This is not intended to be a fluff piece but to hit on some key realities we face going forward. As much as we would like to put this behind us this world altering event is still very much in our face.

Governments and mass media have done a very poor job of handling this crisis. Promises of having enough test available remains a lie in the state where I live and most others. If people can't get tested and are sent home to rest until they turn blue it is safe to say we really don't know the extent of this crisis. Call it what you what but most people will concede that we have witnessed cover-ups, misinformation, the bungling of aid, and corruption. To say we have been failed is an understatement. Yes, covid-19 is an ugly beast but if this had been handled properly this might have all gone down very differently.

China Is Selling Defective Medical Equipment

The Gatestone Institute and several other sources recently reported that a great deal of the medical equipment purchased from China by governments to combat the pandemic is proving to be defective and unusable. China's flooding the world with such products highlights its role in this mess as an unreliable and corrupt state. This should blow a hole in anyone thinking a vaccine might result from accelerated testing done in China. The World Health Organization (WHO) now sporting a tarnished reputation because of its cozy relationship with China, has just come out stating there is currently no evidence that people recovered from covid-19 are protected from a second infection. Because of this it now is advising against the idea “immunity passports” will work. Many experts expect this to be an issue for at least the next 18 months.

Government failures appear to have coupled with acts of government overreach, this means taking advantage of the crisis to extend control over their populations. Some rather overzealous tactics and a massive propaganda campaign has been unleashed upon us to convince us what they are doing is for the greater good. Reports of heavy-handed enforcement by government thugs, drones watching us from above, and other kinds of beefed-up surveillance have resulted in putting hundreds of millions of citizens under a form of house arrest. This has conditioned the masses for similar incarcerations in the future and goes far past "shades of totalitarianism." They have even incorporated and leveraged the ever-present smartphone as an ultra-powerful surveillance device.

Circling back to the economy, as expected, this crisis has impacted some people far more than others. This post is to focus on that point. as far as workers go, as usual, government workers have for the most part been sheltered from the storm. Some sectors of the economy have been decimated by social distancing and the shutdown of what has been deemed non-essential businesses. A few high profile standouts are, airlines, cruise ships, and sport and concert venues. Before this is over, the government's reaction to covid-19 will most likely prove it cannot clean up the mess it creates by simply throwing money at it.

Following the financial crisis of 2008, governments and bankers have joined together to form the "Financial-Political Complex." The bailouts they have endorsed have become a threat to our financial system. For over a decade the actions of this group have destroyed true price discovery and increased inequality. While this alliance recently halted and reversed the carnage taking place in the stock markets it did little to solve the core issues we face. Now with politicians from states and city governments that have mismanaged their finances for decades are calling for a bailout which will take the nation farther down this rabbit hole.

Still, much of this pain has and will be felt in the private sector. This event will be particularly harsh for most of the 30 million small businesses stretched out across America. The PPP set to aid these businesses has been a dismal failure and that is not expected to change even when more money is poured into it. Ninety percent of America's businesses employ less than twenty workers but in total, they count for over 54 million jobs. These companies often do not have the deep pockets or ability to borrow money to get through these rough times. This means we can expect a domino effect to develop as they close and many default on existing obligations such as rent and money owed to their vendors. Expect this to be a drawn-out process that will linger for some time.

The legacy of this pandemic will be a high level of long-lasting unemployment not witnessed in decades and ballooning deficit spending. Already we are seeing the term "helicopter money" thrown around and calls for more. This refers to unconventional methods used to get money into the hands of people that will rapidly put it to use. Whether to buy products or pay bills it is often seen as a way to kick start a stalled economy in need of a boost. Unfortunately, the world will soon see that it is a very inefficient way to achieve economic growth.

Rather than stimulating activity where needed most, helicopter money tends to get sucked up by those who need it least. Big business, the bankers, and the crony capitalist will be the big winners coming out of this world-changing event. Paying people not to work is not the way to build a strong economy. As we go about reopening the economy, the long term economic ramifications that will emerge from  the events of the last few months will haunt us more than most people can ever imagine. The middle-class is the big loser, we the masses are again paying the price for bailing them out


Footnote; Hopefully populations will learn from this we have become a society of slaves and freedom is just a word unless governments are held accountable. The control over the individual will become complete as they move us towards being a cashless economy. This translates into where we will be unable to buy food, may at any moment have our ability to message others cut, and will be forced to rely on autonomous vehicles to deliver us to our destinations. The article below delves into just how fast the noose is tightening around our necks.
 https://brucewilds.blogspot.com/2019/01/power-of-orwellian-state-almost.html

"It Will All End Badly" The Coming Economic End Game

The wonderful thing about numbers is that when they are not jockeyed, jerked around, and falsified they tend to tell the truth. Continuing on this thought looking down the road the numbers do not work. This is where the late, Allen Meltzer, recognized for his wisdom and achievements in economics, enters the story. Meltzer was a professor of political economy at Carnegie Mellon University and a visiting fellow at the Hoover Institution. He authored the three-volume “A History of the Federal Reserve” and for over 25 years he chaired the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve.

Allen Meltzer On YouTube (click to start)

To say Meltzer was not a fan of the economic policies that have unfolded since 2008 is an understatement. “We’re in the biggest mess we’ve been in since the 1930s,” he has been quoted as saying, before he went on to claim that, “We’ve never had a more problematic future.” This is about a person born in 1928 that while viewed by many economists as America’s foremost expert in monetary policy is little known by the masses. Meltzer was not been a fan of recent economic policy.

In a Wall Street Journal opinion piece on June 30, 2010, titled "Why Obamanomics Has Failed" Meltzer wrote about how uncertainty about future taxes and regulations was the biggest enemy facing future economic growth. He goes on to say that the administration's stimulus program failed. Two overreaching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future.

Soaring National Debt -  click to enlarge

Meltzer said most of the earlier spending was a very short-term response to long-term problems. Part of the money financed temporary tax cuts, this was a mistake because it ignores the role of expectations in the economy. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Another large part of the stimulus went to relieve state and local governments of their budget deficits. Transferring a deficit from the state to the federal government changes very little. Some teachers and police got an additional year of employment, but their gain is temporary. Any benefits to them must be balanced against the negative effect of the increased public debt and the temporary nature of the transfer.

This seems to coincide with what Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term, it makes the economy feel good, but in the long run, it is much worse off. What was once the "long-run" or "distant future" may be getting very near. Soon the dollar and the American economy will be nearly dead. I recently reviewed a book I read years ago, in his book "A Time For Action" written in 1980 William Simon, a former Secretary of the Treasury tells how he was "frightened and angry".  In short, he was sounding the trumpet about how he saw the country was heading down the wrong path. Looking back, it is hard to imagine how we have made it this long without addressing the concerns that Simon wrote about so many years ago. Back then it was about billions of dollars of debt, today it is about trillions of dollars.

People have been forced into riskier assets because of low-interest rates. When interest rates rise, as they will at some point, the value of these risky investments will decline, and these investors will be hurt. Making things worse is the fact that interest payments on the public debt will rise increasing the budget deficit which has grown massively in past years. It is clear that prices in some sectors of the economy have been rising rapidly and major distortions exist within the marketplace. When the large "too big to fail" banks like Goldman and Bank of America report they made profits in the market on roughly 95% of trading days in 2012 we have to raise an eyebrow. This is an indication that the game is manipulated as no trader is that good.

Returning to Allen Meltzer he penned a piece that appeared in the Wall Street Journal in May of 2014, in the article Meltzer gives his take on where the economy is headed. I highly value his opinion, not only because it is based on his long developed work and studies, but he seems to have far less motivation to lie than many of those currently involved in forming policies today. Meltzer wrote;

     The U.S. Department of Agriculture forecasts that food prices will rise as much as 3.5% this year, the biggest annual increase in three years. Over the past 12 months from March, the consumer-price index increased 1.5% before seasonal adjustment. These are warnings. Never in history has a country that financed big budget deficits with large amounts of central-bank money avoided inflation. Yet the U.S. has been printing money—and in a reckless fashion—for years.
    The Obama administration has run huge budget deficits every year, which, together with the Bush administration, has amounted to $6.7 trillion from 2006 to 2013. The Federal Reserve financed almost $3 trillion of these deficits by purchasing Treasury bonds and notes. The Fed has also purchased massive amounts of mortgage-backed securities. Today, with more than $2.5 trillion of idle reserves on bank balance sheets, there is enormous fuel for greater inflation once lending and money growth rises.

    To avoid the kind of damaging inflation the U.S. experienced in the 1970s and early '80s, the Fed could raise interest rates, including the interest it pays banks on reserves, inducing banks to hold most of the $2.5 trillion of reserves idle. But interest rates high enough to discourage borrowing and lending would likely send the economy into another damaging recession.

    Fed Chairwoman Janet Yellen recently admitted that the central bank doesn't have a good model of inflation. It relies on the Phillips Curve, which charts what economist Alban William Phillips in the late 1950s saw as a tendency for inflation to rise when unemployment is low and to fall when unemployment is high. Two of the most successful Fed chairmen, Paul Volcker and Alan Greenspan, considered the Phillips Curve unreliable. The Fed's forecasts of inflation ignore Milton Friedman's dictum that "inflation is always and everywhere" a result of excessive money growth relative to the growth of real output. 
    The Fed focuses far too much attention on distracting monthly and quarterly data while ignoring the longer-term effects of money growth. The country's present dilemma originated in 2008 when the Fed properly and forcefully prevented a collapse of the payments system. But long before idle reserves reached $2.5 trillion, the Fed didn't ask itself: What can we do by adding more reserves that banks cannot do by using their massive idle reserves? The fact that the reserves sat idle to earn one-quarter of a percent a year should have been a clear signal that banks didn't see demand to borrow by prudent borrowers.
    The Fed's unprecedented quantitative easing since 2008 failed to lead to a robust recovery. The unemployment rate has gradually declined, but the main reason is that workers have withdrawn from the labor force. The stock market boomed, bringing support from traders, but the rise in asset prices of equities didn't stimulate growth by inducing investment in new capital. Investment continues to be sluggish.
    And some side effects of the Fed policies have had ugly consequences. One of the worst is that ultra-low interest rates induced retired citizens to take substantially greater risk than the bank CDs that many of them relied on in the past. Decisions of this kind end in tears. Another is the loss that bondholders cannot avoid when interest rates rise, as they have started to do.
    Accumulating data from the sluggish loan market and the weak responses of employment and investment should have alerted the Fed that the growth of reserves and the low interest rates haven't been achieving much. Similarly, the Fed should have noticed in recent years that instead of a strong housing-market recovery, not many individuals were taking out first mortgages. Many of the sales were to real-estate speculators who financed their purchases without mortgages and are now renting the houses, planning to resell them later.
    Most of all the Fed years ago should have recognized that the country's economic problems weren't arising from monetary factors. Instead of keeping interest rates low to finance deficits, the Fed should have explained that costly regulation, increased health-care costs, wasteful spending and repeated threats to raise tax rates were holding back the recovery.
    Broadly speaking, the Obama administration has pursued a course the opposite of that taken by the Kennedy and Johnson administrations in the 1960s (and the Reagan administration in the 1980s). Kennedy-Johnson enacted across-the-board tax cuts: Promoting growth came first, redistribution later. By putting redistribution first and sacrificing growth, the Obama administration got neither.
Ironically, despite often repeated demands for increased redistribution to favor middle- and lower-income groups, the policies pursued by the Obama administration and supported by the Federal Reserve have accomplished the opposite. 
    When the president campaigns in the midterm election, he will talk about the relative gains by the 1%. Voters should recognize that goosing the stock market through very low interest rates, not to mention the subsidies and handouts to cronies, have contributed to that result. We are now left with the overhang. Inflation is in our future. Food prices are leading off, as they did in the mid-1960s before the "stagflation" of the 1970s. Other prices will follow.

The point of this post is to clarify that just because we have muddled along putting band-aids on our economy does not mean that we have accomplished a great deal. The Trump economy has been a continuation of deficit spending. We have postponed the day of reckoning but most likely made it far worse. Allen Meltzer was a true old school economist that understood this. The time the Federal Reserve has bought for the country to come to terms with its many problems has been squandered at a great cost. While many people claim the American economy was great before covid-19 hit, others like me who work on Main Street beg to differ. For years, an ugly reality has been masked by easy money and deficit spending. While it is difficult to time when our false economy will finally give up the ghost, it is clear this will all end badly.


Footnote; I'm afraid this has become a two-part article because of its length. The second part which focuses on where all the is likely to lead will be published soon. For more information on how we got to this point, the link to a piece titled, "The Shocking Trillion Dollar "Budget Busting" Deficit"
 https://brucewilds.blogspot.com/2019/12/the-shocking-trillion-dollar-budget.html

If Deficits Are Good, Why Not Stop Taxation Altogether?

Pure Joy Would Erupt If Taxation Is Stopped

Half in jest a few years ago, in an article, I suggested that taxation be stopped altogether. With so many people no longer concerned about deficit spending the idea now seems more viable. With so many people thinking that deficit government spending helps drive the economy at some point our leaders and those across the globe might want to give us taxpayers a break. Why not stop taxation entirely? Just End It! Such a policy would go a long way to diminish the divide polarizing our nation.

I do not know anyone who likes to pay taxes or go through hours and hours of record-keeping and filling out forms in order to comply with our complex tax system. According to the Tax Foundation, Americans spent more than 8.9 billion hours complying with IRS tax filing requirements in 2016. All in all, tax compliance cost the U.S. economy $409 billion during those 12 months. As you know, things have not gotten any easier since that time. With the soaring deficits flowing out of Washington and policies that show no respect for the money hard-working Americans pay into the system lets do this!

Over the years Washington and governments in many countries have shown little in the way of financial restraint. If deficits don't matter it seems logical that spreading the wealth around by something other than policies focused on redistribution through such a complicated system has merit. Both economists and politicians have considered many over the top solutions to resolve the problem of slow economic growth in a global economy mired in debt. In the past, cutting taxes has been a favorite method to spur consumer spending and pump up growth. The suggestion of placing taxation in the dustbin of history is merely an extension of this idea.
 

No Taxation Means More Money For Everyone!

If indeed cutting the ties binding us to responsible budgets is the solution to our economic woes and holds the key to prosperity being timid may not have served us well. Forget all the previously considered outlandish ideas, such as a war on cash, forgiving debt through a debt jubilee, giving everyone a guaranteed income, and even injecting money into the economic system by dropping it from a helicopter. Ending taxation in many ways can be seen as having the same effect of economic stimulation.

This is only one in a series of  easy plans to jump-start the economy, the next part when I get around to writing it will be titled, "Just Print More Money." Both plans constitute a better alternative than going to war to kill off excess labor while ramping up production of self-exploding equipment or building bridges to nowhere. If history is any indication, wealth and jobs flow into any country that has low tax rates so why not take it to the next level. While you could demand that I parade a slew of complex figures and calculations before you proving all this will work, I simply ask you to please show me the same kind of trust we give to those leading us from Washington.

My proposal could be passed in a bipartisan way and should make everyone happy. It should please both Trump voters who claim enough is enough and want to pay way less in taxes as well as those on the far left who can't get enough free goodies. By shattering the link between taxation and spending we can be far more generous. So I say, eat your heart out Paul Krugman, and you too Ben Bernanke. With all the time both of you have spent pondering the economy in the ivory halls of academia, you have come close but it is I who have proposed the next step in our financial evolution. Ending all taxation of any kind will not render the laws of economics moot or move us much further into the false state of modern voodoo economics than we have already traveled and it is guaranteed to work until it no longer does.


Footnote;  Some people fail to recognize the whole Trump economy has been based on huge deficit spending. We must face the fact that deficit spending can only take a country's economy so far and carries with it a fair amount of negatives. The article below explores Trumponomics in all its glory and why this won't end well.
https://The  https://brucewilds.blogspot.com/2019/04/the-trump-economy-is-mirage-based-on.html

Unemployment To Soar As Small Business Firings Start

Unemployment Is Set To Soar!

The Paycheck Protection Program or PPP was funded with $350 billion in the last stimulus bill, this money is now gone. Of the thirty million small businesses in America, only 1.7 million received money from the 2.3 trillion dollar aid package passed to help sustain America during this difficult time. If the government blew through this money and was only was able to help only around 5% of small businesses it is difficult to think another 250 billion dollars will set things straight. Clearly, because the government made promises it delayed the wave of firing while companies waited for help. 

The government has failed to keep its promise so now we should expect unemployment to soar as reality sets in. One of the largest problems facing small companies is they are often underfunded and have difficulty getting financing at reasonable rates. Banks find larger companies much more profitable. The sector of the economy most damaged by the covid-19 shutdown is small business. When this is over America will find many small businesses have been decimated and are not able to reopen. Others will never recover and be forced to close within months. Since small businesses employ over 54 million people in America and their importance in the economy should not be underestimated.

• Small businesses contribute 44 percent of all sales in the country.
• Small businesses employ 54.4 million people, about 57.3percent of the private workforce.

Rest assured government employees and bureaucrats will still continue to get paid but small business, the most productive part of the economy has a knife to its throat. As a landlord and small business owner, I can tell you the program was structured in a way that will be of little help to most small businesses. The government slammed expensive legislation through with no idea of the damage they were doing and how it will cause hundreds of thousands of businesses to close their doors forever. Washington has become so attuned to dealing with lobbyist from mega-companies it has lost sight of the fact small is small, and when this comes to business, this means usually under twenty employees, not hundreds.

90% Of Businesses Are Small (click to enlarge)

The government's answer to keeping people employed was to promise small businesses an easy to get, rapid maximum loan amount of two and a half times a company’s average monthly payroll expense over the past 12 months. This loan would turn into a grant and be forgiven if a company did not fire its employees. Sadly, legislators failed to take into consideration that not all small businesses are labor or payroll intense. Some businesses with large or expensive showrooms are getting hammered by rent, others by inventory, or things like taxes, utilities, or even by having to toss products due to spoilage. 

The PPP also failed to address the issue of what these employees are going to do while the company has no customers and business barely trickling. In the past, these employees were expected to pursue activities that earned revenue and garnered profits for the business but with no costumers, this is difficult to do. The PPP also ignored the fact that by keeping these employees on the payroll a generous employer is left open to the harsh mandates laid out in the government's previous bill. The hastily drawn up 110-page federal covid-19 economic rescue package, which Trump fully supported dealt a hard blow to small business. For a small business this is a disaster, the bill requires; 

• Employers with fewer than 500 employees and government employers offer two weeks of paid sick leave through 2020.
• Those same employers must now provide up to 3 months of paid family and medical leave for people forced to quarantine due to the virus or care for family because of the outbreak

As expected, this measure,  named "Families First Coronavirus Response Act." resulted in millions of workers to suddenly lose their jobs. Ironically, it was held before the voters as proof lawmakers could work together during a crisis.  By framing the poorly crafted pork-packed bill this way promoters positioned themselves to demonize those unwilling to support it. Remember, this bill is was in addition to the $8.3 billion emergency spending bill first approved to curb the spread of covid-19.

The Private Sector Is Shrinking (click to enlarge)

As government has grown larger it seems to have become totally oblivious to the fragility of many small businesses and how much it can cost a community when they close. By framing these pork-packed bills as bipartisan their promoters imply they are fair and balanced. This is not true, small business is the big loser and hundreds of thousands will soon have to close.  With so many tenants looking at foregoing rent small landlords that don't have deep pockets also face huge problems. We have our heads in the sand if we think companies that exist on events where people gather will overnight regain their luster. It is not like someone can simply flick a switch and things will return to normal. 

Reality undercuts the idea of the “V-shaped recovery” theory and the idea after the economy has come to a dead stop it can quickly reboot and be back at full speed in a few months. The government has presented us with an extension of crony capitalism structured to throw just enough to the masses to silence their outrage but in the coming weeks, we will see it failed. Large businesses with access to cheap capital are the winners and the big losers are the middle-class, small businesses, and social mobility. All those people that want a higher minimum wage can forget that ever happening if we don't have jobs.

As for just how much small business owners make, according to figures from 2015 from the Small Business Administration the median income for self-employed individuals at an incorporated business was $49,804 and $22,424 for unincorporated firms. According to PayScale’s 2017 data, the average small business owner's income is $73,000 per year. But, total earnings can range from $30,000 – $182,000 per year. This means it varies greatly depending on where and just how big the business is, however, it is important to remember these people have "skin in the game" and most risk losing everything if their business fails.

It is important to recognize that starting your own business has always been about the opportunity to design and build your own future. It is a symbol of freedom not a guarantee of wealth. Many people choose this path proudly, not to make more money but as a way to express their individuality. For these competent and talented people, a job in government or at a large company often offers more security and benefits but far less freedom. Do not underestimate the value of small business and what it contributes to our society. Companies such as Amazon are the anti-thesis of small business making their workers a cog in a machine and stealing their soul.

Based on the government's promise to small businesses a great many held off on letting employees go but with each passing day in order to survive they are now in the process of letting hundreds of thousands of employees go. This is a ticking time-bomb. By telling these businesses to close and then through its failure to carry out its promise of helping them the government has created a situation with massive negative economic ramifications. To make matters worse, people going on unemployment look to get almost as much as those that do work. Why will anyone want to work, especially government workers when they can get paid to stay home? This is not about wanting more money for small business, it is about the reality that the firings are just beginning.

The Government Shows Little Respect For Our Tax Dollar

Hard-working Americans that pay taxes should be more than angry over how little respect the politicians in Washington have for their tax dollars. An article that appeared on MarketWatch details what people that receive an undeserved 1,200 dollar stimulus checks under the CARES Act should do.  The answer appears just over halfway down on the page in answer to the following question; 

Question: I believe that my adult son received a $1,200 EIP, via automatic deposit to his checking account, that he was not entitled to because he is my tax-return dependent. Will the IRS go into his checking account and debit it to get the money back? 

Answer: No. The statutory language in the CARES Act that set the whole EIP scheme in motion says that anybody who gets more money than they are actually entitled to can keep the excess. I endorse that concept: any money that gets into people’s hands is fair game.

In the above case, it appears the fella received the money in error but I have heard, and I'm also under the impression the same issue exists in the case where a check is sent to somebody that is deceased. The article explains the Feds are using our beloved Internal Revenue Service to distribute these so-called Economic Impact Payments (EIPs). The IRS is not currently processing 2019 returns because the agency is swamped with all the new COVID-19-related tasks it has been given.

The article also states the IRS’s data processing systems were notoriously inadequate even before getting overwhelmed with all these new tasks. Apparently to those in our government, 1,200 dollars isn't worth the time it takes to do the administrative job of reclaiming it. From what I understand we are talking about checks that total several billions of dollars. This type of waste is just another example of why people don't like paying taxes.

Mankind Should Consider Planning A Sustainable Future

Sustainability Remains Critical To Our Future

Much of the world's economy has ground to a halt due to the covid-19 pandemic. This highlights that we should occasionally take a few moments to reflect on where we are, and just as important, is where we are going. Only to the most self-centered individuals with no children, family or friends can the issue of creating a sustainable future not be an issue of importance. In many ways, it should be considered "job one" in our rapidly changing world.

Still, the job of planning for a more sustainable future is almost always put on the back burner and ignored because of both political and economic ramifications. Sustainability means planning our future in a way that we do not set ourselves up to crash and burn at some future date. Long-term planning is not something politicians excel at or are even good at. Most political systems are geared at getting politicians re-elected and meeting the most pressing needs of today and not tomorrow.

Over the years the human race has become productive enough that we can afford a gentle kinder world if we stop governments from taking a huge share of this wealth to wage war and spy on its citizens. The human race has allowed things like profit, greed, and our unquenchable desire for growth to be placed in front of longer-term issues and needs. Of course, mapping out a logical and sustainable long-term plan requires delving into some rather hefty philosophical questions such as what brings real happiness. We also have to think about what kind of society and world future generations might want to live in and properly recognize the role of the human-animal in the overall scheme of things. Considering that we as human beings rarely can agree about anything also creates a barrier to planning for a more "distant future."

Population Has Soared In Last Two Hundred Years

As the population has soared during the last two hundred years, man has spread out and constructed infrastructure across the planet to support this growth using more natural resources than at any time in history. Already more infrastructure is needed and the repairs required to maintain what we have already built will be staggering. It appears we lack the courage to even discuss these issues in any real way.

Do not expect to be guided by politicians, the super-wealthy or most business leaders. Few people are willing to come out and say the recently adopted modern model of life based on lifestyles developed in America and western society are unsustainable. The few that mutter these words are often scorned. This could all be considered part of a giant conspiracy of silence but is more likely a head in the sand act of denial, an act that could lead to our demise. 

Jeremy Grantham’s investment firm GMO manages about $110 billion in assets. He also backs the Grantham Institute of Climate Change at London’s Imperial College. He says population growth is a huge “threat to the long-term viability of our species when we reach a population level of 10 billion” because it is “impossible to feed the 10 billion people.” Billionaire Bill Gates says we should cap the global population at 8.3 billion at the same time his vaccine and other programs are extending life expectancy. Columbia University’s Earth Institute Director Jeff Sachs says even 5 billion is unsustainable. To stop adding more people our population is tough enough. But how do we eliminate two billion from today’s seven billion total? Voluntary? 

War Has Turned Cities Like Mosul Into Rubble

The only thing most people agree upon is that huge problems are going to arise. As the world continues to develop the importance of design and quality are factors that cannot be stressed enough. As the world's population soars we cannot afford the wasteful luxury of constructing buildings that grow obsolete or must be replaced every few decades, buildings should last for centuries. We also cannot afford to bomb and lay waste to whole cities killing and destroying what so many have worked so hard to create. How we use our new skills and the choices we make will determine if mankind blankets the world with Las Vegas-style resorts on every corner, fills the skies with glass towers, or constructs homes and shelters suitable for our fellow man.

Man Is The Cause Of Pollution (click to enlarge)

Today developing countries such as China and India that have huge populations of have-nots are rushing to follow the same flawed pattern of growth that was pioneered in America. The creation of huge wealth in China has manifested itself in conspicuous consumption as people rush to show their success. Poor planning has not promoted a lifestyle of efficiency and social interaction but has encouraged the private automobile with its massive support system of highways and the construction of more high-rise towers. The ability of the planet to sustain our modern lifestyle is very questionable.

This new way of living may be far too resource-intense to stand the test of time. We should remember that for most of his 60,000 years on earth man has been a minor consumer of the earth’s stores of energy. It is only with the discovery of fire that man began to increase his demands and draw on the short-term energy stores that had been accumulated over decades and even centuries by woody plants.  Only in the last hundred years with the invention of the internal combustion engine and a huge increase in population has man begun to tap the planet's long-term energy supplies of oil and natural gas at an alarming rate.

In merely a blink of an eye, we have shaped a world where our lifestyles revolve around and are dependent on oil and the consumption of energy from fossil fuels. To those naysayers of problems ahead that point to lower birthrates, it should be pointed out that longer lifespans mean more people remain alive at any one time. Statistics showing we must drill deeper and deeper to find fresh pools of oil do not lie. This is not an endorsement of some kind of "carbon tax" as much as it is a call for better planning and less waste. the sooner we move in that direction the better off we will be.

“One of the disturbing facts of history is that so many civilizations collapse,” warns Jared Diamond, an environmental anthropologist and author of the classic “Collapse: How Societies Choose to Fail or Succeed.” History shows that many failed civilizations share a sharp curve of decline which is usually totally intertwined with the economy and everyday life. A society’s demise may begin only a decade or two after it reaches its peak population, wealth, and power. Over the last few years the threat of nuclear war has increased but even more frightening is the acceptance of such an event as a way of resolving problems. Can we halt a major calamity before it’s too late? Don’t bet on it, watching how those in Washington and other capitals avoid dealing with the challenges we face is far from encouraging.



Footnote; The above article dovetails with many of my recent writings, below are a few related to this subject. Other articles may be found in my blog archive, thanks for reading, your comments are encouraged.
http://E-Waste Disposal Major Failure Of And By Government.html
https://brucewilds.blogspot.com/2019/01/power-of-orwellian-state-almost.html http://brucewilds.blogspot.com/2018/07/politicians-shy-away-from-dreadful-c.html
http://America Did Not Vote For More Death And Destruction!html
http://Mankinds Struggle Viewed Through The Peter Principle.html
http://brucewilds.blogspot.com/2018/04/the-lowly-penny-and-why-it-should-go.html

Easter Amazon Deliveries By USPS Deserve Our Scorn

This Is So Very Wrong!

During a walk on Easter I observed a United States Postal Service truck out doing its Sunday Amazon deliveries. This action should be scorned by all Americans. Amazon is a company that both Trump on the right and Sanders on the far left have decried, this leaves me wondering why so many Americans continue to buy its goods. An article on MarketWatch in 2018 reported how President Trump personally pressured Postmaster General Megan Brennan to raise the charges Amazon and other firms pay to ship packages. At the time, Brennan resisted Trump’s demand pointing out that the rates are set in contracts and that the Amazon relationship was beneficial for the Postal Service.

How Brennan defines "beneficial" and whether the deliveries are profitable are two different animals. Also, even if they are beneficial to the USPS using Brennan's definition we should consider they are coming at a great cost to both brick and mortar stores as well as to other shippers using the system. This was sometime after President Donald Trump had signed an executive order creating a task force to study the United States Postal Service. Trump said that USPS is on "an unsustainable financial path" and "must be restructured to prevent a taxpayer-funded bailout." The task force was assigned to study factors including USPS's pricing in the package delivery market and had 120 days to submit a report with recommendations. Trump's claim the service should be charging more was backed up by a 2017 report by Citigroup that supported his claim, it concludes that the postal service was charging below-market rates as a whole on parcels.

Package Delivery Is Often Very Challenging

As it continues to struggle with losses year after year the United States Postal Service is an example that something as basic as delivering a package can be costly and no easy task. This is especially true when you are responsible for taking it the last mile or to the doorstep located down the road, up the hill and through the woods in sparsely populated areas. Amazon started taking most of its packages directly to the Postal Service in 2013, a way of avoiding the expensive last leg of the delivery in high-density metro areas as well as on America's backroads.

The fact the USPS goes to these locations regularly doesn't mean Amazon "deserves" the right to be able to tag along at the same rate they would pay for a package delivered across the street. The true or real cost of putting Amazon packages in the hands of consumers is not easy and forces us to circle back to another big issue and that centers around the cost to society and other American retailers. When you consider that the USPS has had to purchase special equipment such as larger trucks to deliver packages for Amazon it is not difficult to reach the conclusion the USPS is simply in cahoots with Amazon or willing to sell out the rest of American businesses for a few dollars in revenue.

It should be noted that rather than expanding to delivering to Sunday most USPS watchers have for over a decade advocated dropping Saturday deliveries as its importance declined with the fall of first-class mail.  Also, a case can be made that any shift of business away from UPS, FedEx or any other delivery company will not add jobs but merely shift them from one company to another. The bottom-line here is that far more goes into deciding the optimum shipping rate than simply whether the USPS makes money. Also of concern is the issue that Sunday deliveries are especially damaging to small businesses that can't afford to expand the hours to seven days a week. 

The Ugly Face Of America Betrayed

Any benefit to or claimed by the USPS is quickly negated by the cost of businesses and retailers forced to close all across America from unfair competition created by taxpayers subsidizing cheap deliveries for Amazon packages. Package deliveries should at a minimum be both profitable and not discriminate. This means they should be done for every other company at exactly the same price and terms. While Jeff Bezos would like the USPS to be a subsidiary of Amazon ready to do his bidding and calling it is not. To give a company special breaks that funded by taxpayers is in many ways simply un-American. This is especially true when the company is hellbent on exploiting the brick and mortar stores that add so much to our communities. 

Sunday deliveries that favor Amazon over other businesses are wrong but this is especially glaring during a time most small businesses across America have been forced to close due to covid-19. Even more objectionable is seeing this done on Easter when businesses normally close so people can be home with their families. The toll of these actions by Amazon and USPS are massive. Empty storefronts across America stand witness to the damage being done. When local stores and businesses close jobs are lost. While online sales have their place in the area of commerce, local retailers and distributors of goods should not be put at a disadvantage. We the taxpayers have been forced into subsidizing Amazon, a company that exploits the very stores that provide jobs and pay taxes in our communities. This is worthy of our scorn.


Footnote;  The article below delves into whether there is anyone or anything that Amazon doesn't exploit?
 https://brucewilds.blogspot.com/2019/07/amazon-quietly-exploits-everyone-and.html