Donald Trump Becomes a Democrat

The Democrats, especially the leadership have really backed off and are offering little or no resistants to the President’s initiatives. They are giving up on the superficial issues like the border wall and his enforcement of federal immigration statutes. It appears that there will be no meaningful opposition to Trump by the Democrats in 2020. They will have a candidate but it will be understood from the outset that the candidate has no chance.

Why the change? Donald Trump has basically become a Democrat. Continue reading

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What a Real Bear Market Looks Like

1929I will be clear. The economy in the United States is much worse now than it was in 1929 or in 1973. This will be the first economic collapse to occur following forty years of government intervention in the economy. Government has been supporting asset prices since 1987, off and on at first and finally on a daily basis.  Given the gravity of the current circumstances, the coming trouble will likely exceed what was experienced following 1929 and of course 1973.  1973To gain perspective I am posting charts of stocks 1929-1933 and 1977-1975.  Both of these bear markets occurred because given the respective resource distributions the economy could no longer grow. That is the situation today. When looking at an economy, remember that the present cannot be explained with numbers. It is all folks acting on incentives. Understand incentives and what to expect next becomes very clear.  The next bear market will likely take several years to completely hit bottom. After that there will likely be stops and starts for about ten years. This is what happens when an economy resets. The U.S. economy is way over financed. This means there is more money chasing investments than there are legitimate opportunities. On the bright side, if the country survives, this will be the stock buying opportunity of the century.
The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

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Fantasy Free Economics recommends the following blogs.

Dandelion Salad Of Two Minds Liberty Blitzkrieg Mises Institute Straight Line Logic Paul Craig Roberts

 

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The Myth of Representation

What is missing is the incentive to represent. Human beings have one general incentive, self interest. When an election takes place voters assume they will be represented when their selection takes office. The person elected is actually acquiring a licenses to exploit the citizens and pedal influence.

Surprisingly this process is never noticed. Citizens are confounded that those they elect completely ignore their wishes when they take office. How is this possible in a country full of brilliant and sentient people? The fact is that they are not brilliant and sentient? Folks are engaging in herd behavior and not actually thinking, though they insist they are.

The individual feels so important within himself, he cannot fathom that others see him as only a resource. The best way to take advantage of another person is to exploit his since of self importance. This is one of those cases where the way things are defined and the they work in practice are completely different. That is why in my Fantasy Free approach to economics, I study people in institutions according to how they function only. How they are defined is completely meaningless. Mainstream economics is built on myths about human behavior and thus offers traps rather than solutions.

Representation is possible but not in the way American’s go about their deluded political lives. The belief is “We are special so anyone we elect will naturally take care of us.” To get representation voters have to apply constant pressure and throw lawmakers out of office the minute they don’t do what is expected of them. Doing it any other way is not much different than wearing a sign around that says kick me.

 

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What a Real Bear Market Looks Like

I will be clear. The economy in the United States is much worse now than it was in 1929 or in 1973. This will be the first economic collapse to occur following forty years of government intervention in the economy. Government has been supporting asset prices since 1987, off and on at first and finally on a daily basis. Given the gravity of the current circumstances, the coming trouble will likely exceed what was experienced following 1929 and of course 1973  To gain perspective I am posting charts of stocks 1929- 1933 and 1973-1975. Both of these bear markets occurred because given the respective resource distributions the economy could no longer grow.

That is the situation today. When looking at an economy, remember that the present cannot be explained with numbers. It is all folks acting on incentives. Understand
incentives and what to expect next becomes very clear. The next bear market will likely take several years to completely hit bottom. After that there will likely be stops and starts for about ten years. This is what happens when an economy resets. The US. economy is way over financed. This means there is more money chasing investments than there are legitimate opportunities. On the bright side, if the country survives, this will be the stock buying opportunity of the century.

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The Brain and the Political Process

Politics is the art of getting people to act without thinking. Mankind’s reptilian brain or “inner lizard” facilitates that task. Truth is not used in politics. Once a notion is registered as the truth with a person’s reptilian brain it is treated as the truth. Lets call these reptilian truths. Once the reptilian brain accepts a notion as true it is treated as such usually for a lifetime. What are some reptilian truths? Here are just a few, but reptilian truths are the root of all political interaction and discourse.

The United States military fights for freedom. Every person needs a college education. Ronald Reagan was a conservative. Mankind is a freedom seeking species. Government is benevolent. Patriotism is a virtue. Politicians run for office because of a desire to serve. Presidents cause economic growth………..The list could get real long but none of these things are true. These kinds of notions are examples of reptilian truths. Reptilian truths determine how people vote.  Some may have been true at one time but none are true today.  Reptilian truths don’t change. A new generation may function in line with more reality based reptilian truths but once established, that is the way it is. Time can change a reptilian truth as new generations take over running the world. For at least forty years the reptilian truth that Roosevelt ended the Great Depression was accepted. Younger generations eventually came along and examined the facts.

The reptilian brain is concerned with survival. In aggregations of people, the reptilian brain takes over so that within a tribe or herd the thinking on big issues is standardized. There would be no peace otherwise. Suppose that in today’s world folks rejected the reptilian truth that the United States military fights for freedom. The country would be in unbelievable turmoil every time a president launched a missile attack on a foreign country.

When the United State was being established, the founding fathers had no idea how the political arena would end up operating. To have a well functioning democracy based system, at least a few citizens have to think with the larger part of their brain. That is not happening. When reptilian brains are all that is used in decision making the process is not much different than the system used by genuine reptiles. Reptiles can’t think. Humans can think but don’t.

A good politician is one who has a well developed intuition with respect to tickling the reptilian brains of constituents. Thinking is discouraged. Information is horded. Opinions are managed. Citizens are in fact in charge of government as long as the criteria for reaching decisions is all reptilian truths.

 

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The Human Herding Instinct

What are the longer term consequences of a president acting as chief executive officer and chairman of the board of the United States of America? What presidents do introduces new roles for government, then normalizes various approaches to governing.

During the 1980s, the Reagan Administration was the first to tamper with the stock market with the creation of the President’s Working Group on Financial Markets. Continue reading

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For Profit Legislation

I have been explaining that all enterprise is for profit. The difference is in who gets the profit. Single payer medicine is for profit. Obamacare is for profit. Free market medicine would be for profit. This is all because when government runs an enterprise the imaginary incentive to serve is assumed to be present. Every enterprise, government or free market is for profit because self interest is the only incentive in play. With respect to private charities they range from mostly non profit to almost entirely for profit. The label put on an enterprise doesn’t mean much. Continue reading

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Can the United States Survive a Bear Market?

If the stock market falls, it will take the rest of the economy with it.

Without rising asset prices, there would be no economic recovery. The model used for causing economic activity is the “If we build it they will come.” model. The idea is that if the wealthiest of the world’s citizen are enriched when the value of all they own rises independently of earnings and everything else, the recovery will extend all the way to the bottom of the food chain. Does the logic of this sound solid? If it does, I will remind you that the logic behind a chain letter sounds appealing. Continue reading

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Eating Out of the President’s Hand

The president of the United States has about half of the voters in the United States eating out of his hand. A 40% to 50% approval rating for any politician in this day is extremely high. He has no opposition in the Democratic Party. They are all terrified of confronting Donald Trump on any kind of serious issue. War is just fine with the Democrats. On issues like war and the tariffs virtually all politicians are on the same page regardless. On tariffs, the democrats, are completely silent. That is because, like the president, all of congress is in favor of shifting the burden of the enormous federal debt onto the backs of the bottom 95% of income earners. Continue reading

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