October 11, 2019

Upside of deep recession: depopulating the swollen professional class

A major factor overlooked by commentators on the rise in inequality, and loss of working-class collective power, is the over-production of the elite class. So far, only Peter Turchin and related academics have discussed these dynamics.

The ranks of the professional class have exploded during the rise of neoliberalism -- signaled by the explosion in college enrollments and the migration into mega-cities, compared to the populist New Deal era when hardly anyone was maximizing their career ambitions, and when they were content to stay close to their humble geographic origins.

Expanding the share of the population that is professional, or professional-aspiring, necessarily shrinks the share of the population that is working-class. And therefore, empowers the professional class, while neutering the working class. Not to mention concentrating more wealth and power in the mega-cities, while robbing it from everywhere else, including urban areas that are just not in the top tier.

A populist or socialist outcome would be for this top-heavy distribution to shed a bunch of slots in the upper layers, reducing the power of professionals to collectively hoard as much as they can, and increasing the collective power of workers to get more of it for themselves -- while remaining in their working-class jobs.

Thus, "college for all" is an anti-socialist goal. It would only worsen these tensions by further depleting the working class of members, turning everyone into strivers. The goal is for working-class people to earn more income, enjoy more benefits, have more humane working conditions, and exercise more control over how their workplace is run. They can only do that by sacrificing individual ambition for the greater good of collective bargaining power. Feeding them all into a college program, in pursuit of professional careers afterward, would make hyper-competitive individualists out of the entire nation.

The upcoming recession is going to be far worse than the 2008 financial crisis, since none of the underlying problems were addressed -- indeed, they were encouraged to fester and grow. The so-called recovery was merely the central bank printing over $4 trillion out of thin air, and handing it out to rich morons to gamble on whatever struck their fancy (quantitative easing).

Those middlemen restricted these trillions of free dollars that the central bank handed them, to the professional class and above. None of it was spent in a way that could create well-paying and humane jobs for the bottom 80% of society. This make-work program for the elites is the Shark Tank economy -- strivers competitively begging for funny-money that the investors had gotten for free ultimately from the central bank.

After the coming financial crisis, though, the central bank will not be able to do the same thing. The success of the last / current project of quantitative easing owed to belief that it would be undone over the course of the recovery. Supposedly, the central bank was not permanently monetizing a shitload of debt that it took on via creating the over $4 trillion that it handed out to the financial elites. That was only supposed to be an emergency measure, and the central bank would contract the money supply that it had so massively inflated.

So, everyone treated the funny-money as though it were real -- if you had a social connection to the central bank, through however-many layers of financial middlemen, congratulations! You could live like kings and queens, despite doing unproductive work.

Only now that the central bank has failed to minimize its debt burden, and has already announced further rounds of quantitative easing -- to zero positive effect in the stock market, contrary to the original rounds -- the jig is up. There is no credibility left to the idea that they can just create another $5 trillion or $10 trillion, hand it out to rich morons, who dole some of it out to the top 20% of society, and somehow that emergency measure will correct and solve itself.

So the professionals won't be living it up like they were during the Obama years. In fact, the crash will be worse than any we've seen because there is no higher financial power left to bail out the institutions that became compromised during the current bubble. Earlier neoliberal bubbles only took out a regional bank, hedge fund, sector (savings & loan), at most the big Wall Street investment banks in 2008.

But now the quantitative easing program has compromised the central bank itself, the one that prints the world's reserve currency no less. So that's it -- whereas the central bank could bail out the Wall Street banks last time, there is no central bank of the solar system that can bail out the de facto world's central bank.

On the bright side, though, all of these depopulated professionals will have no choice but to get real jobs and pursue working-class goals rather than whine for the continuation of a professional-class bubble economy, which is no longer do-able. It will be a boon for populism and socialism -- real socialism, not the SJW-ism of today's professional class.

I discussed this issue earlier, in the context of Bernie tanking his campaign by catering to these professional-class strivers with appeals to Nazi-hunting as the justification for socialist economic programs:

The only glimmer of hope is that the upcoming recession will be a Great Depression-level catastrophe, so painful that it forces the libtards to stop masturbating to their Nazi-hunting fantasies, and train their sights squarely on the real-world threats of laissez-faire, oligarchy per se, and inequality, uniting the great majority of the country in that fight to bring back order after decades of teetering neoliberal chaos.

Their fantasies are luxuries that can only be afforded during comfortable times, and so far the current economic bubble has yet to fully burst. If they were working-class, they would have been mired in hard times for awhile now, but they are all professional-class strivers who have benefited massively from Obama's re-inflation of the info-economy bubble.

Once the global central banks are no longer running the printing presses, the venture capitalists who fund their online media outlet will cut them off, and they will have to move back in with their parents in flyover country, bye-bye Brooklyn. Only when they are materially forced to re-join the human race will they be able to pursue a humanizing political project like socialism.

That proved to be timely, as one of these online media sites -- Splinter -- was just shuttered by its investors, who don't have an endless line of free credit at the central bank anymore. Time for their laid-off staff to move back to wherever they came from, and liberate themselves from the hyper-competitive shithole of Brooklyn.

It will be good for their moral fiber, and hopefully for working-class politics -- they'll have to shut their mouths about alienating culturally liberal bullshit, if they want their minimum-wage job to pay $15 instead of $7. There's no way for them to amass a huge movement to compel employers into raising wages, while shitting all over the majority of the country. Before, there was no cost to them for doing so -- now that they're part of the majority themselves, they have no choice but to conform and shut up about matters that are irrelevant to winning higher wages and better working conditions for themselves.

Final word goes to Aimee "The Vest" Terese, who detonated a bunch of the Splinter staff (and related people elsewhere) for their direct role in hamstringing Bernie's campaign by trying to push him into being an extreme leftoid rather than the culturally moderate populist he won so many people over with last time. These are only two remarks among many ("pmc" means professional-managerial class):


  1. She sure did torch them and she wasn't trying to, just discussing them to make an academic point, which probably made it worse.

    She's so obviously the real deal, the genuine radical that they will never be, and without the institutional support and friends to match, to watch these poseurs pile on was infuriating.

    Anyway, she's a woman, and no matter how tough, it's got to be hard for her and I hope she gets all the moral support she can. I wouldn't be surprised if the Blue Check Poseurs take it to the next level and smear her more formally in the near future.

  2. She's an honor-driven prophetess up against the legalistic scribes and Pharisees. I just hope she sees that her fate is not to win them over or subjugate them -- it is to discredit and delegitimize them, while founding an entirely new and different following among the normie masses.

    Not unlike the mission to the Gentiles, only for socialism. Let the hypocritical incestuous elites bicker, backstab, and bootlick until they go extinct as a cultural force.

    I think she's learning how much crossover appeal she has to non-leftoids, and that ought to shore up her sanity and resolve. As a tiny brood of vipers casts her out, so will she be welcomed by the multitude of those who hunger and thirst for righteousness.

  3. "The upcoming recession is going to be far worse than the 2008 financial crisis"

    No. Central banks have learned their lessons from 2008. It would be genuinely bizarre if they were to be repeated. The 2020 recession will resemble that of 2001.

    "This make-work program for the elites is the Shark Tank economy -- strivers competitively begging for funny-money that the investors had gotten for free ultimately from the central bank."

    No; the money wasn't free, since investors had to sell safe assets in order to receive them.

    Does rising income inequality not suggest elite underproduction? If there were too many elites, their wages would fall.

    "culturally moderate populist he won so many people over with last time"

    Mythology. Bernie was never in any sense culturally moderate.

    "None of it was spent in a way that could create well-paying and humane jobs for the bottom 80% of society."

    Wrong. Unemployment is at a fifty-year low. Perhaps you could focus on that?

    "The success of the last / current project of quantitative easing owed to belief that it would be undone over the course of the recovery. "

    No. Monetary policy succeeds only when people expect it to be permanent. Fiscal stimulus succeeds only when people expect it to be temporary.

  4. Central banks learned their lessons from 2008 by amplifying the underlying problems -- genius.

    Money was not free when it is loaned out at 0% interest, and when there's suddenly a $4.5 trillion-dollar buyer who shows up on the demand side for your supply of treasuries that would otherwise be worth a shitload less. Another genius insight.

    Rising inequality shows elite over-production -- a chunk of the old middle moved into the top, and the rest fell into the bottom. Inequality means more people at both extremes, greater variance, dum dum.

    The standard of living for an over-produced elite class would fall in a free market -- hence the trillions of dollars in make-work programs from the central bank and fed gov. Trillions from the bank to financial elites, and their clients. Trillions from fed gov to the military and its clients.

    Bernie was so culturally moderate that he got skewered for it -- not a real Democrat (Independent), better grade from the NRA than Hillary, rejected open borders as a Koch Brothers proposal, opened his 2016 campaign with an ad showing a bunch of white people from rural and small-town America, played to "America" by Simon & Garfunkel.

    QE did not create a single "well-paying and humane job" for the bottom 80% -- regardless of whether unemployment is at a technical low because everybody has multiple shitty starvation jobs. And most unemployed people are not counted because they've dropped out for so long.

    Slaves were fully employed, too. It's standard of living that matters.

    You're too retarded to comment on economics, especially finance. Find some libertardians to eat boogers with.

  5. Right-wing dum dums like you will lose your shirts, too, not just the libtards at Splinter. You're too defiantly clueless and retarded to be doing anything inherently profitable, so your make-work program will see its funding vaporized as well.

    That's what is going to make it so joyous -- it's not just some lame culture war victory, seeing leftoids at an online media outlet get shit-canned. It's the entire population of over-produced elites who are going to discover too late that their ill-gotten wealth and status is vanishing into thin air.

    Smart money has been seeing this for awhile now. It's only the retail suckers like you who they've been fobbing their crap off on. Enjoy holding that bag, genius!

  6. Conservatards are more vulnerable to crashes because their funding sources are more opaque to them. That makes them less able to prepare for bad times. Unless they're defense contractors -- then they know they'll earn more when the GOP enters office, and less when it's the Dems.

    Other than that, your typical professional in a material sector -- say, an engineer (real one, not a programmer) -- is so inflated with hubris simply because he doesn't directly collect a paycheck from the Pentagon or the central bank. He's a rugged individualist rather than a moocher, doing worthwhile hard honest labor rather than pointless make-work, truly productive rather than wasteful.

    Maybe in some hypothetical utopia, that's true. But that's a subjective and aesthetic judgment -- my work ought to be worth more than yours (you leftoid internet journo).

    But back on Planet Earth, his funding comes from the same sources as the libtard make-work recipients. He just doesn't see it because there's a longer and therefore more opaque chain of transmission.

    The journo at Splinter knows that a bunch of venture capitalists pay their bills directly, and that those guys must have connections at the big banks or even the central bank.

    The engineer, however, has a range of clients and customers who are not financial elites themselves. But they are in the top 20% of society -- perhaps the top 1% or 0.1%. That's who engineers work for -- they're not tradesmen who you call up to fix your A/C or build a woodshed in your back yard. So they don't cater to the bottom 80%.

    Whenever the top 20%, 1%, 0.1% suddenly have a lot less money sloshing around their bank accounts, the engineer will immediately discover that he has only half as much demand for his services as before, when his clients were fattened up and in a big-spending mood.

    He erroneously believes his clients exist outside the fake top-down government economy, and yet they're just as dependent on its largesse as are the clients of an online journo.

    When the central bank can no longer print trillions of dollars and ensure that it's accepted as legitimate by credibly promising it's only a temporary emergency measure, the engineer's client base will dry up just as rapidly as that of the journo. Only it's less transparent to him, being further removed from the source of funding.

    These right-wing geniuses should've learned their lesson the last time a financial bubble burst, but their greater distance from the ultimate source of everyone's funding renders them more blind and vulnerable to the Wile E Coyote moment.

  7. What would you consider non make-work, if not engineering?

  8. You're asking about the abstract, but reality is concrete. Hypothetically, could engineering be a profitable / valuable / productive line of work? Of course. But it could also be part of a broader system of make-work for the top 20% fueled by the central bank's printing presses, and therefore unproductive and wasteful.

    Same goes for the informational professions -- journalist / reporter could be worthwhile, or it could be part of make-work for the elites.

    Both of those professions were more productive and valuable during the New Deal, when the central bank and fed gov directed policy toward improving everyone's standard of living, and social harmony. Also, elites were under-produced, if anything.

    Now, elites are over-produced, they've collectively leveraged their greater share of society into hijacking public policy (including central bank policy) toward their own elitist ends, and in a way that is breaking down social harmony through partisan polarization and economic inequality.

    And sure enough, take a look at what the material people were doing during the Great Compression, beginning around the 1910s and ending sometime in the 1970s, and they invented a hell of a lot more than they have since then, which is basically nothing.

    Yes, that includes all the worthless internet-based crap that proved massively UN-profitable during the first dot-com bubble. And it will prove just as worthless when this second tech bubble bursts.

    Remember, the NASDAQ in general and Amazon, Apple, Netflix, etc. in particular were worthless during the W. Bush admin -- that was the material elites in charge, so there was a commodity bubble, and a military bubble. It wasn't until Obama took office that the informational elites hijacked public policy and inflated a massive info-economy bubble.

    We already saw the FANG stocks plummet by like 25-50% last December, so guess how much further they'll plummet when the central bank is out of ammo. It could easily outdo the first tech bubble bursting, wiping out 90% or so of "value".

  9. What will happen to the H1bs?


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