Stocks barely moved.
Used car prices dropped last month by the biggest amount since 2008.
Homeownership hit a half-century low. Sears may no longer be a “going concern.”
And discount footwear retailer Payless is preparing for bankruptcy.
Deaths of DespairAlso in the news yesterday was a further report from Princeton economists Anne Case and Angus Deaton who first sounded the alarm about the shocking increase in death rates among middle-aged white men.
According to the latest figures, the death rate for a white man between 45 and 54 years old without a college degree is rising faster than any other demographic group.
And the death rates for black and Latino men the same age continue to decline.
Forget terrorism and Mexican murderers; a middle-aged white man is much more likely to kill himself than to die at the hands of foreigners.
“Deaths of despair” – from alcohol, drugs, and suicide – have more than doubled in the last 20 years. The mortality rate has risen to over 900 per 100,000.
At least one county in West Virginia has been so overwhelmed by these deaths that the funeral homes haven’t been able to keep up.
Swamp MonstersIn our last visit to our father’s hometown – Donora, Pennsylvania… a steel town that peaked out in the 1960s – we were shocked.
Not that so many had killed themselves, but that so many were still alive.
We’d hit the bottle hard, too, if we had to live there. Empty buildings. Derelict houses. It might as well have been West Baltimore.
Economists, do-gooders, and social activists argue about the causes. Not enough spent on education and job training, says one. Globalization, charges another. No, it’s the unequal distribution of income, announces a third.
But we think we know the real cause: the swamp monsters.
They are coming to get white men. In 1971, the feds changed the money system. Since then, money has been almost unlimited. But the working-class man still sells his time by the hour. And time is limited.
The swamp critters get their money from the credit industry… Wall Street… and the feds.
Currently, it is nearly free to them. They use it to buy back shares, peddle influence, suborn the voters… and mostly to shift real wealth from Main Street to themselves.
Over the last 35 years, their stocks have gone up three times faster than the economy that supports them.
For instance, Treasury Secretary Steve Mnuchin and his hedge fund pal Eddie Lampert (both former Goldmanites) made millions running Sears into the ground – using cheap money from the feds to finance their schemes.
But the poor people who shopped at Sears and Kmart or worked for those retailers just got poorer and more depressed. The shelves grew spare and the company sank close to bankruptcy.
This wasn’t the Mexicans’ fault. Or the Chinese. It was our fault.
The slippery trail, left by the swamp monsters, leads from Donora, Pennsylvania, via Wall Street, to the Federal Reserve headquarters in Washington, D.C.
But it is so obscured by fake news, it’s hard to follow.
Mushy FactsWe’ve been talking about fake news… and trying to understand what it is and what role it plays in today’s world.
As we noted two days ago, people had no “public” information at all for hundreds of thousands of years.
It is only since the advent of cheap newsprint, in the 19th century, that it exists. And we still don’t know what to make of it.
The newspapers tell the average man that he is a victim of “unfair trade,” for example. What is he to think?
He imagines that he has been a chump. It makes him mad and eager to get even.
Or they tell him that America’s central bank is giving Wall Street “free money” to stimulate growth.
He imagines that an economy can be directed and improved. And that the Ph.D.s know how to do it.
There is no real point in refuting these facts – with evidence, statistics, and logic — because they exist in a different space.
Told that your village is under threat of an imminent attack, you might venture out… scout out the surrounding country… and report back:
“No, it isn’t.”
That kind of fact can be verified or disproven. It is a real fact.
But when told that the country is in danger of “terrorism,” how can it be shown to be true or false?
Who are these terrorists? You don’t know.
Where are they? You don’t know that, either.
The further you get – in time, space, and abstraction – from something that is here, now, and real, the harder it is to tell whether there is any truth to it.
Even the truest and most indisputable category of public facts are mushy.
Infinitely ComplexYou say World War II began when Hitler invaded Poland on September 1, 1939. Then what about the attack on Jablunkov on August 25?
What about the invasion of Albania by the Italians on April 7? What about the German occupation of Czechoslovakia in March?
But wait… Hitler didn’t invade Poland anyway. He was in Berlin the whole time.
So to make it a true “fact,” you’d have to say: “Germany invaded Poland.”
But that wasn’t correct, either.
Germany is a country. The country didn’t move. And probably, if you had asked the Germans themselves, most didn’t want any part of it.
You could be more precise and say “the Wehrmacht invaded,” but it surely wasn’t all the Wehrmacht, either. Some parts of it invaded. But surely one soldier, crossing the border, would not have begun the war.
Then two? Three? How many had to cross into Poland before the war began?
We presume the Wehrmacht, Hitler, and Germany all acted with a single mind… as a single actor… But is that true?
And did they really “invade” Poland? Not according to Hitler. He was merely trying to protect “German interests.” There were many ethnic Germans in Poland who didn’t consider it an invasion at all, but a liberation.
The city-state of Danzig, for example, had a majority German population.
Besides, 17 days later, the Soviet Union invaded Poland, too. Perhaps Germany really was just trying to protect its civilians in Poland? So, maybe the war really began when the Soviet Union invaded?
You get the point.
Real history is infinitely complex… infinitely detailed and infinitely nuanced.
You can’t possibly know what happened. (You would need the mind of God.) So you instead come up with a narrative that you can handle.
Failure of Capitalism?Since this story is necessarily a simplification, an abbreviation, and a bowdlerized version of what really happened, it is also false.
It is not what happened.
What really happened was far more complicated – with thousands of missed details, any one of which may be far more important and meaningful than the ones you chose to look at.
What is true of history is true, too, of contemporary events.
When President Nixon asked Chinese leader Deng Xiaoping what he thought was the effect of the French Revolution, Deng replied: “It is too soon to know.”
(There are some accounts claiming that Deng was referring to the communist revolution in China…)
Historians claim it is impossible to get a grip on history until after at least a quarter-century has passed. It takes that long before the dust settles and you can see “what it meant.”
But as you move away from events, the confusions and contradictions are harder and harder to see. Then you can develop a narrative that is comfortingly flattering and satisfactorily false.
So, give it another 25 years… then some historian who never saw a swamp monster in his life can tell us what caused these “deaths of despair.”
Unable to follow the fake-money system – even after it has crashed down around him – he will blame them on the “failure of capitalism.”
But for now, continue reading to see today’s Investing Insight from our friend Chris Mayer.