The times they are a’changing! Maybe it’s just turning 40, but I really do think US politics and society are undergoing a bit of a sea change. Nobody can argue that the past three years have been fun. On the other hand, I think that, so far, this period of transition is infinitely less bruising than the one the country went through in the 1970s and 1980s. In today’s video I try to knit the New Deal and Reagan eras into a single narrative of progress and change. It is punctuated with Joker level chaos of course.
I really do believe that 2020 presents an opportunity to help the country move on to its next cycle of growth and progress. I have no idea who would best represent and shape that change. But I do know that whoever gets elected in November, even if it’s Donald Trump, will have that opportunity. I’d really rather it wasn’t Donald Trump. Today’s video sets out my general attitude to US history and the 2020 election. It’s useful viewing if you want to know my biases before this year of election madness.
A certain kind of commenter has real problems with videos like this one. It compares the trajectory of current Chinese leader Xi Jinping to a mid 19th century French dictator. Some see the idea of historical comparisons as ineffective, or even racist. To those who say it’s ineffective, I am forced to agree. It’s not like what happened to Napoleon III will predict exactly the path that Xi Jinping’s rule will take. But I never claimed it would. This video only talks about the surprising parallels, it makes no claims for the future. History is a treasure trove of events, processes, and situations. None of it will predict exactly what happens, but aspects are often similar. There’s no harm, and certainly no prophecy in drawing out parallels the way that this video does. Some other commenters, both Chinese and Western, claim that it’s ridiculous to compare China to European history. Both of them hold on to the idea that there’s something intrinsically different about the Chinese, and I’m either being racist, or not racist enough by assuming easy parallels with Europeans. I think that’s just balderdash. Chinese people are people too, and despite the scale and age of their country, it moves in similar ways.
Vague similarity to past situations is all I’m claiming here. I’m not claiming to know how Xi Jinping’s rule will end. But I am trying to make the case that Xi Jinping’s assumption of dictatorial power is something that we’ve seen before in modern history. Many in the US are reacting with panic to the idea of a great power backsliding in this way. They are acting as if it’s somehow unprecedented. It’s not. That’s all this video is saying.
With today’s video we go all in on discussing the US stock market. There’s this idea that stock markets are somehow rational, or serious. People who talk about it are always wearing suits, and we put a lot of effort into making all the details of interest rates, portfolio management, and valuations seem boring. The stock market is none of these things. In fact it’s nuts. By going through the history of the “Trump Bump”, I attempt to draw the curtain back a bit.
Unfortunately, watching the video, I think I screwed something up. It’s not that the story I put forward is wrong, it’s just that I left too much out. The video falls into the “Presidents impact everything” school of commentary. I hate that school. The differing views market makers took of Trump and Obama are tremendously important to this particular economic story, but that doesn’t mean that presidents are actually all that powerful. I really don’t want to create that impression, and I apologize if I did so with this video.
This video does a good job of laying out how ridiculous the “Democracy is Dying!!!” story is. But what it doesn’t do is lay out why the story gets so much play. The sad fact is that it’s useful to powerful people in the United States. Once again, it all comes back to the US military industrial complex. The wise men of the Pentagon have realized that “Terrorism” is losing its power as a motivating factor. Despite the best efforts of Trump & Co. it’s obvious that general white loser angst has had a much higher body count in the US over the past decade than “Radical Islamic Terrorism”. So we need something else to be scared of to justify our absurd military budgets. That’s why this narrative gets so much play.
The idea is that if “Democracy is Dying”, the world really is “more dangerous than it ever has been” as the Pentagon keeps telling us. I may do a video on this in the coming weeks… I’d be interested to know how much relevance this story has beyond the national security nerd twitter bubbles I frequent. In those circles this “Democracy is Dying” story has become the conventional wisdom. Is that the sense you get where you are at as well? Let me know in the comments.
Budgets are boring right? Not really. They are certainly complex, and passing them is complicated, as Washington, DC’s seemingly perpetual shut-down dance shows. But the question of paying for government is the most important one imaginable. Time and again in history we see great empires brought down by the simple question of “How do we pay for this?”
In the 1500s the Spanish Empire encircled the world, and controlled something like half of Europe, if not more. Their American territories brought a constant stream of precious metals. They were brought down mostly by the fact that they didn’t understand inflation, and defaulted on their debt repeatedly. In the 1920s the British Empire reached it’s largest extent. The “Sun Never Set” on the British Empire. 40 years later it was gone. Because they couldn’t pay for it. The holders of British debt in the United States got to dictate British foreign policy in a few crucial instances.
Remember the too big to fail banks? They are still a problem. I don’t know when the next crisis is coming, but it’s inevitable. Too many of the problems at the root of the 2008 crisis have never been solved. This video lays out how Dodd Frank made everything worse. But it has created a situation that won’t be improved by repeal. It’s one of those catch-22 things basically.
I love it when the environment I’m in inspires a video. San Francisco is an interesting place. There’s a ton of money everywhere, and a ton of poverty too. I’m currently in the midst of a tour of the West Coast, staying anywhere there is a free couch, and San Francisco has probably been the most inspiring city. That’s not necessarily a good thing. Market Street, where the bulk of this video is set, has a ton of history (For California). The street has seen multiple cycles of boom and bust since the mid 19th century. The current vibe is definitely boom.
A few blocks away the Salesforce Tower is currently going up. It will be the tallest building in San Francisco and the second tallest west of the Mississippi. It’s hard not to think of the “edifice complex”. Nothing signals a coming downturn like a massive new skyscraper. NYC’s Empire State and Chrysler Buildings went up during the beginning of the great depression. The buildings that ended US dominance in the Skyscraper game, Malaysia’s Petronas Towers, were finished in 1996, one year before the Asian Financial Crisis. The Burj Khalifa, the biggest of them all (so far) signaled a financial crisis for Dubai.
The Salesforce Tower ends the video, but it definitely cast the mindset for the whole thing. That and Wells Fargo’s hilariously bloated presence in downtown SF put me in mind of financial crises past and future. I don’t know when the crisis will hit. Who knows, we could be at the beginning of a great boom rather than its end. But if our banks continue to be structured the way they are, we’re going to be in trouble eventually regardless. Hugs!
This video convinced me to put together a new playlist “MFF on the Markets“. The channel tends to be a little more focused on history and geopolitics, but I’ve been a stockbroker and a corporate lawyer in my day, so I’ve got some stuff to contribute on the topics of law and markets when I can stomach it. I was surprised that the playlist came to 34 videos. Check ’em out!