Living in a Neofeudal Bubble

If you listen to conventional economists, everything's rosy: thanks to the expansion of alt-energy like wind and solar, energy is getting cheaper, batteries will power the new global economy, we're getting smarter - just look at the rising number of advanced college degrees, wages are finally growing, inflation is trending down, household balance sheets and corporate profits are strong, debt loads are not an issue yet and GDP is rising.

All this happy news is backed by statistics, of course, but there's one little problem: all the conventional cheerleaders are living in a bubble of like-minded elites who are insulated from the neofeudal realities of life in the real world.

Outside the bubble of wealthy, protected elites that generate the statistics and the "news," the global economy is completely, totally neofeudal - and so is the American economy. What does neofeudal mean? It refers to a two-tiered socio-economic system in which an aristocracy owns the vast majority of the wealth and collects the lion's share of the income, and uses this financial dominance to buy political and narrative dominance.

In a neofeudal arrangement, the machinery of governance protects and enforces elite dominance. Cartels and monopolies have free rein to price-fix and exploit, tax revenues flow freely to cartels, elite organizations such as family trusts get tax breaks, and so on. In other words, "the market" is rigged and the government maintains the status quo.

Toiling away to enrich the aristocratic owners of capital are the serfs and peasants, who own a tiny shred of income-producing capital. Their primary assets - the family home and vehicles - are actually income streams for the wealthy who collect the mortgage and auto-loan interest paid by the serfs.

The core dynamic in neofeudalism is the already-wealthy increase their share of the wealth, and everyone else sees their meager share diminish. The vast majority of financial gains generated by the US economy flow to the top 0.1% of households. The top 1%'s share has risen by 40% while the bottom 50%'s share of the wealth has slipped to 3% - essentially signal noise.

Social mobility is limited to the occasional serf clawing their way into the technocrat class, the top 5% who slavishly serve the interests of the financial aristocracy. This class lives in a self-contained, protected bubble: an echo chamber of privilege, residential enclaves, jetting around the world, and so on: everything's great because we're doing great.

Life is good in the bubble because there's no homeless encampment a block away, there's plenty of money coming in and our wealth - 401Ks, inherited bonds and rental property, university pensions, corporate stock options, and so on--increases smartly, year after year and decade after decade.

That all this wealth expansion is the result of unprecedented central bank intervention is left unsaid. As noted above, the role of the state and central bank is to maintain the status quo of the already-wealthy increasing their share of the national wealth and income, and loading more (very profitable) debt on the serfs.
Outside the technocrats' privileged bubble, wages' share of the economy have been stripmined by the aristocracy for 45 years. Oh dear; could this be why I'm having such trouble finding low-wage reliable "help"?

While wages inch up, costs of shelter, utilities, debt, vehicles, public transport, childcare and other essentials soar. Wages have flatlined (or fallen when measured in purchasing power) while rent has steadily increased, eating away at the serfs' disposable income.

Inside the technocrat class bubble, everything's wunnerful. AI will boost profits (all of which flow to the aristocracy, so that's wunnerful), energy's getting cheaper and more abundant, and so on.

Oh, wait. Alt-energy only looks cheap because all the full lifetime costs have been ignored (i.e. externalized), and these modest additions to our vast hydrocarbon consumption aren't actually replacing hydrocarbons, they're simply adding more energy for us to consume.

In other words, conventional economists and the other technocrats maintain their privileged bubble by clinging to a delusionally disconnected-from-the-real-world mindset. There's always a slew of academic papers or think-tank / corporate reports to bolster the inside-the-bubble confidence that everything's great, because generating positive narratives that leave the neofeudal structure untouched in the primary industry of the technocrat class.

There are no rebuttals, there are only sputtering obfuscations: b-b-but the mission to Mars! Taylor Swift raked in a billion bucks! OnlyFans pulled in $5 billion! Stocks are rallying! Everything's great!

Sure - if your dose of Delusional is high enough. Then you can go back to complaining about air travel delays, finding someone to repair your pool pump and bragging about how well your investments are doing.

by Charles Hugh Smith on September 5, 2023 at oftwominds.com