Markets – Macro – Technicals

The Ungovernable Country

America is drowning in political bullshit and drama and it’s tearing the country apart, indeed it’s rendering the country ungovernable, serving to transfer the country’s assets from the many to the few. Don’t feign surprise now, it’s been a long time coming. And don’t cry outrage over Donald Trump, he’s merely the messenger riding the wave for his own purposes.

Look at what our political system has devolved into: Constant drama to the point where either most people tune out completely because they can’t take it any longer or they get so enraged they just scream at each other. Substance on anything? Forget it. And if substance makes it to the surface it gets quickly drowned out by the next outrage bomb. If we talked substance we’d actually have to confront the structural problems our country is facing. And they are enormous. And that’s the purpose of the design: Distraction.

Indeed folks have become so divergent in their political views that they can’t even agree on a common reality. And the internet in particular has become such a cesspool of hate that it will depress most thoughtful and reasonable people. Philosophy is dead, long live the circus barkers.

Case in point: I watched Donald Trump’s recent press conference with Angela Merkel of Germany on youtube and I noticed thousands of comments flying by in the comment window. Thousands upon thousands.

I ran a few screenshots for a few seconds and the results are eye opening. I did not edit anything and I did not exclude any screenshots on purpose this is exactly what came across (and I stopped after a few seconds). I could’ve gone on for the entire news conference and filled pages and pages with this stuff. You get the picture:

There. Humanity. Try building bridges with that. Impossible. These people will never agree on anything. More likely you can build walls with that hate. Oh the irony.

And this is the political climate with unemployment low and markets at all time highs? I shudder to think what the next recession will bring.

What’s driving all this? A complex potpourri of factors and I can only hint at them here, but here are a few to ponder:

Firstly the great pool of discontent seeded by decades of an ever widening wealth inequality no matter which party is supposedly in charge:

The reality is the system is only working for the few and not the many. And people know it. Many Americans may be misinformed about many things, but they are not stupid. And this skewed wealth distribution along with changing demographics, job trends, technology, etc. is creating angst, and hence the election of Donald Trump is very explainable. Many people feel legitimately shafted by a system that has not produced results for them. And for many he has presented a voice to bring about change, whether that is founded in fact or not.

But the angst is real and this angst can be exploited on an emotional level.

Which brings me to the second point: Fear sells, emotions sell, facts do not. Hence those media outlets that focus on emotion based programming tend to have better ratings than those that do not. And ratings is what it’s all about for many. And political agenda may be another. But at its core media is a business and one that needs to sell ad space. If you can craft a narrative and a story line that feeds into existing perceptions and biases these narratives can override any contrary facts and keep people engaged on an emotional level, especially if you can hype things up to an existential threat level. Every demagogue in history worth his salt has been able to take advantage of this fact.

And indeed Ted Koppel for example made this very point with Sean Hannity in a recent interview, ideology over facts:

What do you think advertising is based on? Fact sharing by outlining the nutritional qualities of cereal and candy? Please. It’s lifestyle crafting emotion evoking mini propaganda enticed to get consumers to buy crap that’s either overpriced or not good for them or both. You don’t really need a golden Rolex watch, but man it would make you look oh so sophisticated and the envy of all your friends. Right? Right. It’s an emotional narrative, not a fact based, practical one.

But it works! Science has already proven that people are easily manipulated to ignore facts. Here’s an interesting article on the subject, dig deep if you like: Why facts don’t change our minds.

Hence discussions in politics or religion rarely result in a change in opinions, perception or orientation. They make for good entertainment and really can get the emotions going. Anybody that has seen any political thread or comments on the internet knows what I’m talking about.

Which brings me to the third point: Who benefits from keeping emotions high? The same people who stay in power all the time. After all the system works for them.

Your really think the recent election changed things? The headlines will tell you they did. Donald Trump is the new president and he looks to have brought change. But if you look closer under the hood there’s actually been virtually no change.

Arnold Schwarzenegger highlighted this in his clip on gerrymandering pointing out that out 387 members of the House of Representatives only 8 lost their seats. 8.

The same DNA that’s been running the show is still running the show.

Take the recent health care disaster as an example. You really think Republicans are this incompetent? You really believe that they complained about Obamacare for 7 years then managed to gain control of both Houses of Congress and the presidency and then couldn’t pass a new healthcare law? Really? Please. Donald Trump was golfing more than he spent time on health care. It was never a priority. It was a check box to keep up appearances. It makes for good drama. And as long there is drama people’s focus will be on the drama and not the results.

In context then is it really a surprise that still nothing gets done? People are easily distracted by drama because policy detail is not the focus of their day. Clearly it’s not:

Americans are busy with work and families, entertainment, devices, social media, games, etc. They are not focused on policy, on details. At least most of them aren’t and that’s what the nomenclature counts on. It keeps them in power.

Hence approval ratings are less important than one thinks. After all Donald Trump was elected with only 25% of the American public voting for him as I outlined in America’s Dirty Little Secret.

So here we are. The political climate is toxic. People can’t agree on anything and our political structure is doing what it has done for the past 30 years: Keep up appearances and wealth inequality keeps widening as the structural issues remain unaddressed.

And don’t expect any change. Here’s the CBO’s latest outlook on the future of things:

So voters get the same they have always gotten: Garbage in and garbage out.

But, as George Carlin once observed, maybe it’s not the politicians that suck:

“If you have selfish ignorant citizens, then you’ll have selfish ignorant leaders”.

Well, whaddya got?

So when you see political drama in the news, don’t think it’s an accident. It serves a purpose.

And this is true of both parties.

Don’t believe me? When is the last time there’s been substantive structural reform on anything that actually produced a long term sustainable, structural improvement?

If both political parties can’t produce any such improvements they reveal the current reality: Without consensus and an ever widening political divide the country is ungovernable and is failing its citizens.

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3 Responses »

  1. Northman…an absolutely eloquent and crystal clear analysis of this country’s present condition. You were in the zone and tapping into the depth’s when writing this…I felt like I was reading an incredible movie script and every scene unfolded with your comments. Excellent Work ! Thank You !!

  2. Thanks for the insightful review of where things now stand. It’s all very true. Depressingly so. I wonder — in idle moments of speculation — of what would have happened if Bernie Sanders had not been blocked from the Democratic nomination. He likely would have won the election but then what? Republicans would still control both houses of Congress. So his social democratic agenda would have gone nowhere. It’s clear that there has to be some epochal event to mobilize those parts of the population that are not looking backwards to a US that never quite was, but towards a future that until recently I believed all rich industrial societies were moving. Before Trump, before Brexit, before Marine Le Pen, and all the rest. But then again I may be as totally wrong about the future as I have been about the past. What the world really needs is an alien invasion a la the film Arriival.

  3. Thank you for the post!! Good read!!

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