Given Enough Time, Bad Policies Will Eventually Ruin Any Advantage

Recently I spent a month in Buenos Aires. I went there to study the culture and the economy of a formerly prosperous land, filled with kind well-educated people.

One key lesson was this: Given enough time, bad policies will eventually ruin any advantage.

While not as bad off as it was in 2002, when the masses took to the streets banging pots and pans in protest of their nations ruined economy, the city of Buenos Aires is still clearly depressed. As are most of its people.

More than that, all hope has been lost. Every time a new politician is elected, things are promised to get better, but they don't. Argentina's current woes are the result of far too many successive political regimes that made terrible decisions. It's a clear as simple as this: Bad policies lead to bad outcomes.

As we learned in our interview with Daron Acemoglu on Why Nations Fail, what matters most for widespread prosperity is that the political and economic institutions be fair and inclusive. From the podcast:

It all depends on incentives and opportunities. If people have opportunities to become rich, to open businesses, be innovative, do things that are going to further their interests and at the same time the nation's GDP (Gross Domestic Product) and they have incentives to do so, that's going to lay the foundations of economic prosperity.
It sounds extremely simple but the thing is that most nations don't provide those sorts of opportunities and incentives to their citizens and therein lies the big divide. How do we summarize those opportunities and incentives?
It's the institutions, the rules, formal and informal regulations, and organization of society that determines what sort of opportunities are available to different people, to people from different walks of life, and what sorts of incentives they function under.

In Argentina, after having been economically disappointed so many times, any sense of economic vitality and entrepreneurial spirit has long since disappeared.

Old buildings there display a grandness in the quality of their architecture. Newer construction is clearly blocky, rushed, and low-grade.

“Basuras" are everywhere. They're the street-side dumpsters located all throughout the city. Sometimes I would notice people rummaging in them as I walked about during the day. But after dark, formerly middle-class people can be seen in the basuras, usually from the knees down with their feet waving in the air, as they rummaged through looking for anything of value to glean:

How did Argentina get here? How did a nation -- once the most prosperous in the world on a per capita basis -- stumble to a place of forlorn hope and such diminished prosperity that economists sometimes joke that there are first world economies, developing economies, and Argentina?

The answer is: Poor policies.

A long succession of flawed governance, coupled to some crucial mistakes in apportioning the spoils of the land to too-few wealthy families at the outset, has seved to erode the prospects for nearly all Argentinians.

Now rapid inflation is again back in the news. Having seen this movie before (and not that long ago, either) everyone dreads what's coming next.

Argentina is instructive for us living in the rest of the world, because it is a real-time case study in how bad polices lead to bad outcomes. And in applying this same logic to central banks, we can conclude: Bad models lead to terrible outcomes.

So we should all very much care when our institutions, both political and economic, are becoming less inclusive and more extractive (and/or oppressive). Because if we continue down that road far enough, eventually the majority of us will find ourselves similarly waiting for night to fall as we slink off to tip headfirst into a basura.

On Delusions & Rackets

The longer this massive delusion of the viability of perpetual economic growth goes on, the more entrenched I find myself in a foxhole half-filled with dread. And I really don't like it.

I'm ready for meaningful change. I want to be able to once again focus on the positive. I want to find ideas and people in leadership positions in whom I can believe. I'm sure you do as well.

I find myself thinking: Let's just rip the Band-Aid off already! Let's count the losses up now, apportion them fairly, and move on having learned some painful but useful lessons about living within one's means as a society.

But that's just fanciful dreaming. The powers that be are doing (and will continue to do) everything in their considerable power to prevent this from happening.

And so the list of things in which I have lost faith in in the US is large and growing:

  • The rule of law. Laid bare as a complete joke by Eric Holder under Obama, and now under Sessions/Trump.
  • Financial “markets." These are now the playthings of machines that apparently cannot produce a single losing day for their owners as if they were legitimately money-making machines. But pay no attention to the fact that central banks are pouring $200 billion a month into these same “markets." Further, try to ignore that it is the taxpayers on the hook for the “assets" the central banks are accumulating to legitimize the farce and remember to bust out your best 'surprised face' when the Wall Street machine operators get to keep their 'winnings' while taxpayers have to foot the eventual bill.
  • Politicians. Always a suspect crowd, their complete fawning subservience to banks, bankers and corporate money in general has led to an even more profound, almost final collapse in public confidence in them.
  • Sick care. Misnamed 'healthcare' this racket is so obviously a cesspool of corrupt, price gouging activities foisted upon desperate captive hostages in the throes of a medical emergency that it beggars belief that not one proposal out of DC has yet included the simple application of existing price-gouging laws that already protect you from hikes in the price of plywood during an approaching hurricane.
  • Foreign policy. Sure this is a complex sea of ever-changing interests and alliances but I am going to throw up if I hear one more State Department person talk about “democracy" in whatever country we're bombing or secretly funneling arms into while saying nothing at all of Saudi Arabia's grotesque violations of every principle that the State Department swears we hold dear. Bombing and creating chaos everywhere is a really bad policy, yet it's somehow gotten entrenched and I am beyond tired of it.
  • Environmental/ecological policy. Anybody who thinks the US already went through and achieved something with the environmental movement in the 1970's either hasn't read the papers carefully lately, been outside in enough places, or both. 500,000 chemicals, many of them far more toxic than ones previously banned, have been released and done their damage. Insects are now gone from thousands of square miles subjected to neotnicotinoid pesticides. Obama's administration punted as long as possible and then when the bad data was inescapable opted for “more study." Trump will be worse. There's another Silent Spring upon us. Shame is too light a word.
  • Main Stream “News." Could it get any worse for the MSM? Apparently it can. Caught firmly between the proverbial rock and a hard place, those being declining viewership and public hostility towards their lies, the MSM response has been to double down and manufacture clearly fake news to serve a truly awful set of craven purposes. At a time when we desperately need clear analysis and proper context, the MSM has stampeded off in a different direction.

I could keep going, but why bother? This list of ridiculous awfulness will serve as a rocket fuel for the speed and the depth of the coming big reset when it finally arrives.

Don't worry, there will be good news on the other end of the correction. But only once we finally get that Band-Aid pulled off. We should already be imagining that next world, and everything that we want to find in it. Which is why we need to understand how to adopt better models than the ones we're currently navigating by.

Bad Models = Terrible Outcomes

The main predicament at the core of everything is that economics is the primary way we organize ourselves. If your economic models are seriously flawed, meaning they will eventually fail, then your very society is at risk, as Argentina's neighbor Venezuela is currently demonstrating. Money is a critical part of our social glue, it is a central part of the narrative that we live by, and this is why we find it so deeply disturbing when that narrative is obviously beginning to fall apart.

That feeling in the air right now? The one making folks angry, hostile, anxious, and scared?

That's just the herd appropriately sensing an approaching storm.

The big issue here is that the central banks have seriously flawed models that guarantee even worse outcomes for everyone. This is no different than, say, if NASA were calculating a trip to Mars and used miles instead of kilometers for part of the atmospheric approach calculations and burned up a $125 million orbiter -- as indeed happened in 1999.

Whether or not you have the right numbers, the wrong model will always give you a bad outcome.

In Part 2: A Better Model For Predicting What Happens Next, we detail how today's bad models will literally destroy financial and economic markets for generations to come when that pesky thing called "reality" finally intervenes.

Debts do matter, because debts are a claim on future production. As we have repeated over the years, GDP growth is now way below past periods of GDP growth -- leading us to conclude that future resource constraints will not only prevent the economy from ever again returning to its prior rates of rapid expansion, but force it to face the prospect of shrinking instead.

Click here to read the report (free executive summary, enrollment required for full access)

Would Glenn make a better bounty hunter or a Jedi? You'll have to find out in a new episode of the Beltway Banthas Podcast, where Glenn goes deep on Star Wars with host Stephen Kent. In this 45 minute discussion, Stephen and Glenn explore the political themes of the Star Wars franchise, Darth Vader's redemption from Return of the Jedi, Glenn's earliest memories of seeing the films and even debate elements of the latest Star Wars films.

If you enjoy the pop culture and nerdy discussions that Glenn, Pat and Stu get into on the radio show, you'll love this! After you're through, you can also check out Stu Burguiere's appearance on Beltway Banthas to talk Star Wars. You can find that here.


It's never too early to start your Christmas, Hanukah, or Kwanzaa shopping. Or even birthday gift shopping. Especially if that special someone in your life is a Democrat. Because at last count, pretty much all the Democrats are now running for president. And that means there has never been a wider selection of official candidate merchandise to choose from. Whether you're into environmentalism, feminism, classism, socialism, or just plain love, there is a smorgasbord of classy items that you and yours will treasure forever... or at least until the next presidential election.

We have browsed each of the candidates' online stores, so you don't have to (it only took us three months). We have curated only the finest items from each of the Democrats running for president of the United States of America. Without further ado, here is your handy progressive gift guide – or maybe your what-not-to-gift guide.

First, the bargain basement options. Hurry! Time is running out to grab your Beto bandana, or your Delaney pack of golf balls, because at this point Stu has as much of a chance as these guys of getting the nomination.

Tom Steyer, for example – is he still in the race?


https://shop.tomsteyer.com/collections/frontpage/products/tom-2020-pattern-tee


There's way too much Tom here. That shirt's got more Toms than a Caucasian dentists' convention.

For the slightly more moderate Democrat in your life, perhaps they'd like to join the "Yang Gang"…

https://shop.yang2020.com/collections/bumper-stickers/products/yanggang-decal


Andrew Yang is a lock for Math Club president…


https://shop.yang2020.com/collections/apparel/products/math-hat


But for actual president? Well, I wouldn't make plans for how you're going to spend your $1,000-per-month Yang allowance just yet.

If you happen to be shopping for your dog, may I suggest this lovely "Dogs for Delaney" dog collar…


https://store.johndelaney.com/products/dogs-for-delaney-collar


John Delaney's definitely going to secure the canine vote with this kind of outreach. As for any human votes, that's another question entirely.

How 'bout this tastefully understated "Natural Canvas" Michael Bennet tote to remind you he's also still here?...


https://store.michaelbennet.com/michael-bennet-for-america-natural-canvas-tote/


Then again, it's a tote. So, it'll end up on the floor of your closet and you won't have it with you until that one random moment when you're out somewhere and you really need a tote bag. Just like Democrats will really wish they had a moderate when we're in the middle of the socialist nightmare of their creation.

Captain Planet himself, Jay Inslee recently dropped out of the race, but don't let that stop you from picking up what may be the greatest single item sold by anyone in this race…


https://store.jayinslee.com/elvis-the-elves-the-mystery-of-the-melting-snow-by-jay-inslee/


A children's book called Elvis & the Elves: the Mystery of the Melting Snow. Written and illustrated by Governor Jay Inslee. Talk about a whodunnit – how could that snow possibly be melting? Spoiler alert: it's because of evil, white, patriarchal capitalism. And Donald Trump.

Then there's the candidate who thinks you're a moron that can't pronounce his last name: Steve Bullock...


https://shop.stevebullock.com/collections/apparel/products/emoji-t-shirt


Get it? Bull. Lock. Oh, so that's how you say the name that sounds exactly how it's spelled.

There's another candidate who also thinks you need help pronouncing his last name…


https://store.peteforamerica.com/collections/apparel/products/boot-edge-edge-t-shirt


And he is definitely right about that. So, thank you, Pete "Boot Edge Edge." That helps.

Just outside the bargain bin section, but just barely, are candidates like Julian Castro and his "El Presidente" t-shirt…


https://store.julianforthefuture.com/julian-castro-loteria-card-white-tee/


When your last name's Castro, do you really want to go with a weird drawing of yourself as if you're a classic Latin American dictator on a postage stamp?

If you prefer a little "dark psychic forces" battling in your candidates, you'll love Marianne Williamson's "Turn Love Into a Political Force" rally sign…


https://store.marianne2020.com/collections/signs/products/love-rally-sign


"Turn Love Into a Political Force" would be an even better title for a Marianne Williamson album of 80s cover songs. And if you think I'm joking, then you haven't heard Bernie Sanders' classic 1987 folk album, We Shall Overcome. That's not a joke. Well, it is a joke, but it's also a very real thing.

Now, just a quick pause to consider the peculiar baby-wear that way too many candidates are selling…

…including Elizabeth Warren's trans-pride flag onesie. Let me get this straight – we can't force any gender on a child, because that's just cruel. But we can force a political advertisement on a baby? How do we know that baby is actually a Biden or Warren fan? The child may not even be a Democrat or a Socialist at all. That baby might self-identify as a Libertarian, or Republican, or even worse – a moderate Democrat.

Now to the premium items from the premium candidates. Elizabeth Warren – the candidate with the most honesty in her advertising…


https://shop.elizabethwarren.com/collections/apparel/products/impolite-arrogant-women-make-history-unisex-t-shirt

-AND-

https://shop.elizabethwarren.com/collections/drinkware/products/strong-american-unions-mug


Warren's merchandise reflects the woman herself – cold and humorless (watch her "This isn't funny" clip from the last debate here at the 4:27 mark). I'm sure she's really fun once you get to know her. Then again, maybe not.

Speaking of serious women, Kamala Harris wants to be president very badly for you, the people, as you can tell from her "For the People" poster…


https://store.kamalaharris.org/poster-for-the-people/


At $29.99 though, she's sure not charging "people's" prices. Of course, she might be having to pay royalties to a certain someone for riffing on their poster. Just saying.

For the race's number one socialist, there's a whole lot of capitalism going on in Bernie Sanders' campaign. He sells so many delightful items that it's hard to choose. But we did anyway. The most random item is this hundred-dollar, black, "Art of a Political Revolution – Artists for Bernie Sanders Coaches Jacket"…


https://store.berniesanders.com/collections/apparel/products/artists-for-bernie-coaches-jacket


Coaches across the land will be clamoring for this one. You know, since coaches are such a strong Bernie-socialist demographic.

If that's a little over your budget you might consider a "Feel the Bern" fanny pack, to help store all those government freebies you'll get from Bernie…


https://store.berniesanders.com/collections/apparel/products/feel-the-bern-fanny-pack


This is the only context in which you'll ever want to hear "feel the burn" and "fanny" in the same sentence.

And finally, from front-runner Joe Biden, we have this fine "Women's Fitted Biden Polo." Which is just about the best polo description ever…


https://store.joebiden.com/collections/apparel/products/biden-polo-womens-fit


It promises the kind of snug approach that Biden loves to provide women. Even when they don't ask.

This was one of the first homesteads in the area in the 1880's and was just begging to be brought back to its original glory — with a touch of modern. When we first purchased the property, it was full of old stuff without any running water, central heat or AC, so needless to say, we had a huge project ahead of us. It took some vision and a whole lot of trust, but the mess we started with seven years ago is now a place we hope the original owners would be proud of.

To restore something like this is really does take a village. It doesn't take much money to make it cozy inside, if like me you are willing to take time and gather things here and there from thrift shops and little antique shops in the middle of nowhere.

But finding the right craftsman is a different story.

Matt Jensen and his assistant Rob did this entire job from sketches I made. Because he built this in his off hours it took just over a year, but so worth the wait. It wasn't easy as it was 18"out of square. He had to build around that as the entire thing we felt would collapse. Matt just reinforced the structure and we love its imperfections.

Here are a few pictures of the process and the transformation from where we started to where we are now:

​How it was

It doesn't look like much yet, but just you wait and see!

By request a photo tour of the restored cabin. I start doing the interior design in earnest tomorrow after the show, but all of the construction guys are now done. So I mopped the floors, washed the sheets, some friends helped by washing the windows. And now the unofficial / official tour.

The Property

The views are absolutely stunning and completely peaceful.