High Interest Rates: The Cure to Financial Vampirism Everyone Fears

Yes, really

Welcome back, and thanks for reading! Today’s article is a joint one I did with AJR Klopp, a former lawyer, trader, and portfolio manager who is also the author of The Toll of Fortune: An Indo-European Origin Saga. He deserves most of the credit for this article, and if you haven’t yet listened to my podcasts with him on The Indo-Europeans and Financial Vampirism, please do so! If you find this article valuable, it would be hugely helpful if you could like it by tapping the heart at the top of the page to like the article; that’s how the Substack algorithm knows to promote it. Thanks again!

The Financialism Problem

Many years ago, there was an article in The Atlantic about the privatization of Social Security.¹ This was during the height of Bush II’s reign, during which such free-market absolutist ideas were in vogue, and The Atlantic’s jeremiad was sounding the alarm. If Social Security were “privatized,” then no one would be able to gainsay the stock market ever again, it claimed In the mind of fin de siècle liberal commentators, politicians would be forced to refrain from censuring even the most sanguine of market antics so as not to rock the Social Security boat—after all who would want to get blamed for crashing the nation’s retirement savings?

They feared an army of cheerleaders, plungers,² and boosters would emerge from their anthills under Wall Street and Capitol Hill, throwing forth a chorus extolling every advantage of equity investing while turning a blind eye to scams and hustles.

Thank God that never came to pass…

All elite institutions have now adopted an attitude of approbatory bias towards any aspect of our financially saturated economic system. Take Elizabeth Warren. For all her lip service about fighting Wall Street (and the Democratic majorities during Biden’s reign), she took nary a single action to reduce the power of financial institutions. Hell, Congress still hasn’t passed an insider trading ban—something that should be a sine qua non of legislative accountability.

Thus, we’ve arrived at the exact point of political paralysis that The Atlantic feared without firing a single shot at Social Security. Worse still, the current docility towards the purveyors of financialization has bipartisan support—if only latently.

While no sitting member of Congress will challenge the constant crescendo of (nominal) positive market returns, there’s an even more fundamental deal-with-the-devil that no member of the ruling class will condemn. It’s the one thing that unites Nancy Pelosi and Donald Trump: interest rates must always be low.

Now, we know what you’re thinking: “Low interest rates are a good thing; they help borrowers and businesses, and thus bring economic growth.” Yet if there’s any one economic factor that has torpedoed America’s fortunes, it’s the persistence of the low interest rates that not only followed the Credit Crisis, but ultimately trace their origin to Federal Reserve machinations that have been ongoing since the mid-90s.

That rate environment is a cancer on every institution (even cultural ones) that has metastasized into a malaise crushing our productivity, national interests, and technological progress. If there is one treatment for what ails us, it is this: interest rates must go up.

Listen to the audio version of this article here:

[AUDIO] High Interest Rates: The Cure to Financial Vampirism Everyone Fears

How High Rates Help Correct Financialism

Even if we dismiss the barrage of howls from the self-interested, we’ll still hear the “average” person squeal: “What about my mortgage payments? What about my home value? What about my investments in the stock market? What about my credit card?”

These are valid arguments, and yet the arguments we will elaborate on are even stronger. These objections won’t be universal either. There will be many readers who might be ambivalent. They have no mortgage, credit card, or Robinhood account—they’ve been sidelined by the 21^st-century economy. These readers will be even more inclined to read what we’re about to write, and even more benefited by the economic change that will come from reversing decades of easy money policy

Money and Indebtedness, From Gold to Fiat

Money and credit are both manifestations of the same Platonic form: indebtedness. While debt obligations appear to have existed since the Mesolithic Period, their commoditization has developed alongside civilization since lending money at interest was seen as the flip side of generating returns from crop yields in ancient Sumer.³

The Gold Era

More recently, we Americans have been debating interest rates and their “appropriate” levels since the early Republic. In fact, it became the main issue in American politics between 1870 and 1913 (the election of 1896 was devoted almost entirely to this issue).⁴

Back then, it wasn’t interest rates per se that were the basis of the fight, as most consumers had no credit access other than promissory notes between friends, family, and perhaps some local, small merchants.

Rather, in the late 19^th century, it was the money supply in the form of gold and silver that served as the basis of the fight.⁵ More gold and silver (from the rushes of South Africa, Alaska, California, and Nevada) meant more money circulating in the system, which meant lower interest rates that the market (i.e., banks) could charge.

Nixon, Fiat, and Federal Reserve Primacy

The situation exploded again when Nixon unmoored the dollar from the price of gold in 1973, and our dollar finally became a fiat currency.⁶ The value of the now-fiat dollar now undulated with the vicissitudes of the global markets, but being backed by the taxation power of the biggest economy and secured by the most powerful military, those fluctuations weren’t as severe as they were for most other contemporary fiat currencies. Which still left the question of where to set interest rates.

Under the new system, the Federal Reserve would establish rates—rates that it would charge when it lent to banks. But some machinations were needed. Since the Fed’s job wasn’t to finance banks’ activities, it had to implement its interest rate policies by creating a lending window with a very short term—one night.⁷

This might seem inconsequential, but it wasn’t. That overnight rate sits at the foundation of the lending market: if you set an overnight rate at 10%, financiers can calculate the rates for all other lending terms. By the time you get to your 30-year mortgage, it will be double that or more.

Paul Volcker did just that in the early 80s to quell inflation, which was raging at the time primarily because of two contributing factors: disproportionate reliance on foreign nations for commodities and Labor’s leverage over wages.⁸ After interest rates hit 15%-18%, a massive recession was triggered, finally crushing the inflation beast.⁹

But the war on inflation and the interest rate fight it spawned had been traumatizing, and so the Reagan Administration and its cronies on Wall Street and in Big Business were determined never to let such a situation again occur.

How We Got Low Rates

To prevent such a recurrent crisis, they thought, the economy would need low interest rates indefinitely. Theoretically, this could be accomplished by addressing either of those factors. However, in reality, reducing reliance on foreign nations for commodities would adversely affect the defense industry (fewer fighter jets to fight the Commies) and its well-connected lobbyists, and so was precluded.

Moreover, uncoupling our resource sector from foreign dependence would have meant a need for massive domestic capital investments rivaling those seen in the mid-Gilded Age.¹⁰ Without the political will to make such investments, it would fall to the private sector, which needed low interest rates.

The Point of Globalization

Globalization¹¹ was then conceived to offshore American jobs to Third World countries where wages were virtually zero, and environmental and labor protections were even lower. As a result, the unions would hemorrhage members, and American workers’ leverage at the bargaining table would vanish—taking care of wage inflation.

The low-cost (and concomitant low-quality) goods that would flood our markets would then lower price inflation. The American worker might get poorer, but they’d be able to buy more plastic trinkets from Walmart for less…if they somehow kept a job while outsourcing demolished much of the sector that provided reasonably good jobs.¹² Thus, America sold out its workers in terms of wages and plied them with bread (cheap goods) and circuses (reality TV and opioids). That was an intentional result of the globalization system, not an accidental outgrowth of it.

But this new social contract was a one-time gambit. What happens to the next generation when they fail to achieve the kinds of wage gains that their parents obtained?¹³

How Globalization Leads to Purchases of American Debt

At inception, the new system’s relegation of American workers wasn’t front and center. Instead, the markets were captivated by the new dynamic of massive capital flows around the world, and that meant interest rates.

Now, at this point, the Third World manufacturers could have insisted that they get paid in their local currencies—since they have little use for dollars. But this would have been horribly unaccommodating to Wall Street financiers. Besides, few currencies were as stable as the dollar, so why mess with a good thing? Thus, foreign companies and governments suddenly needed a way to make use of their piles of US dollars, which generally meant repatriating them. Wall Street sniffed blood in the water, and was more than pleased to help.¹⁴

It primarily did so by transmuting those offshore dollars into various domestic financial instruments, primarily USG-backed debt.¹⁵ Since there were so many of those dollars to exchange, our boys told them to just invest them in US Government obligations (Treasury Bills, Notes, and Bonds, as well as the debt of government-sponsored entities like Fanny Mae and Freddy Mac).

The Usury Economy: Globalization, Interest Rates, and Wall Street’s Rise

This is where interest rates come in. Unlike when you go to the bank to beg for a loan, if you have everyone in the world wanting to buy your debt (i.e., loan you money), you can charge the lowest interest rate possible.

This didn’t make the US immune to financial crises, but as asset values fluctuated globally, financial intermediaries produced a host of new products to “deal” with this volatility. As could be expected, they did so for a tremendous price, and so, with the backing of the USG (Reagan, Bush I, Clinton), they became richer than ever.

A career on Wall Street, even outside of the old white shoe firms like JP Morgan, became respectable. That trend of newfound respectability continued even after Black Monday fired a warning shot across the bow of financial stability. By the time Clinton fingered his way into office, Wall Street had firmly ingratiated itself among both ruling parties and convinced them to repeal Glass-Steagall.¹⁶

If transferring American industrial power to hostile regimes seems like a tough sell, enter the Wall Street salesmen. New “business news” networks were rolled out as the propaganda arm for financial capitalists eager to explain why we needed Globalization.

This time, easy money would be paid for not by running our printers, but by forcing “former” enemies to buy our bonds. The political classes would benefit from having an inexhaustible supply of buyers for our debt—money that could fund wars on communism, poverty, terror, and discrimination indefinitely.

In fact, the academy even invented a paradigm to give this swindle intellectual heft. They called it Modern Monetary Theory, which said borrowing doesn’t have to be repaid when you’re rich, and thus the Government should indulge its wildest fiscal fantasies on behalf of its donor or client classes.¹⁷ Financial gravity, we were told, no longer existed.

The largesse wasn’t even limited to the elites. With banks swimming in freely borrowed money, they could foist all kinds of credit products on consumers—even the ones who could least afford it…especially those ones.¹⁸ And when sober regulators demanded to know how they could absorb the defaults, the banks just muttered a few lines about “providing equal opportunities” and “expanding credit services to the marginalized” to the applause of the very same people who made their careers railing against Capitalism. In any event, rates were low enough that those “marginalized” people would surely be able to afford the payments.

The inundation of money structurally altered the incentives of Government. For Republicans, it was about rewarding their lobbyists in the defense and pharma industries; for Democrats, it was about expanding the bureaucracy and hiring thousands of incompetent partisans to fill its ranks.¹⁹

This perverted the incentives even further. Now, Forever Wars were a good thing because…the defense industry. COVID got you down? No worries, $4 trillion to our favorite NGOs and unions ought to help. MMT means it’ll never have to be paid back anyway.

One group that both parties decided needed rewarding was Wall Street. So in 1999, Congress passed, and Bill Clinton signed, the repeal of Glass-Steagall. Now the portal to the world of financial demons had been permanently opened, and all the ghouls poured through. Investment banks had hitherto been required to invest with their partners’ money—limiting the systematic risks of such investments. Now they were free to merge with retail banks, use those banks’ enormous deposit base as leverage, and bet the farm—which they did.

The Consequences of Wall Street’s Rise

The result was a litany of financial and economic problems, some exploding in our face like the 2008 Credit Crisis, others unfolding like a slow-motion train wreck (the durability crisis in consumer goods comes to mind). All of this was due to low interest rates.

Surely that’s the worst of it, right?

Not even close.

In the aftermath of the Credit Crisis, the Fed lowered its overnight rates but decided to also intervene directly in the market. They did everything they could to create artificial demand for debt, all while their enablers in Congress received their usual lobbying consideration.

As public trust in all the foregoing institutions plummeted, the elites spelled out their grand theory: make borrowing costs lower for big corporations, and they will build factories and stores, hiring millions of people. The elites were so good at convincing other elites of this plan that some even started making bets on it. Nassim Taleb, of The Black Swan fame, even went so far as to predict that cataclysmic hyperinflation was about to engulf the US, and he declared how his hedge fund was going to profit from it.²⁰

Then nothing happened.

Nothing happened because instead of reinvesting those hundreds of billions of borrowed money (in the form of new bonds underwritten by Wall Street banks) those corporations “sat” on it. The banks simply piled it on their balance sheets so that auditors might overlook all the non-performing loans. Industrial companies, which were supposed to build new stores and hire staff with the largesse they received at the hands of US taxpayers, instead used it to buy back shares (raising executive compensation) and undertake M&As (thereby preventing future competition).

That nationwide 5G network we were supposed to have ten years ago thanks to the hundreds of billions borrowed by AT&T and Verizon? Nah, let the Chinese build it²¹— we’ll use the money to finance a perennial regeneration of iPhones (each less impressive than the last).

Remember when Google said it was going to build a fiber optic cable network for everyone in America? Better to invest in infinite layers of DEI bureaucracy employing otherwise unemployable regime clients, most of them college-trained and many of them foreign.²²

A moonshot for cancer? Better to buy out the pipelines of up-and-coming biotech companies with unproven treatments or focus on the drugs Americans really want, like Ozempic or Vicodin. Cue the famous Idiocracy scene about what our best minds are up to:

Perhaps the most tangential, yet impactful, consequence was in culture. Why make movies people want to see, or books they want to read? Instead, they’ve produced some of the most epic flops (both financially and critically) in the industry’s history. Who needs blockbuster profits when you can borrow at 1% to 2%? Better to push ideology instead of worrying about the bottom line.

With rates so low, it’s easy to fudge the numbers in financial statements, and with Wall Street banks both employing the analysts who read those statements and the bankers who market their new bonds, what could go wrong?

The High Interest Rates Cure

If low interest rates are the disease, then high interest rates are the cure, and like many cures, they produce harmful side effects—effects that must be borne if we are to recover. There is no easy way out of this, which is why our endemically and irreversibly corrupt public officials will never agree to it. Nonetheless, it remains the least painful—and only—solution.

In fact, while high interest rates sound bad, they will actually benefit huge segments of society, particularly the productive ones, in massive ways.

The Winners of High Interest Rates

The Working Class

Members of the working class have been progressively squeezed out of the consumer loan markets, leaving only professional usurers—like the Shylocks at Visa—as their source of credit. They’ve also been priced out of the housing markets thanks to the hundred million foreigners that have crowded into our shores.²³

What’s the worst that can happen? If higher rates induce massive defaults on their unsecured debt (like CCs, personal loans), the real losers are the lenders. If it’s secured debt (mortgages, car loans) that defaults, then any mass realization attempt by lenders of their security will create a huge populist blowback.

What politician is going to defend banks when hard-working Americans are having their houses foreclosed en masse? During the Depression, the answer was penny auctions,²⁴ where foreclosed-upon farms were sold back at auction to their owners for a red cent, as a mob showed up to ensure the bank couldn’t screw over yet another farmer.

What might happen to Blackstone functionaries if they tried to reverse that this time? Nothing pleasant, though likely something much deserved.

As for those monied interests? They’ll take something of a haircut on usury-connected assets and so on. Yes, they will suffer somewhat…for once. Shrug.

Savers Will Benefit Too

Much of the reason for the proliferation of increasingly unstable and exotic financial products (especially after 2000) was the low-rate environment. Investors don’t like volatility, of course, but they like it more than low returns, and low rates mean low returns on fixed income assets. As rates go up, investors will reallocate their portfolios to bonds and savings, and this will re-incentivize savings instead of promoting 100% exposure to the endless casino of the stock market and similarly volatile, risky assets.

Critics might argue that if rates in America become excessively higher than elsewhere, it will trigger global capital flows that could prove catastrophic. Perhaps, but this is just all the more reason to deleverage ourselves.

China will certainly have problems. As capital flows back to America and the dollar rises, Chinese knick-knacks will become more expensive, and manufacturers will look elsewhere. With the right incentives—such as a McKinley-style tariff regime²⁵—those industries can be slowly relocated here, where their biggest market is anyway.

Of course, the usual ghouls will spill gallons of ink in National Review and Foreign Affairs about how this will involve Government interference in the markets. Gasp.

As if the US Government hadn’t already been interfering massively in the markets since the time of Roosevelt, pumping endless trillions into markets to keep the inflated Ponzi scheme going one more round, at an enormous cost to taxpayers.²⁶

These bad-faith arguments by paid lobbyists and useful idiots can be dismissed. The only people “impoverished” by the return of productive industry and the vast infrastructure that supports it will be the “Expert” class and its hangers-on. As shown by everyone from American System America to the Asian Tigers, prudent interventionist policy tends to be hugely helpful in creating a prosperous society.²⁷

Capitalism:

Remember how all those libertarian free marketers used to squawk about the creative destruction potential of Capitalism? That died with ZIRP (Zero Interest Rate Policies). Over a decade of artificially low interest rates has spawned entire industries of zombie companies, businesses that are addicted to continued, massive debt flows and terminally unprofitable.²⁸

These companies are kept alive only by the ability to roll their old debt into new debt (paying Wall Street for the privilege, of course) and stagger on. Whether these companies are formerly cherished brands (Cracker Barrel) or woke behemoths (Bud Light parent Anheuser-Busch InBev SA/NV), there is only one fate for them under the natural laws of Capitalism, death—a law that’s been put in abeyance by low rates. Demoting shareholder profits to the back burner, these companies have prioritized the creation of vast DEI bureaucracies like HR and marketing, using endless reams of debt to fund their ideological insanity even as shareholder returns and annual profits fall off a cliff.

Only high interest rates can return the capitalistic forces of causation to their natural position; when debt is expensive, they have to either make money or die. Right now, they’re doing neither, at great cost to America

Movie lovers:

Since about 2014, when Hollywood embraced DEI as an artistic M.O., the quality of entertainment has plummeted. Woke screenwriters have turned every show and movie into a parade of Bioleninist horrors out of an HP Lovecraft story, with the properly far-left message in support of dysgenic policies to boot. But it turns out the average person doesn’t like being lectured by a cosmic horror of an actress about how racist they are—who could have predicted that? The result has been staggering losses for the entertainment sector.

Still, the libertarian dimwits argue: if there’s a market for it, then it must still be capitalism. Except that there isn’t a market for it, and the only reason these companies haven’t filed for bankruptcy is that most entertainment companies are capitalized as conglomerates, making it easy to hide losses on consolidated financial statements. Disney, Viacom, and Paramount all have multiple channels to insulate themselves from the bad decisions of their studio businesses.

Combined with rock-bottom borrowing rates (for them, not you), this means they can ignore the fact that their studios and production companies can’t produce a saleable hit. Instead, they blame their audiences for being whichever form of “-ist” seems most likely to deflect attention from their losses.

As a result, these companies are heavily leveraged. With debt levels up to their eyeballs and general bad business practices ruining the other parts of their conglomerates as well, higher rates will make them blink. Surely, they will cannibalize whatever other divisions they can before capitulating, but capitulate they will. They’ll have to. Or they’ll go broke, and free up that creative bandwidth for those who are willing to make proper use of it.

American culture used to be the envy of the world. Now even Americans don’t want it, and the imports made for other big markets like China have become so censored that there’s no reason to call it ‘American’. High rates make it impossible for even the large conglomerates to long survive by rolling over their debt, forcing them into either bankruptcy or restructuring that will almost certainly result in the termination of money-losing woke “creatives”. Thus, we might get good movies again…as we did during the high-interest-rate ‘80s.

The Losers:

Naturally, there will be losers, and as already discussed, the monied interests, particularly those who are leveraged or deeply involved in speculation having to do with unproductive “assets” and sectors will be hit hard. We’re not sure that’s a problem, though. In fact, there’s likely a great deal of people out there who might view it as a form of poetic justice.

Other “heroes” of the once-capitalist system will also be on the hook:

Private Equity

We’ve already seen higher bills at the doctor’s office,²⁹ at restaurants, and even veterinarians. We’ve seen Americans’ houses foreclosed only to have them rented back at higher monthly payments. This is all because PE has been looking for places to invest the free money that they get preferential access to. Private equity firms (especially the big ones like Blackstone or Apollo) borrow tens of billions in the bond market, which they (or funds subordinate to them, hiding their involvement³⁰) use to buy up medium-sized businesses, or entire subdivisions of residential homes. They claim they can offer savings through that buzziest of buzzwords: “synergies”.

Of course, what really happens is cost-cutting until the customer experience is on par with the Third World, and higher prices in order to finance all the debt they’ve layered on the company. This has been a major issue in the medical industry, where hospitals and practices bought by PE funds have much worse patient outcomes and higher costs than those left outside their purview.³¹

With higher rates, that entire business model becomes unprofitable. The debt is too expensive, and prospective investors can stick to established, safer assets (particularly savings) rather than speculating on how high costs can be raised in a given metropolitan HVAC or gastroenterology market.

Venture “Capitalists”

The Tech Bros and their Venture Capitalist funders who brought us crypto scams, AI porn, mass plagiarism, and endless apps we don’t need, will howl when the cheap capital gets cut, for it is their lifeblood.

Of course, many VCs will retort that their funding comes not from debt but from private investors like billionaires and Ivy League endowment funds. This is partly true. Of course, they also receive funding from banks, special purpose funds, and other financial entities—all of whom borrow heavily in the public debt markets. In any case, those private investors, particularly the endowments, are chased into technology company speculation they don’t understand because of low interest rates on savings/fixed income; when the endowment or pension fund needs to earn 7% a year to pay out as it is supposed to, 2% rates on bonds force it into highly risky, speculative assets that might make up that return gap.

So, when the funds and endowments forced into speculation by low rates no longer have a reason to do so, those who profit off their need to speculate will have fewer funding options with higher rates, and the pipeline of oversaturated tech investments will be attenuated.

Cue the complaints that this will “hurt innovation” and drive the “brightest and best” to China. But in what world is this true? All the supposed innovation has scarcely made life better for Americans despite a quarter-century of heavy sales pitches. The lowest-hanging fruit was plucked a decade ago, and any real innovations now will have to be real, not digital. Not to mention the deleterious social and cognitive effects that most social media and AI are having.

Venture Capital and Private Equity do have important corrective functions in a capitalist economy, and some do good work in funding the productive slivers of the economy, but the level of capital allocated to them on account of low interest rates has skewed our lives, on average, for the worse.

The same is equally true for Big Tech. How many products did Apple, Google, or Facebook greenlight that were utterly divorced from their economic roles (let alone product channels)? Higher rates will force their CEOs to mark-to-market bad business investments that were justified only by cheap money, and focus, moving forward, on investments that are productive.

Blue States

Last but perhaps most important, those parts of the country that have put political patronage (cast as combating “discrimination”) before taxpayer interests for decades will have their day of reckoning.

Most Blue States, and particularly the Detroit-style cities within them, are near bankruptcy anyway³²—supported only by the implicit belief that the Federal Government will have to bail them out.

Higher rates will cause the mother of all fiscal crises, as some will be forced to borrow at junk bond rates while others will have to make cuts to public spending. Many will have to do both just to keep the gears running. Higher rates might help them discount unfunded pension liabilities in some cases, but the immediate cash crisis that will attend the failure to roll old debt (or service new debt) will take center stage.

As the crisis rolls on and the scarcity of monetary resources becomes obvious, political patrons in office will be forced to choose between their Marxist unions/NGO allies and the voters.

Since they will likely choose the former, we can expect explosive new political settlements in even the bluest states and counties. One thing is for certain, though: it will get a lot worse for them before it gets better. Municipal debt, state debt, corporate debt, and all the funds and endowments relying on it are at risk. Blue states will be particularly hard hit given their high levels of indebtedness and low levels of sanity, fiscal or otherwise.

High Interest Rates and a Shift in the Wind

Interest rates have been charged throughout history, and public debt – when managed well and domestically owned – has been the backbone of a responsible government and society.

Through Globalization, our Elites have shifted that responsibility for a time and fooled themselves into thinking that “everything is different” now.

But that time is drawing to a close, and higher rates now will fix many issues—not the least of which is forestalling catastrophe in the offing. The time to choose is fast approaching.

Thanks again for reading! If you found value in this article, please consider liking it using the button below, and upgrading to become a paid subscriber. That subscriber revenue supports the project and aids my attempts to share these important stories, and what they mean for you. Also, it gets you full access to paywalled articles, like the recent article on lessons for Americans from the Rhodesian Bush War.

1. Read it here: https://www.theatlantic.com/politics/archive/2004/10/privatizing-social-security-an-idea-whose-time-has-passed/377275/

2. The fun history of that term: https://articles.stockcharts.com/article/articles-journal-2015-07-plunger-investing--a-true-story/

3. If you’re interested in loans in Sumer: https://tontinecoffeehouse.com/2022/11/28/sumerian-loans/

4. In the Days of McKinley by Leech covers this period quite well

5. HW Brands covers the gold and silver fight well in his American Colossus: The Triumph of Capitalism, 1865-1900

Additionally, if you’d rather read something shorter but still informative, this article covers the gold vs. silver fight well:

Goldbugs vs. Silverites

6. This article puts the gold situation in context well:

OPERATION GLASSHEART

7. Explained by the Fed here: https://www.newyorkfed.org/markets/reference-rates/obfr

8. Again, this is a must read on this issue:

OPERATION GLASSHEART

9. Covered here: https://www.bu.edu/econ/files/2011/01/GKcr2005.pdf

10. Some of this covered in my articles on McKinley, such as:

11. What really helped globalization along was the destruction of the tariffs that had made America a protected economy for so long, as covered and put in context here:

And here:

12. As JD Vance notes in his Hillbilly Elegy, this wasn’t really the case, as few kept their jobs:

13. Libertarian economists love to chimp out about the fact that even at its peak, organized labor never accounted for more than a fraction of the private workforce (public sector unions being a different story). And it’s just like a libertarian to point to a big headline number while failing to understand important second-order effects that drive non-linear systems like economies: only a fraction is needed to have a global effect on the entire labor market. If unionized workers lead the way with wage gains, then there’s a very good chance corporations will need to follow suit.

14. The beginning of this is covered reasonably well by Chernow in The House of Morgan

15. Stormy Waters covers this frequently, discussing the offshore dollar. One of his better shows that touches on it is with my friend Ben Kelleren. Listen here:

Kontrarian Korner #20 - Stormy Waters

16. This was the famous post-Great Depression law that prevented investment banks from merging with deposit-taking institutions.

Its impact on the banking sector is covered reasonably well by Chernow in The House of Morgan

17. Note that this academic alchemy was conceived by intellectual fallacy: fiscal expansion (printing money) and bond issuance (deficit spending) are different ends of the same chimera.

18. Although at this point, even high earners struggle with credit card debt: https://bhgfinancial.com/personal-loans/debt-consolidation/why-high-earners-struggle-with-credit-card-debt

19. Disparate impact is a clear example of this:

20. An article from the time: https://www.businessinsider.com/wsj-hypes-taleb-related-hedge-fund-three-times-this-month-2009-6

21. The 5G buildout battle remains one China continues to win: https://www.foreignaffairs.com/united-states/china-still-winning-battle-5g-and-6g

22. The H-1B problem, for example, is huge:

23.

24. https://en.wikipedia.org/wiki/Penny_auction_(foreclosure)

25. Covered here:

26. One of the more recent bailouts: https://www.propublica.org/article/the-bailout-is-working-for-the-rich

Putting bailouts in historical context: https://www.ebsco.com/research-starters/politics-and-government/government-bailouts-private-industry

27.

28. A reasonable description: https://en.wikipedia.org/wiki/Zombie_company

29. Private equity in medicine:

30. Some of the perfidy in what they do covered here: https://medium.com/@michaelsonwilliams/blackrock-stealing-the-american-dream-and-a-no-money-down-real-estate-solution-f22c9dc37835

31.

32.