What Tends to Happen at the End of a Vicious Cycle

I am an investment advisor, working for a fairly substantial firm (as such firms go), that I helped my two partners organize more than twenty years ago. The compliance policies I myself enforce upon our employees – and, so, upon myself – do not allow me to discuss securities except under the aegis of our firm’s publications and website. The following, accordingly, does not constitute a recommendation or offer either to buy or to sell any security, or any type of security. Indeed, it does not even mention any security, whatever. It is not a discussion of securities.

So much for the preliminaries.

The astounding run up in economic statistics – financial markets, employment, manufacturing jobs, consumer confidence, business confidence, you name it (even the Fed seems fairly sanguine) – since the beginning of the Trump Administration have taken many analysts by surprise. But they are just what one would expect to observe at the end of a vicious cycle, and at the beginning of a virtuous cycle.

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Playtime is Over

When you reduce selection pressure as the West has massively done since the Industrial Revolution, you get a lot more depravity (you get r instead of K), because the relative penalties to error and vice go way, way down. And vice versa: when you increase selection pressure, the relative rewards to virtue go way, way up, so you get lots more virtue.

We have no immediate prospect of an uptick in natural selection pressure, although the handwriting is on the wall. It’s out there (it always is).

But Trump is imposing artificial selection pressure (in part because he and his ilk can comprehend the writing in flame on the wall (to the depraved at their banquet, it is gobbledygook, nonsense, mere noise: mene, mene, tekel upharsin)). His basic message is simple: Playtime is over, no more pretend, everybody out of the pool, time to get dressed and back to work.

The liberals are going crazy because this strictly artificial – i.e., merely social, rather than biological – increase in selection pressure pushes the same neural and cognitive levers as would be triggered by a sharp uptick in natural selection pressure. It feels to them like a sort of death. They are terrified of death. Trump makes them aware of their death. Like death, he just doesn’t care about their whining (as much as they are used to). So they panic, and then they turn to defensive rage. It’s a tantrum.

Minimum Wage or Minimum Insanity?

The minimum wage is in the news again as a putatively respectable policy option among some on the alternative right, in particular for Donald Trump, who recently said he’d be willing to consider the idea. It is an odd thing for him to have said, given his emphasis on the necessity of reducing immigration from the Third World.

Is the prevailing wage for entry level jobs too low to live on? That’s a way of saying that there is an oversupply of labor. So, don’t raise the minimum cost of labor; that will subsidize the oversupply, increasing and exacerbating it while reducing demand for US workers (and increasing demand for robots and Chinese workers). Instead, remove the artificial factors that generate the oversupply to begin with.

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