Tuesday , January 26 2021
Home / Charles Hugh Smith /The Most Hopeful Scenario for 2021

The Most Hopeful Scenario for 2021

Summary:
Choose wisely, America, or the options for a positive outcome will vanish like mist in Death Valley on a clear July afternoon. From the point of view of evolution, the most hopeful scenario for 2021 is the sudden and complete collapse of everything that is obsolete, inefficient, ineffective and sclerotic.When obsolete systems and entities pass away quickly, the cost and pain are processed and absorbed quickly as well: enterprises go bankrupt and their assets are liquidated, failed ventures close, and schemes that didn’t yield the desired benefits are scrapped. This is the evolutionary process. Whatever has lost its selective advantages will succumb to selective pressures and fade away. The problem arises when self-serving insiders siphon resources to keep their obsolete, inefficient,

Topics:
Charles Hugh Smith considers the following as important:

This could be interesting, too:

Daily Pfennig writes Currencies Rally Overnight…

Mises Institute writes Understanding the Action Axiom

Mises Institute writes It’s Time for a National Divorce

Mises Institute writes Per Bylund: Silicon Valley Is Bad At Entrepreneurship.

Choose wisely, America, or the options for a positive outcome will vanish like mist in Death Valley on a clear July afternoon.

From the point of view of evolution, the most hopeful scenario for 2021 is the sudden and complete collapse of everything that is obsolete, inefficient, ineffective and sclerotic.When obsolete systems and entities pass away quickly, the cost and pain are processed and absorbed quickly as well: enterprises go bankrupt and their assets are liquidated, failed ventures close, and schemes that didn’t yield the desired benefits are scrapped.

This is the evolutionary process. Whatever has lost its selective advantages will succumb to selective pressures and fade away.

The problem arises when self-serving insiders siphon resources to keep their obsolete, inefficient, ineffective and sclerotic gravy-train protected from selective pressures.Keeping a terminally ill human alive is an analogy: it’s possible to extend the life of a terminally ill person at enormous expense and effort, but the patient isn’t restored to their previous health or vigor–that is no longer even a possibility. They are no longer their previous self, and this is why people choose to avoid extraordinary interventions in their final phase of life.

Economically obsolete / terminal entities, on the other hand, always choose extraordinary monetary interventions to keep their gravy-train alive, even if they bleed the rest of the economy dry in the process.

If the buggy-whip industry existed today, Congress would grant it billions of dollars in low-interest loans, tax breaks and direct subsidies so those who made fortunes in the buggy-whip industry would continue to prosper, not from a productive activity but from subsidies and loans that ultimately weaken the entire economy and society.

The problem here is that it’s effortless and initially costless to conjure trillions of dollars out of thin air and use it to keep obsolete, inefficient, ineffective and sclerotic industries, sectors, agencies and schemes on life support. The eventual costs, consequences and risks are transferred to the entire economy, all to keep politically protected insiders and schemes well-funded even as their fundamental value proposition has collapsed.

This politically expedient “solution”–printing / borrowing trillions to stave off Natural Selection–is inevitably the first choice of corrupt, failed governments and central banks, and just as inevitably, this expedient “fix” eventually brings the entire economy to its knees.

Recall that risk cannot be made to vanish, it can only be transferred to others. By printing / borrowing trillions of dollars to prop up doomed zombies, the state and central bank (the Federal Reserve) have transferred the soaring risks of their mismanagement to the entire economy and society.

This politically expedient “solution”–saving the most inefficient and costly sectors because of the political power of insiders– is always the first choice of weak and/or corrupt leadership, for whom this is isn’t just the first choice, it’s the only choice.

History is emphatic: over-borrowing and devaluing the currency by over-issuing “money” leads to decay and collapse. The lucky few decay into tourist destinations as the remnants of their past glory retain a nostalgic glow of artistry and power.

The unfortunate many simply decay and collapse. Thus the most hopeful scenario for 2021 is that the obsolete, inefficient, ineffective and sclerotic sectors and agencies, no matter how sacrosanct, collapse or downsize quickly. This drastically reduces the cost and pain to levels that the economy as a whole can absorb.

The worst-case scenario is our weak and/or corrupt government and central bank keep all the doomed zombies on life support, a process that bleeds the economy of adaptability, flexibility, innovation and resilience. The path of least resistance, the politically expedientpath–over-borrowing and devaluing the currency by over-issuing “money”–leads to decay and collapse. There is no other possible result, no other possible outcome.

Choose wisely, America, or the options for a positive outcome will vanish like mist in Death Valley on a clear July afternoon.

The Most Hopeful Scenario for 2021

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

My new book is available!A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts (Kindle $7, print $17, audiobook now available $17.46)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.

Recent Podcasts:

Parallels of the Great Fire of Rome 64 AD to Today (with host Richard Bonugli) (31:40)

AxisOfEasy Salon #34: Reclaiming Capital and Agency

My COVID-19 Pandemic Posts

My recent books:

A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic($5 (Kindle), $10 (print), (audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake$1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print)Read the first section for free (PDF).

Become a $1/month patron of my work via patreon.com.


NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, William S. ($5/month), for your marvelously generous pledge to this site — I am greatly honored by your support and readership.

 

Thank you, John H. ($5/month), for your splendidly generous pledge to this site — I am greatly honored by your support and readership.

Powered by WPeMatico

Charles Hugh Smith
Charles Hugh Smith is an American writer and blogger. He is the chief writer for the site "Of Two Minds". Started in 2005, this site has been listed No. 7 in CNBC's top alternative financial sites. His commentary is featured on a number of sites including: Zerohedge.com., The American Conservative and Peak Prosperity. He graduated from the University of Hawaii, Manoa in Honolulu. Charles Hugh Smith currently resides in Berkeley, California and Hilo, Hawaii.

Leave a Reply

Your email address will not be published. Required fields are marked *