Musings Report #51 12-17-16 Bifurcation Nation: One Nation, Many Divides
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Bifurcation Nation: One Nation, Many Divides
I first used the term Bifurcation Nation in June 2013, to discuss the widening divide in wealth, power and income between the haves and the have-nots in America, which I divided into nine classes.
Now the divides are proliferating politically and socially, leading to the possibility that (as I have discussed on the blog) the nation is becoming ungovernable, at least by the standards of the past 60 years since the end of World War II.
One theme of my recent books is the transformation of the economy and society by forces that cannot be controlled by the usual political tools: in broad brush, changes unleashed by technology.
One of my major theses going forward is that these forces are creating a new mode of production, a term that includes the entire interwoven ecology of finance, economy, society and politics.
Technological forces are dividing the nation into distinct areas of "growth" and "stagnation." Richard Florida has been describing the growing dynamism of major urban areas for some years, most recently in The Most Disruptive Transformation in History: How the clustering of knowledge lays bare the need to devolve power from the nation-state to the city.
It's not just a clustering of knowledge; it's a clustering of GDP, capital, talent and opportunities to tap into the dynamism of these regions.
These two charts illustrate the enormous difference between these high-growth, high-density urban regions and the rest of the nation.
This divide is one reason why overall national statistics no longer reflect reality very well. Employment, wealth, income, GDP and opportunity are concentrated in a handful of high-cost-of-living metro regions. Lumping these areas into one bowl along with the rest of the nation leaves us no way to discern what's actually happening in the economy.
Consider average homes prices. Property values are soaring in these areas as the most ambitious workers seek to make their fortune or secure their piece of the American Dream in these regions. These soaring valuations are lifting the national average, distorting the reality than in much of the country, real estate valuations are flat or stagnant.
I think there is a wealth of opportunity in smaller urban and town settings, but the "winners" and "losers" in small cities and townships will depend not just on natural resources (energy, natural beauty/tourism, fisheries, river ports, abundant fresh water, clean air, etc.) but on policies that encourage entrepreneurship, small business and the networks of sharing ideas and capital that differentiate "growth" from "stagnation."
Summary of the Blog This Past Week
Recovering America's History of Progressive Populism 12/16/16
Why the Democrats Can't Let Go of Losing 12/15/16
"Fake News", Censorship, Darwin and Democracy 12/14/16
Is the Deep State at War--With Itself? 12/13/16
From Captive Audience to Open Democracy: Why the Mainstream Media Is Freaking Out 12/12/16
Best Thing That Happened To Me This Week
Great conversation with my longtime friend GFB at Zippys and an afternoon sampling char siu bao in my favorite Honolulu Chinatown shops.
Market Musings: Bonds and Yields
Bond yields are rising (see R.I.P. Bond Bull Market below), perhaps for years to come.
Let's take a look at the TLT 20-year bond ETF.
The bearish cross (20-week moving average crashing through the 50-week MA) is certainly negative, but it isn't definitive. The bearish cross in mid-2015 was followed by six months of sideways action.
In other words, bonds could decline further to the lows of 2015 and then stabilize as yields flatten out or perhaps even drop.
As Louise Yamada notes in the article, bond yields tend to form multi-year saucer-shaped bottoms.
But as the Sun Tzu quote below suggests, we should avoid being complacent about yields and bond valuations. One possibility is a rapid rise in yields that crash valuations, shocking everyone who didn't prepare for all contingencies.
From Left Field
Sam Francis on the Roots of Liberal Hegemony -- not familiar with his works...
Brokenheartlands: Arlie Russell Hochschild’s Strangers in Their Own Land
Hydro-Power, Manufacturing & Political Will: Can the American Rust-Belt Learn from China?
The Fifth Side of the Triangle: The self-satisfied cosmopolitan culture that sprang up among the affluent 20% or so of the industrial world’s population, who became convinced that the temporary ascendancy of policies that favored their interests was not only permanent but self-evidently right and just.
Walmart’s Out-of-Control Crime Problem Is Driving Police Crazy (via Maoxian)
Americans' Trust in Mass Media Sinks to New Low
Gold Headed Lower Under $1,000 into the Abyss
Human Population Growth Visualization (via GFB)
Can China's Alibaba Spread Jobs Around the World?
R.I.P. Bond Bull Market as Charts Say Last Gasps Have Been Taken (via Cheryl A.)
Forget Bitcoin and Mobile Pay. Cash Is Still King of the World: A study of seven countries shows reports of the death of cash have been greatly exaggerated. (via Joel M.)
Is air quality in China a social problem?
World trade records biggest reversal since crisis: First snapshot of data for 2015 highlights rising fears for global economy (via Mike Swanson)
"To be prepared beforehand for any contingency is the greatest of virtues.” Sun Tzu
Thanks for reading--
charles |
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