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We Are Slipping Down the K2 Bottleneck of Economic Disaster

By January 21, 2022Commentary

I really enjoy reading about economics and investing and Barron’s is one of my favorite periodicals.  If you read it for a few years, you are pretty astute on how economies and companies work.  Every year in January they convene a panel of experts to talk about the economy, the markets and good or bad investments.  And every year even these very smart people are usually quite wrong.  Large, chaotic human systems are too hard to predict in the short term, but maybe easier in the long term.  This year’s group was relatively sanguine about interest rates and the economy, which astounded me because they just ignored larger trends which spell true catastrophe for the living standards of most Americans other than the government workers who all have absurd pensions and health benefits for life and a few billionaires.  We may delude ourselves that we are prospering, that inflation is temporary and debt doesn’t matter for another year or two but over the next decade we are going to suffer brutal and wrenching economic turmoil.

We have reached a level of debt and annual deficits in the country from which escape is impossible.  Another thing I enjoy, mostly from an armchair now (although I did make it up Mt. Kilimanjaro at the age of 67) is mountaineering.  The fiercest mountain in the world is K2 and to climb you generally have to go up a slope called the Bottleneck.  Slip there and you are gone–falling several unstoppable miles to a grisly death.  That is where we have placed our economy.  Now if we were led by truly outstanding guides and our team was the cream of the crop climbers, we might have a prayer.  Hmmm, is that who is leading us now?

Instead we have strapped on a 500 lb weight of a massively oversized, incompetent and slow government, and are using shoes with ideological vaseline soles to traverse this treacherous slope on which we have placed ourselves.  We cannot both limit inflation and have real growth, not with our level of debt and deficits.  And we have such a huge percentage of the population dependent on government handouts of all kinds, and such a burden from government workers and government retirees, that it is politically impossible to tackle the deficits, let alone the debt.

The most ominous trend, however, which threatens our quality of life is the rampant woke bullshit and DEI nonsense which pervades our companies and our government economists.  It is just getting going, but the productivity, profit and innovation-destroying nature of these ideologies should already be apparent to anyone.  A whole new level of bureaucracy to hinder speed and efficiency; hiring, retaining and advancing workers based not on ability but on the color of their skin, or sex, or sexual orientation or religion; sowing division among workers rather than bringing them together for a unified purpose.  Yep, that is a recipe for economic growth and increasing standards of living.

And what is hilarious about this if you have a real gallows sense of humor is that it is fed and supported by an army of Russian and Chinese and other trolls, who inflame division and anger on all sides and who provide financing to help groups who are undermining the ability of our society to provide a better life for all of us.  Anyone who looks can find the evidence of this, the CIA and FBI have continually warned about it.  These groups have pushed the extreme ideological makeover of our universities which in turn has corrupted every institution and profession in the country.  No economy could survive in these circumstances, just look at Communist Russia or China under Mao.  But as much as we say these countries are our adversaries, we just ignore what they do with no pushback, much less a counterattack.

And much as I hate to say it, it is too late to reverse what has been set in motion.  We have allowed the complete perversion of our institutions and I don’t even know how we would begin to change that.  And there really is no recovery from our economic straits without immense pain that people can’t imagine enduring.  Our younger generations truly are a majority of snowflakes, incapable of handling the slightest discomfort or dealing with any challenge.  Russia and China know this and they are coming for us so that their leaders can expand their own egomaniacal visions of a totalitarian world shaped solely by them without interference from an economically and militarily powerful United States.   So enjoy that thrilling slide down the ice slope before you hit empty air and the plunge to oblivion.  You are living the decline of the American prosperity.

Join the discussion 11 Comments

  • rob says:

    I swear I’ve been expecting doomsday since the mid ’90s. My girlfriend just rolls her eyes. Even I think I’m an idiot after waiting this long for something that never happens. I thought for sure 2000 was it. Nope. I thought for sure 2009 was it. Nope. Maybe this time.

    • Kevin Roche says:

      I am with you, and when I get in these moods I remind myself of that and then I remind myself that one of the worst things we fight against is the assumption that because we manage to survive our own stupidity once, or twice, or three times, doesn’t mean we will every time. there are lots of dominant countries before us that aren’t so great now.

  • Andy J Kornkven says:

    Sorry, but your “Russian and Chinese troll farm” bogey man isn’t working for me. It seems the forces sowing division throughout our society are right here under our noses. For a regime to blame its own failures on some faraway “other” is a well known Communist technique, familiar to both Mao and Stalin, among others. Question: why should we believe the FBI and CIA any more that we do the CDC and MDH?

  • Rob says:

    You can count on Americans to do the right thing, after first exhausting all other possibilities.

  • Dan Waller says:

    Kevin, what keeps you in MN? Family, Friends?

    MN = Super liberal, high crime, high taxes, terrible winters. Summers are decent, but short.

  • Ann in L.A. says:

    No one ever talks about the Social Security Trustees report. I believe the last one said that in 2034, just 12 years away, every single Social Security check will get a 24% haircut. That is if the current laws remain unchanged. And, since they didn’t have enough data or time to really see the impact of 2 years of shut downs, unemployment, and loss of production; they also didn’t really factor in covid.

    But, if anyone brings up the disaster that has been looming, unchanged, now for decades, and which would have been fixable if the American people and the representatives they send to Washington had acted like grown-ups decades ago; they are accused of wanting to throw granny off a cliff.

    I remember being a senior in college in 1989, and back then the disaster year was 2029–40 years we’ve had this hanging over the country. After a little math, I realized that’s the year I become eligible for full benefits.

  • Donaldw says:

    KR you thoughts are so welcome and appreciated. But rather than K2, I’d look at the Grand Canyon. We are in a very deep hole. It is a race against time. My sense is that the tide is turning, there is an awakening which is in progress and growing. Despite the power of our corrupted institutions like education, the press, the government bureaucracies, and Congress, and the growing corruption of social media, there are voices of sanity (like healthyskeptic) and it appears to me they are growing. People are reacquainting with the value and necessity of freedom. The pandemic, to look on the bright side, has made the alternative visible for all to see and the consensus drifts from approval. A difficult climb? Yes. Hopeless? No way to know, but I don’t think so.

  • Cliff Hadley says:

    Fine rant, Mr. Roche. The one comfort is, we’ve gotten through terrible times in the past by the skin of our teeth, when all the smart money was on our failing. I’m reading the Hamilton biography, and if his were not harrowing times, I wouldn’t know what is. I pray that greatness in soul and nerve and character will again come forward. Don’t despair.

  • Chuck says:

    Yep, totally agreed. We are in for a downward ride. The only question is the slope – will it be fast or slow?

    I seriously do not see a way out of our current mess. I think it has to all collapse and then start over. The younger generation is totally brainwashed. The best case is some split of states, ie a divorce.

  • John Oh says:

    The only glimmer or realistic hope I have is a republican congress and administration that will reduce regulations (they have in the past) and enable smaller companies to form and compete. Things are really getting sclerotic because of crony capitalism and the new ever popular, guaranteed to kill innovation and competition, stake holder capitalism. Just remember: The dark ages really happened.

  • joseph sabol says:

    I share your concern but I also have a bit of optimism that we will turn things around. The things we are going through are eerily similar to the things we went through in the late 1970’s. Russia in Afghanistan, (Ukraine), high inflation, high crime in the cities, high Oil Prices, inept Administration, corruption aplenty in the Federal Government, and terrible music. Hell, even bell-bottom pants are back in style. Fortunately for those of us who lived through that time, this woke up enough of the folks to usher in the 1980’s and the prosperity of that period. I believe we are approaching a similar inflection point. And much like the late 1970’s transition into the 1980’s, the first two years of the 1980’s were still a struggle. History does repeat itself because Americans don’t pay attention to history and continue to make the same mistakes by putting one political party in total power.

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