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Musings Report 2019-10 3-9-19 A Quiet Revolution Is Brewing
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For those who are new to the Musings Reports: they are a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
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A Quiet Revolution Is Brewing
I'm reading a fascinating history of the social, political and economic context of the American Revolution: The Radicalism of the American Revolution by Gordon Wood.
What is particularly striking is the critical role played by rapid social changes in the mid-1700s. Conventional histories focus on the political context, but more important were the changes in family and social relations, and the social impact of the economy moving from quasi-feudal forms of patronage that were ultimately personal relationships to impersonal (and far more profitable) market forces.
It was these social changes that nurtured the revolutionary zeal of the average (non-elite) male citizen.
Boiled down to its essence, Americans came to appreciate the precariousness of their prosperity, and this led to a deep political split in the populace. Between 30% and 40% of the populace remained loyal to the British Crown/King, and these Loyalists reckoned it a political and economic disaster to separate from the "Mother Country."
The majority felt the exact opposite: their prosperity and liberties were all too easily snatched away by a Parliament and/or a Monarch which had little to no regard for their prosperity or liberties.
The precariousness of the relatively widely distributed prosperity and political liberties drove average people into an all-or-nothing choice: there was no middle ground, and the bitterness of the divide was life-changing. Benjamin Franklin, for example, completely cut off his eldest son when the son remained a Loyalist, despite the decades of affectionate intimacy they'd shared.
Such prosperity and liberties that existed were reserved for Caucasian males, of course; women had the right to divorce and own property but no political suffrage, and slaves had no rights unless they were freed by their owners.
The social changes in the family and economy Wood describes are of especially keen interest, as they mirror the present era in so many ways. Parents in the 1760s were admonished to treat their children as individuals and to use reason rather than punishment. Parental authority was thus reduced from rigid authoritarianism to a much more nuanced and difficult process of nurturing and guidance--a process familiar to every parent today.
The economy was changing rapidly as well, as the lines of authority that were once personal became market-contractual. Where small farmers in the early 1700s sold their harvests to upper-class planters or merchants (i.e. the gentry), by mid-century Scottish trading houses were buying small farmers' harvests directly, requiring written contracts rather than personal trust.
Small farmers made more money, and the landed gentry lost power over the flow of goods.
This disruption of traditional authority stretched from the home to the marketplace and ultimately to the British Crown and Parliament, which saw the rebellious colonists as wayward children who deserved a good lashing to set them straight.
All of which brings us to the present, when once again profound social, political and economic forces are changing the nation in ways that are difficult to understand in real time. Traditional authority is weakening, and traditional markets are being disrupted, leaving most participants far more financially precarious than they were a few decades ago.
To take one important example: where owning a home once meant being able to count on slow and steady appreciation of home equity, in today's bubble-and-bust economy, timing is everything: poor timing can trigger the loss of one's down payment and equity, and to capture that equity requires selling at the top. This manic market structure demands skills and experience few possess.
As I noted yesterday in the blog, politics as practiced in a bygone era of stability no longer offers any solutions to these profound disruptions. Middle ground has vanished because there is no middle ground, and ideologies have become quasi-religious because they no longer offer any practical guidance in a society and economy that is still being transformed by the 4th Industrial Revolution.
Once again Americans are awakening to the precariousness of their prosperity and liberties, and traditional forms of belonging, loyalty and authority are unraveling. As the pie shrinks, the struggle to maintain one's own share at the expense of others becomes Darwinian, and so it's no surprise that finance and politics are increasingly becoming winner-take-all or winner-take-most zero-sum endeavors.
A quiet revolution is brewing as the old social, political and economic structures fail. The politics of compromise is giving way to the politics of borrowing whatever sums are needed to placate every elite and every constituency. This is the pathway to financial debauchery as the currency will be destroyed by the politics of expediency.
New social, political and economic structures will arise that are stable because they reflect new realities. Describing these structures is the purpose of my work.
Highlights of the Blog This Past Week
What If Politics Can't Fix What's Broken? 3/8/19
Trade Isn't China's Only Worry 3/6/19
The Fed's "Wealth Effect" Has Enriched the Haves at the Expense of the Young 3/5/19
What Killed the Middle Class? 3/4/19
Best Thing That Happened To Me This Week
Family fun in Downtown Hilo and the winery in Volcano. A good time was had by all.
Musings on the Economy: Fine Dining Is Too Expensive
'Fine dining' occupies a particular niche in urban economies. Well-known restaurants are a major draw for tourism and a significant source of employment. Given the big tabs, 'fine dining' wait staff can earn appreciably more than those working at lower-cost restaurants.
But 'fine dining' is incredibly expensive in cities with high rents and regulatory burdens, and so restaurateurs live precariously on a knife-edge: they must charge enough to pay their enormous costs but not so much that dining out becomes unaffordable for all but the top few percent of households.
With costs for all small business soaring, it's not surprising that The 'Fine Dining' Concept Is Dying (via Brandon) in San Francisco.
I expect the financial pressure to get much more dire as the global recession (slowdown) slashes disposable income for tourists and locals alike.
Even the so-called casual and fast-casual dining isn't cheap, and these overcrowded sectors will be thinned by recession as well.
Cities have become accustomed to restaurateurs tolerating long permit processes and crazy-expensive fees and rents, but those days are fading fast. The number of people with the capital and desire to risk hundreds of thousands of dollars on opening a new bistro are dwindling fast.
As high costs for rent, labor and regulatory burdens snuff out hundreds of restaurants, cities will awaken too late to their role in raising costs to the point that the customer base can no longer afford to enjoy fine dining or even casual dining. Landlords who became accustomed to collecting $10,000 a month for a small space will find there are no takers at $9,000 or even $8,000.
Rents, wages, overhead and regulatory costs are 'sticky' and decline grudgingly even as the market evaporates. Price-conscious customers vanish overnight while costs remain high. Therein lies the rub: the cost structure of restaurants will not drop as quickly as income. This mismatch will trigger an avalanche of closures once the losses pile up.
From Left Field
The Overprotected American Child
We’ve reached ‘peak social media,’ says Reddit co-founder Alexis Ohanian
Do Not Disturb: How I Ditched My Phone and Unbroke My Brain -- eventually there will be a counter-revolution and it will be unhip and uncool to be staring at your phone all the time....
The Breaking Point: Why Do Women Initiate Divorce More Than Men? According to a recent study, 90% of all divorces are initiated by college-educated women. Why do women initiate divorce than men?
After Winning a $15 Minimum Wage, Fast Food Workers Now Battle Unfair Firings
Car Culture and Suburbia in the American Psyche
The Hard Lessons of Dianne Feinstein’s Encounter with the Young Green New Deal Activists (Bill McKibben)
Florida is drowning. Condos are still being built. Can't humans see the writing on the wall?
Who Speaks For the Suffering Upper Middle Class?
New data suggest these high income earners are living paycheck to paycheck, have fewer assets, and can't retire. -- it's all about where you live. $200K is still a tidy income in most of the Midwest, but it's bare-bones survival in the SF Bay Area, NYC, West LA etc.
Russian-Style Kleptocracy Is Infiltrating America (via David E.)
The True Story Behind an Iconic Vietnam War Photo Was Nearly Erased — Until Now (via Ian L.) --deep dive into the personal history of the Vietnam War...
Demographics, Debt, & Debasement: A Picture Of American Insolvency-- important must-read on the demographics of a shrinking pie....
"Show me a hero, and I will write you a tragedy." F. Scott Fitzgerald
Thanks for reading--
charles |
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