Will Karl, be the comeback kid?
Why do we think the world is about to see the resurrection of the “comrade culture club” over the next ten years?
Make no mistake; there will be a visceral political reaction to the coming acceleration of labor disrupting technology. We got a little taste of it in the 2016 election.
Just wait until it hits the doctoring, lawyering, and accounting class.
To take an example, COIN (contract intelligence) interprets commercial loan agreements that previously consumed 360,000 hours of lawyers’ time per year. ROSS intelligence is another example, combining a simple, Google-like search system to find up-to-date cases, law and extensive advice in seconds, by quickly sifting through databases of legal history. — marketMogul
Karl and Friedrich wrote about it over 150 years ago:
On disruptive labor destroying technology (AI and the robots are coming):
Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. – Marx and Engels
On free-trade and globalism (protectionism on the rise):
The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere. – Marx and Engels
Then there are the political leanings of the millennials:
Millennials opt for socialism over capitalism
Given the choice, most Americans would opt for a capitalist country. However, one third would prefer to live in a socialist nation. Millennials are the leading force behind this preference with more than four in ten opting for socialism. – YouGov
Absolutely stunning. More than 50 percent of American millennials prefer to live in a socialist or communist country. Can you blame them?
Debt is a happiness killer. None of us can be truly happy if we’re saddled with debt.
…At the present time, the average American household with student debt owes about $49,000. Graduates in their twenties spend more than $350 per month, on average, on student loan payments and interest. Since the average “entry-level” job was worth about $50,000 a year in 2016 for new graduates, “truly average” college grads in America can expect to see their earnings garnished by between eight and 10% for roughly ten to twelve years after they graduate. — Forbes
Therein lies the specter that will haunt the investor class over what is sure to be a tumultuous next decade.
Of course, we are not predicting America is on the verge of a communist revolution.
Nordic Capitalism Cometh
We do believe, however, if things continue as they are, and there is not a major political and economic reset, the move to Nordic capitalism, or Nordic socialism — call it what you will — is a done deal in the United States.
Time To Wake Up
Look at the rising political power of the high school students over the past week, now revolting over the country’s revolting gun laws. It feels like a watershed moment to us, and they smell it, a chance to change the culture. They and their older brothers and sisters are the future.
Moreover, what do you think their reaction will be when they have the epiphany the baby boomers have screwed most of them economically?
One should always be cognizant that an increase in the relative price of assets (prices to income), and housing, in particular, is generally a transfer of wealth from the younger generations to the older generations.
The $112 trillion question is what generation will take the hit? Will it be the baby boomers as their asset prices mean revert to income or the younger generations who are forced to pay up for the overvalued assets? Or will a leveling of the playing field take place through the political system?
We have been writing about the coming Clash of Generations for years now.
No Sugar Coating It
Our recommendation to the one percenters and the comfortably
numb retired baby boomers, who have bequeathed to and saddled the younger generations with massive pension and public sector debt liabilities?
To the 1% ‘ers, “You better Wake The F&*k Up!”
Sources: Global Macro Monitor | ZeroHedge