Is the Syrian War About to Experience a Major Escalation?

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The risk of a very serious escalation to the hostilities in Syria has increased materially in recent days. A huge concern to all Americans should be the insane cable in which 51 State Department war hawks recently urged President Obama to bomb government forces of Bashar al-Assad.

Read the rest here.

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What Does It take to Be Upper Middle Class?

What does it take to be upper middle class? According to one analyst, the answer is: at least $100,000 a year for a family of three. The Growing Size and Incomes of the Upper Middle Class (Urban Institute).

The paper claims the upper middle class has grown from 12.9% of the population in 1979 to 29.4% in 2014–in essence, the shrinkage of the “middle class” is not just from households dropping down the ladder but millions of households climbing up to the upper middle class.

Not Just the 1%: The Upper Middle Class Is Larger and Richer Than Ever (WSJ.com)

While the evidence broadly supports this secular shift–the concentration of income and wealth in the top 20% increases while the wealth and income of the bottom 80% stagnates–I think the claim that 30% of all U.S. households are upper middle class grossly overstates the reality, which is it’s become increasingly costly to even qualify as middle class, never mind upper middle class.

I’ve explored these topics in depth over the past few years:

How Many Slots Are Open in the Upper Middle Class? Not As Many As You Might Think(March 30, 2015)

What Does It Take To Be Middle Class? (December 5, 2013)

If we measure financial characteristics of middle class status rather than income, we find $100,000 is borderline middle class, not upper middle class.The above essay lists the baseline of 10 minimum metrics of middle class status. In high-cost regions, $100,000 barely qualifies a household as middle class; to be upper middle class, households must earn closer to $200,000.

A household income of $190,000 is in the top 5% nationally. According to the Social Security Administration data for 2013 (the latest data available), individuals who earn $125,000 or more are in the top 5% of all earners. Two such workers would earn $250,000 together. The 2.8 million households with incomes of $250,000 or more are in the top 2.5%.

I think it is reasonable to define the 12% of households earning between $125,000 (top 15%) and $350,000 (the cut-off for the top 1%) as upper middle class. This is around 14.5 million households, out of a total of 121 million households.

This is a far cry from 30% of all households qualifying as upper middle class.What we’re seeing is the inflation of “middle class” to “upper middle class,” just as a B grade is now an A, and jobs that don’t require a university degree now nominally require a bachelors degree or higher.

The increasingly desperate effort to reach the upper middle class is evidenced by a slew of books and articles on what it takes to succeed in an increasingly winners-take-all economy, and on the anxieties of those trying to “make it”: note that most of the articles are published in magazines/media outlets that appeal to the very upper middle class that’s anxious about maintaining their tenuous hold on prosperity:

How to Save Like the Rich and the Upper Middle Class (Hint: It’s Not With Your House) (WSJ.com)

The Hidden Cost for Stay-At-Home American Parents (Bloomberg)

The War on Stupid People: American society increasingly mistakes intelligence for human worth (The Atlantic)

The Limits of “Grit” (New Yorker)

The Talent Code: Greatness Isn’t Born. It’s Grown. Here’s How. (via Ron G.)

The Geography of Genius: A Search for the World’s Most Creative Places from Ancient Athens to Silicon Valley (via Ron G.)

Grit: The Power of Passion and Perseverance (book)

I’ve laid out my own bootstrap blueprint in Get a Job, Build a Real Career and Defy a Bewildering Economy (hint: don’t cling to credentials and privilege as your strategy–acquire skills and entrepreneurial income streams).

What’s left unsaid in all these articles is much of the upper middle class is prospering due to privileged positions that are increasingly at risk of disruption–a topic I discussed in If You Want More Jobs and More Job Stability, Disrupt More, Not Less (June 21, 2016) and How Many Law Schools Need to Close? Plenty (June 20, 2016).

And just a reminder: of the supposed 30% of households who are upper middle class, only the top 10% have significant wealth-building assets: that tells us in no uncertain terms that two-thirds of the supposedly upper middle class 30% are only middle class.

A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

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Double Down with Gerald Celente: The Fed Burns Money, and House Prices Bubble

“Double, double toil and trouble; The Fed burns money, and house prices bubble. Beware my friends, for the trend is not your friend. The fourth turning is here. QE4 is coming. And the Fed Chairman speaks in wicked tongues.” Once again, the Fed has held rates as, once again, jobs numbers disappoint. Heading into a volatile presidential election season marked by political violence, what economic trends can we expect in the US as the financially strapped electorate demands things get better. Now. Double Down talks to trends forecaster, Gerald Celente, on his outlook for this political season and the economy in which it bubbles.

CLICK ON IMAGE BELOW TO LISTEN TO PODCAST

Double, double, toil and trouble. The Fed burns money, and house prices bubble.

Double, double, toil and trouble. The Fed burns money, and house prices bubble.

CLICK ON IMAGE ABOVE TO LISTEN TO PODCAST

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“We’ve Run Out of Road!” – Peter Schiff

The man who predicted the Great Recession of 2008 just issued a New Warning:
An Even BIGGER Crisis is on the Horizon…

Click Here For Peter Schiff’s Financial Crisis Warning:


Republican Senators Use Orlando Shooting to Push for Increased Government Spying Powers

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Well we knew this was coming, and it’s no surprise to see Mitch McConnell leading the charge. A man who never saw a 4th Amendment violating piece of legislation he didn’t like.

Reuters reports:

U.S. Senate Majority Leader Mitch McConnell set up a vote late on Monday to expand the Federal Bureau of Investigation’s authority to use a secretive surveillance order without a warrant to include email metadata and some browsing history information.

Read more here.

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Financial System Exploding? Fund Manager Warns Deutsche Bank Is Collapsing

The global financial system is close to going supernova.

This bank is obviously collapsing and any money manager who holds onto this stock for clients is in serious breach of fiduciary duty.  This is the 2016 version of Enron.

But it won’t be a “Black Swan” event…

Click Here For Full Coverage On Deutsche Bank’s Warning to the Financial System:

 


[KR930] Keiser Report: Economic Anxiety in Divided America

We discuss economic anxiety in a ‘divided America,’ in which ‘rosy averages’ bypass most. In the second half, Max interviews Chris Whalen about negative rates, outlook downgrades and central bank policies.


Offshore Shakedown: FATCA, The Panama Papers and Why You Need a Self-Directed IRA

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I recently sat down for an interview with TDV Offshore‘s Managing Director Paul Seymour to discuss the worsening worldwide situation for financial privacy and economic survival. Topics included the Panama Papers, precious metals, self-directed IRAs, 401Ks, The Foreign Account Tax Compliance Act (FATCA) , offshore bank accounts, offshore corporations and Paul’s belief that a financial catastrophe may loom as soon as October 2016. Read more ›


If You Want More Jobs and More Job Stability, Disrupt More, Not Less

Two recent studies reflect the ongoing rapid transformation of the U.S. economy: The New Map of Economic Growth and Recovery (eig.org)

The U.S. Labor Market Is Far More Stable Than People Think (itif.org)

I’ve addressed the dynamic mix of technical and entrepreneurial skills, social and financial capital and infrastructure of opportunities required to successfully navigate this transformation in my books Get a Job, Build a Real Career and Defy a Bewildering Economy and The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.

Here’s the problem in a nutshell: job growth, new businesses and wage gains are becoming increasingly concentrated in a small number of geographic regions and a narrow class of workers / entrepreneurs while the overall economy struggles to maintain productivity gains, which are ultimately the only sustainable source of prosperity.

the productivity growth rate has been slumping since 2005.

Longer term, productivity gains have flowed to the top 5%–those workers and entrepreneurs with higher levels of education, ownership of assets and access to cheap credit:

This chart shows the concentration of income in the top tier: the top 5% have garnered the gains while the incomes of the bottom 95% have stagnated.

The overall employment picture has changed for the worse: the percentage of the populace that’s employed has fallen from peak periods.

The number of workers with full-time jobs has stagnated in the 2000s, breaking a 50-year trendline of steady growth of full-time jobs.

The growth of new businesses (annual change in the number of firms) has also cratered: business creation never recovered in the “recovery.”

The number of new businesses in the US is falling off a cliff

Growth in jobs and new business has become increasingly concentrated in a handful of high-population metropolitan counties. In the high-growth early 1990s, half of all new businesses sprouted in 125 counties nationwide. In 2002-2006, the number of counties that were home to half of all new enterprises fell to 64. In the “recovery” years of 2010-2014, half of all new firms arose in a mere 20 counties nationally–an astonishing concentration.

The point of The U.S. Labor Market Is Far More Stable Than People Think is that disruption generates more stability in the job market, not less. The obvious stagnation of employment and wages for the majority of workers has created a feeding-frenzy of potential explanations and causes, and this has led to all sorts of proposed policy tweaks.

The point here is: if you want growth and stability, disrupt more, not less. The vast majority of policy tweaks are ultimately aimed at protecting privileged classes from disruption and reducing disruption of the status quo–in government, higher education, healthcare, defense, etc.

Reducing disruption to protect the privileged status quo is akin to poisoning the patient to “protect them from harm.” The only way to successfully navigate a rapidly transforming economy is to embrace disruption by making it easier and cheaper to disrupt the protected status quo.

In my book The Nearly Free University and the Emerging Economy: The Revolution in Higher Education, I lay out a blueprint for reducing the cost of college by 90% while greatly improving the value of that education.

It’s Time to Ditch 4 Years of Costly College for Directed Apprenticeships (June 2, 2016)

One reason why jobs and entrepreneurial are increasingly concentrated in counties with high densities of population and capital is these locales possess the infrastructure of opportunity I describe in my book Get a Job, Build a Real Career and Defy a Bewildering Economy– the traits author Eric Weiner explored in his book The Geography of Genius: A Search for the World’s Most Creative Places from Ancient Athens to Silicon Valley.

I have often discussed the cultural capital and decentralized, dynamic models this great transformation favors, for example: Flexible Labor Is the Future (June 1, 2016)

In essence, we have a choice: 1) try to freeze history in its tracks, so those who are currently privileged remain privileged. This will slowly strangle the economy and increasingly concentrated gains in the hands of the few. Or 2) embrace disruption of the status quo as the only path to widespread prosperity and stability.

A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

My new book is #5 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book’s website.

 

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Chinese VPN Provider Now Accepts #Bitcoin

Popular Chinese VPN Provider announces support for #Bitcoin

Popular Chinese VPN Provider announces support for #Bitcoin.


It’s Not Just the UK – Widespread Support for EU Referendums Seen Across the Continent

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If you aren’t paying close attention to what’s happening in Europe, you may be surprised by the extent of “elite” panic at the notion that the British people could decide to leave the EU. Here’s just one example, from Donald Tusk, president of the European Council.

Why is it so dangerous? No one can foresee what the long-term consequences would be. As a historian, I fear that Brexit could be the beginning of the destruction of not only the E.U., but also of Western political civilization.

While there’s no doubt that a Brexit will result in major disruptions to the status quo system, isn’t that the point? Moreover, that’s some downright apocalyptic talk by Mr. Tusk. What’s driving it?

Read the rest here.

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How Many Law Schools Need to Close? Plenty

America is in the opening stages of a massive surplus of over-credentialed workers. The default setting for 50 years has been: if you want a secure upper-middle class salary, get a law degree, MBA, PhD or other graduate-level professional degree.

The massive surplus is now apparent in J.D.s (law degrees) and PhDs. The writing is already on the wall: there aren’t enough jobs for law school graduates, and this scarcity of high-paying legal jobs will only increase going forward. These two articles provide the context:

The tech start-up planning to shake up the legal world (via Lew G.)

An Expensive Law Degree, and No Place to Use It (via Joel M.)

The only solution for the surplus of workers with law degrees is a massive, permanent reduction in the issuance of new law graduates. The only way to achieve this result is for a significant percentage of law schools to close their doors.

What’s the percentage that must close to restore some balance? An unfettered market would discover the price of attending law school and the number of schools needed to fulfill diminishing demand for workers with law diplomas.

But we don’t have an unfettered market–we have a government-sanctioned system of debt-serfdom. Law students can borrow up to $200,000 for a three-year law program, and so surprise, surprise, the cost of that three-year program is–yup, $200,000.

This gargantuan state-supported debt-serf machine enabled prices to soar without regard to the value of the education, its utility in the marketplace or its market cost.

The glut in over-credentialed workers is not limited to law: The PhD Bubble Has Burst: Graduating ‘Doctors’ Are Having Trouble Finding Work (Zero Hedge).

As I have often noted, graduating 50,000 PhDs in chemistry annually does not automatically create 50,000 jobs for the graduates.

Our system of government-sanctioned debt-serfdom has created perverse incentives for colleges to raise prices and for students to become over-credentialed, a process that has enriched universities and their administrative legions while impoverishing students who are dumped into a job market saturated with over-credentialed but underskilled workers.

This reality is visible in the declining pay for all classes of workers, including the most highly educated:

It doesn’t have to be this way. Radically improving our higher education system while reducing the cost of that education by 90% is the topic of my books Get a Job, Build a Real Career and Defy a Bewildering Economy and The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.

So how many law schools need to shut down to restore the balance of supply and demand? It depends on how fast technology reduces the demand for legal expertise. A 20% reduction in the number of law schools and law school graduates would be a good start, but if technology and outsourcing start eating jobs, the eventual number of law school closures might have to exceed 50%.

One quick way to discover price and demand would be to eliminate all student loans. Once students could not borrow money, the cost of higher education would collapse to a cash-value level. The number of colleges and universities would plummet, and supply and demand would soon find a new equilibrium, minus the debt-serfdom.

Income, Education and Inequality in the “Recovery”: Prepare to be Surprised (March 20, 2015)

It’s Time to Ditch 4 Years of Costly College for Directed Apprenticeships (June 2, 2016)

Flexible Labor Is the Future (June 2, 2016)

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