Cash is king, or so they say. We talk a lot about the disconnect between the stock market and the real economy and have been banging the drum for five years now that this economy is sick and broken. Like, deeply sick and extremely broken. One of the reasons that people don’t believe it is the historic returns in the equities market. And I’ve often said that this has taken a psychological toll on the American people who don’t participate in the market, because there’s a kind of shame that comes from struggling to get by when all you see on the TV screens are green lights and upward trendlines.
In August, this report was quietly released by the Federal Reserve. It shows the massive accumulation of money in the corporate sector since the Reagan era and how the most significant increase came during COVID. The inflation spike under Biden started to chip away at some of these reserves because interest rates increased simultaneously, making borrowing less attractive.
This is the trend to keep an eye on. At this point, even if rates come down it’s difficult to imagine that banks are going to be too keen to start lending at a furious pace given the degradation of economic data.
We’ve reached the “nowhere left to hide” point of our journey. We can’t keep printing money at this rate and risk devaluing the currency even further. Tariffs are crushing our trade partnerships and inflation has begun to show up all over the economy again. The job losses under Trump have been staggering and no amount of fudging numbers or firing statisticians can hide what’s going on. And this is what will finally bring the great reckoning to the overvalued stock market.
Here’s the thing about cash. It’s addictive. The corporations that have been stockpiling it since the GFC ran out of room in the mattress and started stuffing it anywhere and everywhere when the government flooded the market during COVID. Now we see that reserves are coming back down and there will come a point when corporations stop the bleeding and look to cut costs elsewhere. The only place left is to cut more jobs.
This is the definition of a vicious cycle.
Over a year ago now when we did our Project 2025 episode I said that Americans (and the rest of the world by extension) have no idea what’s coming. You can’t obliterate the job market and social safety nets and expect the economy to hold. And you can’t expect corporate America to suddenly gain a conscience and choose workers over cash. Cash wins all day every day in Milton Friedman’s America.
Other things I’m obsessing over…
There’s a John Candy documentary coming out soon. Every so often I revisit the closing scene of PT&A and I’m always struck by what a wonderful actor he was. His expressions are so authentic and this scene gets me every time.
Renaming the DoD to the “War Department” of old is the biggest little dick maneuver a wannabe dictator playing military chief could possibly do.
-Max
Killer Left Take of the Week
KLTW goes to Emma Vigeland with the assist from Matt Lech on The Majority Report as they break down RFK’s disastrous Senate hearing. Matt is a targeted sniper on TMR and gets to flex more fully on Left Reckoning with David Griscom. They’re all key figures in the true online left and Emma has grown into the anchor chair role over the years at TMR to become one of the more recognizable faces of the left. Anyway, the link below starts at the moment that Emma nails RFK’s worldview on the nose.
The 3 Punch Combination to Knockout the American People.
The U.S. is running out of options to service the national debt. Secretary Bessent announced that we will now use revenue from tariffs to pay down budget deficits, rather than reinvest them into the economy. Some are treating this as welcome news. At the same time, the GOP has formed a working group to draft up a “sequel” to the Big Beautiful Bill to deepen cuts to Medicaid and federal student aid. They’ll do anything other than raise taxes on those that can afford them. But tariffs and more cuts to vital programs will only hasten economic decline, so team Trump is running out of options to stop the bleeding. And that means only one thing: Printing more money. But that’s more complicated than it seems and will lead to disastrous results. It does explain, however, why Trump is so desperate to take over the Federal Reserve.
Here’s a snippet from the pod:
Max: The Fed is supposed to be an independent body but Trump has made no secret of his desire to stack the board with loyalists to politicize its policies and maneuvers. Say what you like about the Federal Reserve—and I have a lot to say about it—but the last guy you want directing traffic over there is Donald Trump.
The “left” is a wide spectrum with ever deepening divides. This week’s episode highlights two newsworthy items that perfectly illustrate the fracture between leftists and liberals and how we’re willing to accept anything on the Democratic side that shows signs of life; even if those things are undemocratic in nature. Part one addresses the fallout from the Wired Magazine article uncovering the relationship between online creators and a group called Chorus. The second part addresses California’s move to neutralize Texas’ recent redistricting effort designed to pick up Republican House seats in the midterms.
Here’s a snippet from the pod:
Max: Consider this. In the proverbial “person on the street” interview, if people were asked to describe what the Republican Party stands for, this is likely what you’d hear: “Republicans stand for free markets, liberty, closed borders, strong military, jobs.”
It’s mostly bullshit, but they repeat it so often that everyone knows it. Ask anyone what Democrats actually stand for—if you can get past stupid responses like “wokeness”—and they’ll probably tell you “Democrats stand for NOT Trump.”
What will it fucking take? I check in with this source periodically because it’s a composite of respected and consistent surveys. The right often accuses the left of Trump Derangement Syndrome (TDS) but the fact that Trump maintains a 90% approval rating says it all. The Epstein scandal! Nothing. Tariff chaos. Nada. Jobs imploding. Nothing to see here. Obliterating social safety nets, driving the economy into the ground, destroying public health. Is every Republican invested in the stock market or something? This is what we’re up against.
Headlines
Trump’s Bay of Pigs Moment
I’m curious to see what the fallout is from this investigative piece from the Times. This is unreal. Like, Bay of Pigs stupid. Who uses submarines to invade a country to plant listening devices? Seriously. One piece of the reporting that struck me the wrong way is how they describe the murdered fisherman as being “in the wrong place at the wrong time.” Um, I think our guys were in the wrong place. We really are the worst.
From the article:
“A North Korean boat appeared out of the dark. Flashlights from the bow swept over the water. Fearing that they had been spotted, the SEALs opened fire. Within seconds, everyone on the North Korean boat was dead.The SEALs retreated into the sea without planting the listening device.”
Susan Collins is finally facing a significant challenge from an unlikely Democratic candidate who is captivating more than just Maine Voters. Graham Platner has a booming voice and musclebound frame but the words coming out of his mouth are anti-establishment and decidedly progressive. Platner isn’t the only one looking to unseat Collins but he’s building a formidable fundraising and awareness lead in the crowded field. But the long-serving Republican Collins has an ace up her sleeve: old, rich Democrats.
From the article:
“Collins’s carefully nurtured reputation as a senator willing to counter Trump’s extremism is in tatters. Even as centrist a source as Time acknowledges that her ‘protest votes are as strategic as they are symbolic’ (in other words, almost never cast when they could actually stop a policy Trump wants). Collins voted for all but one of Trump’s cabinet nominees. In the first three years of Trump’s first term, she supported more than 96 percent of his judicial nominees, including Supreme Court Justices Neil Gorsuch and Brett Kavanaugh. She now claims she was misled by these nominees on abortion, but that doesn’t change the fact that the end of Roe v. Wade, along with other legal horrors, rests on her shoulders.”
Can someone tell RFK that COVID-19 is still around?
We shared a WSWS RFK article last week but had to dip back into the well again this week after his surreal performance on Capitol Hill this week.
From the article:
“The 11th wave of the pandemic is currently underway in the United States with virtually no reporting or acknowledgment from health authorities. Emergency department visits for COVID-19 have increased 15.2 percent in the most recent week, with test positivity rates at 9.9 percent nationally. This wave is being covered up more completely than any prior wave, even as the spread of COVID-19 is growing in 40 states. Under these conditions, Kennedy has systematically dismantled the very infrastructure needed to monitor and respond to this ongoing crisis, while drastically restricting access to COVID-19 vaccines.”
The fact that I’m enjoying this so thoroughly speaks volumes about my diseased mind. But it’s clearing up a lot of things in my head about why neoliberals are such assholes. It’s also showing the divide between the economic ideologues and the true racists who used neoliberalism as a cover.
“Neoliberals should have seen the end of the Cold War as a total victory—but they didn’t. Instead, they saw the chameleon of communism changing colors from red to green. The poison of civil rights, feminism, and environmentalism ran through the veins of the body politic and they needed an antidote.”
“Wow Max, 99, and Manny Faces way to go. I have taken a break from my podcasts for a while. I love the intelligent critical thinking and education I get listening to you all. I am glad you will get a wider audience with MeidasTouch.”
Glad you’re back Tracy! Wish I could say we Unf*cked the Republic in your absence, but sadly…
“The mission of AAVS is to end the use of animals in science through education, advocacy, and the development of alternative methods. Founded in 1883, the American Anti-Vivisection Society (AAVS) is the first non-profit animal advocacy and educational organization in the United States dedicated to ending experimentation on animals in research, testing, and education. We work with individuals, students and parents, educators, grassroots groups, corporate and government decision makers, and members of the scientific community.”
Are you in favor of California’s redistricting efforts? Do you see it as a necessary evil to fight fire with fire or a slippery slope that further erodes our Democracy?
Kastag7: Slippery slope. We should be the party of “Gerrymandering is bad and should be illegal.” I think that resonates with voters more and is a values aligned message.
attackofhubris: In our current environment I feel that it is necessary. I don’t like it at all, though. My major caveat is that if it doesn’t lead to nationwide non-partisan redistricting, then it’s not worth it.
NotTheBeeGees-CBG: If it means we FINALLY show some spine, I’m in.
KingMob: Idk it’s hard not to see all of this as a form of denial. I really don’t think we are coming back from this.
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