The US housing affordability crisis continues to worsen as mortgage rates skyrocket to two-decade highs while the cost of an average home is still at bubbly levels. Financing costs are through the roof, and anyone earning less than $100,000 has been priced out of homeownership. 

A new report via real estate brokerage firm Redfin Corp. found that in October, the average buyer needed to earn $107,281 to afford the monthly mortgage payment of a median-priced home, up a whopping 46% from a year ago of $73,668. 

Considering there have been a record 19 consecutive months of negative real wage growth, most of which have been under President Biden’s tenure, many prospective homebuyers have likely given up and are now renting (or back in their parent’s basement). 

“Affordability challenges are a major reason why home sales have slowed so dramatically over the last few months,” Redfin said in the report.

What’s made the affordability crisis worse is the Federal Reserve’s most aggressive interest rate hiking in decades to quell inflation has sent the 30-year fixed mortgage above 7% within the last several quarters. 

This has caused a ‘payment shock’ as elevated rates, high home prices, and faltering wage growth have priced out millions of Americans. 

According to the National Association of Realtors, today’s souring homebuying environment has been described as the ‘worst in decades’. 

None of this should surprise readers since we first stated in March that soaring interest rates would significantly challenge housing affordability. 

Today, we see the “Death Of The American Dream And Home Ownership.” And what’s the result: you’ll rent and own nothing… Well, that’s a very similar statement from the World Economic Forum: by 2030, “you’ll own nothing, and you’ll (still) be happy. 

More importantly, all of this suggests home prices could be on the cusp of a major downturn. 

We suspect 2023 will be a tumultuous year for the housing market until the Fed pivots.

… And we almost forgot that a Bloomberg OP-ED earlier this year said anyone earning less than $300k should eat lentils. 

…

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Those searching for an explanation of why there was no “red wave” giving Republicans huge gains in Congress in this year’s midterm election should compare this year’s election with the midterm election of 2010. In 2010, Republicans gained a net 63 House seats. While Republicans then did not gain control of the US Senate, they did gain six Senate seats.

These Republican victories in 2010 were propelled by the Tea Party and the liberty movement. These movements became prominent during the waning days of the Bush administration. The liberty movement was advanced by grassroots supporters of my 2008 presidential campaign. The liberty movement’s focus was, and is, on restoring constitutional government in all areas, ending our interventionist foreign policy, and changing our monetary policy by auditing and ending the Federal Reserve and legalizing alternative currencies. Early on, the Tea Party largely focused on opposition to the 2008 bank bailouts.

There was overlap between the liberty movement and the Tea Party as many members of both groups fought for auditing and ending the Fed, ending bailouts, and preventing Congress from passing Obamacare.

Many Republican candidates in 2010 appealed to Tea Party voters by not just promising to repeal Obamacare. They also promised to work to restore limited, constitutional, fiscally responsible government in all areas. In contrast, in 2022 the average Republican candidate offered little in the way of a substantive agenda. In fact, few Republicans called for reversing President Biden’s massive spending increases, much less for restoring the federal government to its constitutional limitations. Despite the controversy over new critical race theory and transgender related policies in government schools, there has not been a renewed push to shut down the Department of Education.

Many Republican candidates in the 2022 midterm election also failed to make an issue out of their Democratic opponents’ support for mask and vaccine mandates and other instances of covid tyranny. Those who did oppose the covid tyranny, such as Florida Governor Ron DeSantis and my son Kentucky Senator Rand Paul, won landslide victories.

The Tea Party’s success in forcing the Republican Party to focus on a more pro-liberty, limited government agenda was short lived. Soon after the 2010 election, the Republican establishment returned to its big spending ways. Spending and debt continued to rise under President Trump and a Republican Congress. Republicans even failed to deliver on their signature promise: repealing Obamacare.

The 2010 midterm election showed that people will respond to candidates offering serious pro-liberty ideas and policies. However, the Tea Party’s rise and fall also shows the danger facing ideological movements that become too close with one political party. These movements will start pulling their punches when one of “our team” begins casting bad votes. The argument goes that we must support big government Republicans or we get REALLY big government Democrats.

Fortunately, the liberty movement has remained committed to principles. As the failure of the welfare-warfare state to deliver peace and property — and the failure of the Federal Reserve to fulfill its mandate of ensuring stable prices and low unemployment — become clear, more Americans will join the liberty movement. Support for the liberty movement will accelerate when the inevitable economic meltdown occurs. This meltdown will be precipitated by a collapse in the dollar’s value and the rejection of the dollar’s world reserve currency status. It will bring the end of the welfare-warfare state and the fiat money system. Hopefully, the liberty movement will ensure the welfare-warfare state and fiat money system are replaced by a return to limited constitutional government, individual liberty, and peace.

A very rare, or we should say unprecedented, moment was caught on a hot mic at the G20 summit in Bali, Indonesia on Wednesday which involved Chinese President Xi Jinping openly berating Canadian Prime Minister Justin Trudeau.

In the encounter, President Xi is seen angrily confronting Trudeau for leaking the details of a conversation that happened between them at the summit, which the Chinese leader assumed was private. It was an absolutely humiliating scene for the Canadian PM, especially as it was caught on film – a clip of which is now going viral. 

Intimate insight of Xi lecturing Trudeau at G20. Xi said it was not ok, to leak their previous discussion points to newspapers.

“That’s not the way the conversation was conducted” pic.twitter.com/AxOJF9RtxE

— Marcel Münch (@_mm85) November 16, 2022

The episode also caught the attention of Bloomberg, The Guardian, and other international outlets. The two conversed via a translator standing close to them. 

“That is not appropriate, and we didn’t do it that way,” Xi said in Mandarin, at first with a half-smile. 

“If there is sincerity, we can communicate well with mutual respect, otherwise the outcome will not be easy to tell,” he added, charging Trudeau with misleadingly conveying the contents of a prior dialogue to the media. “Everything we discussed was leaked to the paper(s), that’s not appropriate.”

The tense exchange continued, with Trudeau hesitantly trying to calm the Chinese leader, who is rarely if ever seen venting or losing his temper in public (Chinese state media seeks to carefully present his image to the public). Trudeau cut in: “In Canada we believe in free and open and frank dialogue and that is what we will continue to have, we will continue to look to work constructively together but there will be things we disagree on.”

By then a visibly frustrated Xi cuts him off, firing back, “That’s great, the conditions first” – and then quickly shakes Trudeau’s hand and briskly walks off. 

The day prior, on Tuesday, the two leaders held a 10-minute informal meeting, the contents of which did not result in a press readout issued from either government. Meanwhile, Reuters speculates on the likely source of Xi’s exasperation: 

His displeasure was likely a reference to media reports that Trudeau brought up “serious concerns” about alleged espionage and Chinese “interference” in Canadian elections when meeting with Xi on Tuesday, his first talks with the Chinese leader in more than three years.

A VERY RARE insight into just how blunt President Xi can be if you act in a way that is unbecoming of a world leader.

Here he absolutely schools Trudeau after the latter leaked their private conversations (inaccurately) to the media.

Trudeau walks off like a scolded puppy. pic.twitter.com/iyPHx5wolk

— Andy Boreham 安柏然 (@AndyBxxx) November 16, 2022

One commentator underscored his impression that at the end of the exchange of pointed words Trudeau walked off “like a scolded puppy.”

Authored by Jeffrey Tucker via The Epoch Times,

What began in 2008 and continued for the better part of 14 years appears finally to be coming to an end. The era of cheap money and credit is over.

It’s hard to wrap one’s brain around the implications. It will affect all of business life and personal finances. It will dramatically change financial decisions and also affect the culture. It’s going to amount to a return to good-sense, value investing, and companies that have to actually make a profit the old-fashioned way.

I’m not just talking about layoffs in Big Tech. But those are very real. Amazon is laying off 10,000 workers in management layers—which everyone in corporate America knows are the the most useless people in any business. They got puffed up beyond reasonable size completely due to seemingly infinite resources and forever rising stock valuations based on nothing but inflated reputations.

Such cutbacks are occurring in every major company that reached gargantuan size. Twitter was just the beginning because soon after Facebook (sorry, Meta) announced the same, while many other companies that lived off ad revenue on the internet are experiencing the profitability squeeze as we headed into a solid recession (it will become obvious in months that we are already there).

It also affects real estate, the residential markets of which are already freezing up. And commercial real estate in big cities is similarly affected, particularly offices that are still only half-full. Lacking a buyers’ market, prices will have to come down relative to where they are today, though they are likely to remain inflated over valuations from 2019 due to persistent inflation that is only very gradually calming down.

The huge issue today concerns the rate of return on the safest place to park and move money, namely U.S. debt. For nearly a decade and a half now, short-term interest rates have been negative. This is without precedent. It amounts to the loosest-possible monetary policy. By incentivizing capital to chase anything but safety, and discouraging savings in all forms, finance received a huge boost. But so did everything else, including crypto.

Looking back, it seems obvious that the craze for extreme risk, the who-cares attitude about the pace of business expansion, the magic-beans environment of digital tech, the claims that society has somehow managed to commoditize attention without committing resources, not to mention out-of-control government spending—all of this was propped up by zero-interest rate policies adopted after the last housing market crash.

The innovation perhaps seemed costless at the time. Ben Bernanke came up with the idea. Drive rates to zero to spare the financial system and macroeconomic environment but suppress the normal inflation that would follow through an accounting trick. The Fed would pay a higher than market rate to banks to keep their assets at the Fed, which would lock them away to keep them from creating inflationary pressure. For this great innovation, he was heralded as a genius.

What was the downside? For a while, it seemed like there was none. Savings did not fully collapse beyond their previous level simply because inflation was in check. And yet keeping money in Treasuries was no place for return. So money and capital went on a wild hunt for the whole of the 2010s, times when anything seemed possible both in finance and government. Rates were zero, homes were affordable, and credit was plentiful for everything and everyone.

Every kid could go to any college and rack up six figures of debt learning quasi-Marxist social theory, and porting that over to the workplace where high-flying fancy firms would employ them at high salaries to be clever on Slack and otherwise push woke philosophy. It was in this period that academia was flush with money and no longer had to worry about customers, so it began the great purge of conservative thinkers or anyone who disputed any aspect of the new religion.

So too it went in the corporate world, which came to dismiss old-fashioned concerns like serving customers and stockholders and instead pushed philanthropy and alignment with social and climate justice. It was this environment of infinite plenty that encouraged this simply because the possibilities seemed limitless and there seemed to be no cost at all.

It was precisely during this period of paper-fueled illusion that ESG and DEI were adopted by the best and brightest as central concerns in corporate life, and the experts at the World Economic Forum were on hand to pronounce that balancing the books is not nearly as important as signaling all the right virtues. Media backed up the craze at every step.

All of this was made possible by Bernanke’s scheme. To appreciate how radical it was, we can adjust the federal funds rate by inflation and look back to the end of World War II and see. Rates very rarely went into negative territory except in the 1970s owing to high inflation. But once that problem was fixed, rates rewarded savers and kept economic rationality at the forefront from the 1980s to 1990s. These times were denounced as cowboy capitalism but the truth is that savings were high and value investing was popular. The prosperity of those years was on a firmer footing than anything that followed.

After 2008, all bets were off. We plunged ever further into the abyss of negative rates. The Fed itself ballooned up a balance sheet as never before—effectively stuffing underperforming assets in every closet and filling up the basement too.

Fed funds 1954–2022 adjusted for inflation. (Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker)

It was unsustainable, obviously, and the Fed planned an escape which began in 2019. It did not last thanks to the pandemic response, which called on the Fed to do the unthinkable. It went crazier than before. This time the destination of the new money was different. Instead of cold storage, the new money flooded the streets as hot money to spend right away.

The Bernanke chicken finally came home to roost, 14 years later and following massive damage to economic structures, financial markets, time horizons, and the culture at large. Everything awful had enjoyed a vast financial subsidy: bogus corporate ideological binging, fake credentialing, fashionable socialistic philosophizing, and bad science. Bernanke’s seemingly costless policy created a world unhinged from reality.

After all these years, we now see the cost in intolerable levels of inflation. The Fed needs to put an end to it by driving up real rates above zero. That is going to require far more than what it has done so far. And to really repair the damage will require many years of restoration of balance sheets, a reshuffling of the workforce from fake to real jobs, and a return of sanity in financial markets and corporate culture.

Will Jerome Powell do it? It’s very likely. He doesn’t want his legacy to be the central banker who devastated the dollar’s value. He wants to be remembered as a Paul Volcker who made the hard choices even as the whole world was screaming at him. Wall Street today keeps hoping for some respite from the war on inflation but they are hoping against hope. Powell still has a very long way to go.

Thus does the new era of tight money begin. I can’t think of a better poetic ending to the age of excess than the disgrace of the silly man Sam Bankman-Fried and his merry band of hucksters and druggies who bamboozled the whole of the ruling class into believing that they had some kind of Midas touch to mint money to fund all the causes the hard left sees as holy. FTX died a quick and fabulous death, and with it the dreams of a fully woke pool of infinite funding.

The transition from fantasy to reality is going to be extremely painful, not just financially but psychologically for a whole generation that imagined they could live a life untethered from all norms and rules of the past. The truth is that the dollar-based world has been living a 14-year lie. That truth is going to be a hard pill to swallow, harder to digest than Adderall, more difficult to play than League of Legends, but much more in keeping with a sustainable prosperity in the long run.

Apple could be sourcing US semiconductors for its devices in the next few years, signaling the company’s move to rejigger complex and now unreliable supply chains across Asia. 

CEO Tim Cook spoke with engineers in Germany during an internal meeting about sourcing chips from a plant in Arizona in 2024, according to Bloomberg. 

“We’ve already made a decision to be buying out of a plant in Arizona, and this plant in Arizona starts up in ’24, so we’ve got about two years ahead of us on that one, maybe a little less,” Cook said. 

Cook explained Apple could broaden its sourcing in the Western world to purchase chips from Europe: 

“And in Europe, I’m sure that we will also source from Europe as those plans become more apparent.”

The meeting included Apple services chief Eddy Cue and Deirdre O’Brien, the head of retail and human resources. 

Bloomberg pointed out that the Arizona factory Cook was referencing is likely the one being built by Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker. Last week, there was news that TSMC was expanding its US footprint by constructing another advanced semiconductor plant.

Apple currently sources its chips from TSMC plants in Taiwan, which Cook said produces about 60% of the world’s processor supply. 

“Regardless of what you may feel and think, 60% coming out of anywhere is probably not a strategic position,” he warned.

The security of Taiwan has been a significant issue as China considers the self-ruled island part of its territory. Any invasion would cut TSMC’s supply chain and trigger global economic turmoil overnight. 

Cook realizes the current geopolitical risk in the region will only worsen and is driven to revive the US semiconductor industry with help from the US government’s $50 billion legislation known as the Chips and Science Act.

Bloomberg had some concerns about TMSC’s new factory: 

A lingering question is whether the factory as planned is suited to Apple’s needs. 

The Taiwanese company has said that the plant will initially have a capacity of 20,000 chips per month and use a 5-nanometer production process. That wouldn’t satisfy Apple’s near-future desire for more advanced, 3-nanometer chips.

However, Bloomberg said TSMC could “theoretically introduce advanced production more quickly than it has so far announced. Apple also could potentially use the Arizona production for less complex components in its devices.”

And this news comes as Apple has sustained about a $1 billion hit due to recent zero Covid lockdowns in China at its factory in Zhengzhou, according to analysts at Jefferies. 

Apple has also shifted some iPhone 14 production from China to India to diversify supply chains. 

Apple is reducing its reliance on China and beefing up its supply chain management strategy in response to the ongoing de-globalization trend. 

Ming-Chi Kuo, an analyst for TF International Securities, said the US market could be entirely supplied with Apple products made outside of China within 3-5 years. 

A recent Rabobank analysis of ‘friendshoring’ showed US companies shifting production outside of China could end up in countries like Vietnam, India, Brazil, Bangladesh, Indonesia, Mexico, Turkey, Egypt, and South Africa.

If Apple wants to simplify its supply chain, perhaps chip production in the US and assembly in Mexico, this scenario could take years to execute. 

Authored by Simon White, Bloomberg macro strategist,

Retail stocks face becoming the poorest-performing sector as the cumulative impact from higher rates causes consumption to weaken further.

Tuesday was a reminder that markets remain vulnerable to geopolitical risks. Still, the inflation backdrop remains the market’s primary driver, and the interplay between real growth and rates will continue to be paramount.

The S&P is down almost 17% on the year, but this masks some big underlying sectoral differences. Energy and Oil and Gas are up on the year, yet almost every other sector is down. The worst-affected are some of the most interest-rate sensitive — tech, real-estate and homebuilders, and retail.

We get October retail sales data today, with expectations for a robust 1% m/m rise after a flat move last month. But retail sales and consumption face two strong headwinds.

First, credit is tightening as rates rise. Consumption is heavily reliant on credit, and banks’ willingness to make consumer loans is falling. As the chart below shows, this tends to lead to weaker retail sales.

Credit card debt has risen to new all-time highs in the US. But anecdotally, this is being used to fund the purchase of essentials as the cost of living rises, and thus does not represent a broad-based bulwark to consumer spending.

Second, housing costs are rocketing higher. Mortgage rates are at a 20-year high, weighing on affordability. As affordability falls, more disposable income will be channeled into mortgage repayments and less into consumption. The chart below shows this will be a significant headwind for retail sales over the next year at least.

Both Walmart and Home Depot announced earnings this week (Target is later today) that exceeded expectations. But the headwinds from higher rates are formidable. They operate with a lag, meaning their cumulative impact should have an increasingly negative impact on the economy.

Further, retailers still face a huge surplus in inventory after the pandemic that has led to the highest inventory-to-sales ratios in 15 years. Walmart noted its inventory position has significantly improved, but there are other retailers who will be faced with taking losses to clear up excess stock.

Retail is already one of the worst performing sectors this year, but it looks especially exposed to the twin blows of higher inflation and higher rates.

The changing of the guard at Twitter is officially complete.

For snowflake employees at the company that weren’t ready to grasp that fact, Elon Musk likely made it abundantly clear this week when he released an ultimatum to employees, demanding they commit to a new “hardcore” version of Twitter or leave the company with severance pay, WaPo reported. 

“If you are sure that you want to be part of the new Twitter, please click yes on the link below,” an email to employees said. Employees were also made to “sign a pledge” to stay on and work for the company, the report says.

The pledge was to be signed by 5PM eastern on Thursday, or else employees would be terminated and receive 3 months of severance pay. 

Twitter “will need to be extremely hardcore,” Musk said in his email, adding: “This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.”

The ultimatum is expected to lead to more attrition at the company, WaPo reported. “Those writing great code will constitute the majority of our team and have the greatest sway,” Musk had said about the new era he is ushering in. 

The notice comes just days after Musk demanded a return to the office for all employees. Last Wednesday evening, Musk sent out his first email to employees about “difficult times ahead” and the end of remote working unless he approved it, according to Bloomberg. The new rules were enacted immediately, requiring employees to be in the office for at least 40 hours per week. 

Musk’s leadership is now in its third week. On week one, he fired half the workforce, or about 3,700 jobs, to drive down costs following his $44 billion acquisition. The billionaire has launched an $8 subscription for Twitter Blue and attached user verification to it to drive higher revenues. He told employees his goal is for subscriptions to make up at least half of Twitter’s revenue. 

Update (1417ET): 

NASA’s Artemis I uncrewed Orion capsule is headed to the moon. The first view of Earth from the spacecraft was posted on Twitter. 

As @NASA_Orion begins the #Artemis I mission to the Moon, the spacecraft captured these stunning views of our home planet. pic.twitter.com/Pzk3PDt7sd

— NASA Artemis (@NASAArtemis) November 16, 2022

Here’s another breathtaking view from the spacecraft. 

New views of planet Earth from @NASA_Orion as #Artemis I journeys to the Moon. Orion is 9.5 hours into a 25.5-day test flight. pic.twitter.com/CBaA4ZOK4X

— NASA (@NASA) November 16, 2022

NASA placed a manikin named “Commander Moonikin Campos” in the Orion capsule for the 26-day mission around the moon. The space agency released a video inside the capsule. 

While #Artemis I is uncrewed, a manikin named “Commander Moonikin Campos” is among the test devices flying aboard @NASA_Orion. The name honors NASA engineer Arturo Campos, who helped bring the Apollo 13 crew safely home to Earth. https://t.co/B5x3fSQQ74 pic.twitter.com/2gs2eC7pWi

— NASA (@NASA) November 16, 2022

More on the mission. 

*  *  *

Update (0715ET):

Two hurricanes, several technical issues, and two months later, NASA launched the Artemis I mission early Wednesday from its  Kennedy Space Center in Cape Canaveral, Florida. 

“[F]or the Artemis generation, this is for you,” NASA’s launch director Charlie Blackwell-Thompson said as she gave the go-ahead for liftoff at 0148 ET. 

We are going.

For the first time, the @NASA_SLS rocket and @NASA_Orion fly together. #Artemis I begins a new chapter in human lunar exploration. pic.twitter.com/vmC64Qgft9

— NASA (@NASA) November 16, 2022

NASA’s Space Launch System, or SLS, the most powerful rocket in the world, has catapulted the uncrewed Orion capsule into space and embarked on a 26-day mission around the moon before returning to Earth. 

If Artemis 1 mission is successful, which would end with the Orion capsule splashing down in the Pacific Ocean on Dec. 11, then Artemis 2 and 3 flights will follow. Artemis 2 is scheduled sometime in 2024. That mission will propel four astronauts around the moon. Then in 2025, Artemis 3 could include a return of humans back to the lunar surface. 

* * *

After three delays, NASA confirmed a new launch window for the Space Launch System (SLS) rocket, an uncrewed Orion spacecraft, for Wednesday morning. 

The Artemis 1 rocket launch was scrubbed in late August (read: here) and early September (read: here) due to a liquid hydrogen leak at an interface between the SLS and mobile launcher at the agency’s Kennedy Space Center in Florida. 

NASA appears comfortable with the next launch attempt, with a two-hour window beginning at 0104 ET Wednesday. 

The @NASAKennedy clock is counting down to #Artemis I launch. It started with call to stations at 1:24 a.m. this morning. The two-hour @NASA_SLS launch window opens at 1:04 a.m. ET on Nov. 16.

Learn more: https://t.co/Hzdf440SBc pic.twitter.com/u8s1QzQrQf

— Boeing Space (@BoeingSpace) November 14, 2022

If the launch goes to plan, it will be the first flight of the SLS and send the unmanned Orion Spacecraft around the moon. 

“I feel good headed into this attempt on the 16th,” Mike Sarafin, Artemis mission manager at NASA headquarters in Washington, said during a press briefing on Sunday. 

“The team is moving forward as one unit,” Sarafin added. “We’ve just got some work to do.”

Besides prior leak mishaps, NASA outlined Hurricane Ian also delayed timelines. 

“Engineers previously rolled the rocket back to the Vehicle Assembly Building (VAB) Sept. 26 ahead of Hurricane Ian and after waving off two previous launch attempts Aug. 29 due to a faulty temperature sensor, and Sept. 4 due to a liquid hydrogen leak at an interface between the rocket and mobile launcher. Prior to rolling back to the VAB, teams successfully repaired the leak and demonstrated updated tanking procedures. While in the VAB, teams performed standard maintenance to repair minor damage to the foam and cork on the thermal protection system and recharge or replace batteries throughout the system.”

If all goes well, the Artemis 2 mission could propel four astronauts on a flyby mission around the moon in 2024. Then by 2025, Artemis 3 mission would allow for the first crewed moon landing on the moon. 

Watch Launch Live Here:

Authored by Steve Watson via Summit News,

Two prominent Republican Senators have called for the leadership of the party to be overhauled following the midterm election failure, with one describing it as a “funeral” for the GOP as we know it.

Texas Senator Ted Cruz told Fox Business viewers that it would be “insane” for the party to continue as it was with the same leadership.

“Leadership elections need to focus on how actually we’re going to lead. The pattern of our current leadership has been to give into the Democrats,” Cruz declared, adding “Just about every big, bad thing that was passed in the last couple of years was passed with all the Democrats and 10 or more Republicans.”

“The Democrats never do this. When we had Republican majorities, got nothing passed with all the Republicans and a few Democrats,” Cruz continued.

“And yet, for some reason our current leadership thinks it’s a good idea to facilitate the destruction that Chuck Schumer and the Democrats are doing,” Cruz continued, further proclaiming “I don’t think our voters want that.”

When asked if he was “taking aim at Mitch McConnell,” Cruz responded “Well, in the next 24 hours Senate Republicans will decide whether or not we have leadership elections. Leadership elections right now are scheduled for tomorrow morning. Personally, I think it is insane. It would be nuts for us to have leadership elections now and simply reelect the exact same leadership.”

Senator Josh Hawley, who earlier in the week said it’s time to “bury” the old Republican Party and “build something new,” continued that theme Tuesday, stating “I think that this election was the funeral for the Republican Party as we know it. The Republican Party is, as we have known it, is dead. And voters have made that clear.”

Sen. Hawley: “I think that this election was the funeral for the Republican Party as we know it. The Republican Party is, as we have known it, is dead. And voters have made that clear.” pic.twitter.com/wmyOCSYFuz

— Becker News (@NewsBecker) November 15, 2022

The old party is dead. Time to bury it. Build something new

— Josh Hawley (@HawleyMO) November 13, 2022

McConnell appeared to blame ‘MAGA’ Republicans for the failures of the elections, rather than taking any blame himself, further stating “I never predicted a red wave.”

Referring to the party leadership, McConnell stated “I don’t own this job. Anybody in the conference is certainly entitled to challenge me, and I welcome the contest.”

McConnell: “We underperformed among independents and moderates because their impression of many of the people in our party is that they’re involved in chaos, negative, excessive attacks and it frightened independent and moderate Republican voters.” pic.twitter.com/vgcP02OZtT

— Greg Price (@greg_price11) November 15, 2022

*  *  *

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Authored by Charles Hugh Smith via OfTwoMinds blog,

You want to fix the world with finance? Then fix this: wages’ share of a financialized, globalized, speculative-bubble dependent economy have been falling for decades. Fix this and you really will change the world. Anything less changes nothing.

Let’s start by stipulating my perspective on cryptocurrencies is neither positive nor negative in the usual context of “to the moon” or “worthless,” nor does it track any of the conventional narratives (decentralized finance will conquer the world, etc.)

I’ve thought a lot about “money” and its role in the economic-social order, and its role in the extreme asymmetries of wealth-power-income inequalities that are dismantling the social order in broad daylight. I’ve also thought a lot about work and its role in social cohesion, individual fulfillment and a productive, level-playing-field economy.

I’ve written two books on “money” and the potential utility of cryptocurrencies in reversing the extremes of wealth-power inequality that are destabilizing the social order. I invite you to read both books if these topics interest you:

Money and Work Unchained (2017)

A Radically Beneficial World: Automation, Technology and Creating Jobs for All: The Future Belongs to Work That Is Meaningful (2016)

Once you grasp the potential of community-based labor-backed cryptos, you realize cryptos took the greed-soaked path to the Dark Side of a destructive asymmetry of wealth and power: those who issued blockchain cryptos (in all their forms) would become the new Extractive Elite, the new Power Elite, the New Parasitic Elite, buying the wealth generated by the labor of others for peanuts.

Scrape away the high-falutin rhetoric, and blockchain/crypto distills down to the same old greed and avarice that powers traditional finance: those who own the mines gain wealth from the issuance of “money” and its proxy, credit, and those who control the spigots of “money” and credit then buy control of governance, labor and the productive assets that generate real-world wealth.

Whether the “money” is metals that labor extracts to the benefit of the mine owners, cryptos issued to the benefit of miners and insiders, or fiat currencies issued (or borrowed into existence) by central banks and private banks, the principle is the same: the few who control the “money” issuance spigots benefit at the expense of the laboring many.

This is why I say if you don’t change the way money is issued and distributed, you change nothing. Cryptocurrencies–and not necessarily blockchain-based cryptos–have the potential to play a role in fundamentally changing the way “money” is issued and distributed, but this potential has been squandered in the Gold-Rush Greed of speculative schemes which depend on a greater fool volunteering to be the bagholder for an intrinsically utility-free (i.e. of no productive utility) speculative vehicle.

Swapping one set of extractive billionaires for another set of extractive billionaires doesn’t improve the world. Swapping billionaires changes nothing.

As for the much-touted institutional participation: It’s just another greed-driven rush to front-run the next gold rush. The tech bubbles have shown that early adopters mint billions, and so Pavlov’s Institutional Managers all piled into blockchain and crypto schemes, no matter how flimsy and lacking in real-world utility, desperate to secure early equity rounds in what the institutions see as the next gold rush.

The early mine claims got rich, everyone who came later got the shaft. As Mark Twain so entertainingly described, fortunes were made and lost with no relation to the actual prospects of the mining claims being traded.

As for the claims of widespread utility of blockchain and crypto, all the claims are strained. Compare the rapid global distribution of mass produced spectacles lenses from Venice in the 1400s (glasses quickly reached Imperial China) with the supposed utility of blockchain and crypto: truly world-changing innovations that improve human life spread quickly. Where are the blockchain and crypto “innovations” that so improve human life that they’ve spread globally in a few years? There aren’t any.

Scrape away the speculative frenzy, the search for greater fools and the gold-rush mob of greed-driven Pavlovian Institutions, and what’s left? If anything was truly world-changing in terms of improving human life, it would already be tracking the World Wide Web’s expansion, and several billion people would already be using blockchain and crypto utilities due to their vast practical advantages over previous utilities.

The truly world-changing opportunities to improve human life with cryptos don’t enrich the issuers of the currencies or the early investors: they are distributed to those who are performing useful work in their communities rather than speculating.

There are three false assumptions at the heart of blockchain/crypto:

1. We can all get stupidly rich while changing the world for the better. (The Internet model)

2. Blockchain/crypto is “open to everyone” because anyone earning fiat currency can use that to buy crypto.

Getting stupidly rich from being an early investor and front-running speculative bubbles doesn’t change the world. Confusing getting rich with “changing the world” doesn’t change the world.

As for “democratizing finance:” those without capital and no way to save up appreciable capital are left out of speculative assets. The already-wealthy have the means to jump on the bandwagon and so they end up owning the lion’s share of the new hot asset.

In this way, cryptos are no different from all the other asset classes dominated by the already-wealthy. A relative handful of early investors and issuers of cryptos became billionaires, the already-wealthy piled in and the bottom 90% were left to trade high-priced crumbs.

3. Fixing finance will fix the world. Just as those holding hammers see nails that can be pounded down, those steeped in the abstract world of speculation and finance think their expertise in making “money” is all that’s needed to fix whatever is broken in the world.

The reality is that finance has broken the world’s ability to adapt by pushing wealth-power inequality to extremes that are breaking down economies and societies. Finance looks at scarcities–artificially created by cartels and monopolies, or the real-world scarcities of depletion–as “opportunities” for profiteering. Governance and regulation are “opportunities” to distort public policy to benefit the few at the expense of the public good.

This is the ultimate fantasy of financiers of any stripe: I’m gonna do good while getting stupidly rich. But “doing good” quickly slides into the swamp of good intentions and glossy fantasies. The reality is greed and the desire for unearned wealth drives people to arrive to do good and stay to do well.

The reality is financiers hope to “change their world” by getting rich, and it’s easy to cloak this self-interest with noble-sounding goals and claims and persuade oneself that getting rich via speculation will magically ennoble the world. It won’t.

You want to fix the world with finance? Then fix this: wages’ share of a financialized, globalized, speculative-bubble dependent economy have been falling for decades. Fix this and you really will change the world. Anything less changes nothing.

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