Bifurcation Nation and the TINA Economy's Freefall
Posted by freedomforall 1 day ago to Economics
Excerpt:
"The term “The K-Shaped Economy” has entered the lexicon to describe the divergence of the top tier of earners and owners of capital from the lower tiers, as the trajectory of the first is up and that of the second is down.
While the “The K-Shaped Economy” offers visual clarity, it’s ultimately an abstraction. Longtime correspondent Harvey D. recently offered a more accurate term, The Bifurcation Economy, which describes (as he put it) the reality that 50 miles outside major US cities, the precarity and quality of life is Third World. I modified his term to Bifurcation Nation, to express that the widening divide isn’t just financial, it describes everything from healthcare to social / political power.
I’ve assembled a few charts to illustrate the range of this Bifurcation between the top tier and the rest.
Here is the S&P 500 (SPX) stock market index, representing the wealth of corporations and the top 10% who own their shares, rising at a 45-degree angle, and consumer sentiment, representing the real-world economy, sliding down a 45-degree angle.
...
One causal force that receives little attention is what I’m calling “The TINA Economy”: there is no alternative when it comes to paying higher prices for essentials and taxes, and so the share of income left to spend on what’s still a choice shrinks.
Everything that is necessary to participate in the economy at a level above abject poverty is concentrated in monopolies and cartels who use their control of production, supply chain and the politically geared regulatory structure to set what’s available on the market and what isn’t, and to raise prices and degrade quality and quantity to increase profits not by offering competitive advantages but by TINA coercion.
As the essentials go up in price, the sum of household income left to spend elsewhere (discretionary income) declines. The sectors of the economy that depend on discretionary spending are the only parts of the economy with any real competition: dining out, entertainment, leisure and travel, aspirational / status-enhancing spending, etc.
Many of these sectors are dominated by a handful of corporations: pizza chains, travel sites, airlines, short-term vacation rentals, rideshare services, hotels and resorts, and so on.
The sectors of the economy that aren’t yet dominated by cartels and quasi-monopolies--the small businesses that depend on discretionary spending--are the bricks and mortar enterprises that give towns, neighborhoods and cities their character and desirable quality of life."
"The term “The K-Shaped Economy” has entered the lexicon to describe the divergence of the top tier of earners and owners of capital from the lower tiers, as the trajectory of the first is up and that of the second is down.
While the “The K-Shaped Economy” offers visual clarity, it’s ultimately an abstraction. Longtime correspondent Harvey D. recently offered a more accurate term, The Bifurcation Economy, which describes (as he put it) the reality that 50 miles outside major US cities, the precarity and quality of life is Third World. I modified his term to Bifurcation Nation, to express that the widening divide isn’t just financial, it describes everything from healthcare to social / political power.
I’ve assembled a few charts to illustrate the range of this Bifurcation between the top tier and the rest.
Here is the S&P 500 (SPX) stock market index, representing the wealth of corporations and the top 10% who own their shares, rising at a 45-degree angle, and consumer sentiment, representing the real-world economy, sliding down a 45-degree angle.
...
One causal force that receives little attention is what I’m calling “The TINA Economy”: there is no alternative when it comes to paying higher prices for essentials and taxes, and so the share of income left to spend on what’s still a choice shrinks.
Everything that is necessary to participate in the economy at a level above abject poverty is concentrated in monopolies and cartels who use their control of production, supply chain and the politically geared regulatory structure to set what’s available on the market and what isn’t, and to raise prices and degrade quality and quantity to increase profits not by offering competitive advantages but by TINA coercion.
As the essentials go up in price, the sum of household income left to spend elsewhere (discretionary income) declines. The sectors of the economy that depend on discretionary spending are the only parts of the economy with any real competition: dining out, entertainment, leisure and travel, aspirational / status-enhancing spending, etc.
Many of these sectors are dominated by a handful of corporations: pizza chains, travel sites, airlines, short-term vacation rentals, rideshare services, hotels and resorts, and so on.
The sectors of the economy that aren’t yet dominated by cartels and quasi-monopolies--the small businesses that depend on discretionary spending--are the bricks and mortar enterprises that give towns, neighborhoods and cities their character and desirable quality of life."
That is the goal of the banking cartel (who can create funding for said debt at zero cost and zero investment.)
Sounds exactly like the health care system.
Health insurance to a great extent only covers palliative care/ treating symptoms and the health care 'industry' doesn't provide any cure to anything.
QED: Patients will never be healthy, only enslaved to buy drugs (and pay for "health insurance") for the symptoms for life.
Good article, FFA, thanks for posting it.
Side note on the banksters cut in all this: My wife just got an ad in the mail for a credit card promising no annual fee and 0% interest for a year. Then the fine print says yearly interest will be 26.6% !!! Really? The ad went to the shredder for us, but some poor family just starting out might think it's a great deal for outfitting their new apartment or home. Chalking up $10k of charges is easy to do, but coughing up the roughly $2.6k a year later in interest is not so easy. They will NEVER get out of debt.