Category: Economics Page 1 of 99

Financialization and neoliberalism require everything to be looted so the rich can keep getting richer.

The number of people enrolled in Medicaid and Affordable Care Act plans fell by more than 5 million in the last 12 months, according to a new report from the advocacy group Protect Our Care.

The decline stems in part from President Donald Trump’s “big, beautiful” bill — which was signed into law last July — and the expiration of the enhanced ACA subsidies, the group says. The law includes nearly $1 trillion in Medicaid cuts over 10 years; the subsidies expired in December after Republicans declined to extend them, leading to double- to triple-digit premium increases for millions of people.

This general trend is exactly what I predicted during the debate about the ACA: it would initially help, it would become more expensive over time and it would slowly die from a thousand cuts.

Second:

Using data from the U.S. Department of Agriculture, CBPP, a left-leaning policy organization, found the number of people on SNAP dropped by 6% — or 2.5 million people — from July, when the bill was signed, to December. In Wisconsin, participation fell by 2.3%, which equates to more than 15,500 people.

The post war consensus was to take care of the poor and people who the economy didn’t work for. Every since the 70s, and especially Clinton (with his welfare “reform”) every part of that architecture has been chiseled away. At one time, by law, all medical institutions were not for profit, including health care. That was repealed in the 70s and the predictable result happened.

Not for profit or mutual insurers are much cheaper. One of the few formal acreditations I have is “Fellow of the Life Management Institute”. Despite the name, it includes a lot about annuities and health insurance, and plenty of cites for studies. (Or did back when I took it.) And the studies are clear: for profit insurance is more expensive. This shouldn’t be a surprise, after all, they want to optimize profits, not care.

Cuts to SNAP have been going on for decades, and except during the pandemic all I remember is cuts and restrictions.

If you’re poor, the government will keep offering less and less help. If you require government assistance to live, or live half decently, you’d better find another way, I’m afraid.

This is also true Medicare and Social Security, which have been nibbled to death by constant under-statement of inflation.

Meanwhile the military budget keeps going up, the Pentagon can’t pass an audit, the US is running out of weapons, Ukraine is out of Patriots and being hammered into the ground, Iran is winning against the US and heck, the US couldn’t even with vs. Yemen’s Ansar-Allah.

If America doesn’t have health care because it has a big military, Americans sure aren’t getting their money’s worth.

But because of the Red Queen’s Race that rich are in, where if they don’t get richer at least as fast as other rich, they get bought out and drop out of the game, nothing is off the table when it comes to cuts. After all, those missiles and weapons have MASSIVE markups and high profit margins. SNAP? Helps some farmers, but otherwise no one’s making money off it, and the margins are low. Medicaid, same idea: low margins.

Surely there are wealthy people, or governments, who can earn the rich higher profits than poor people, so fuck them.

This is the West. This is the legacy of neo-liberalism. All because American whites didn’t want to be forced to live in the same neighbourhoods as blacks, so they voted Reagan. (That was the margin of victory, check into it yourself.)

If you’re in trouble in America, don’t cross the kill line, because once you do, no one’s going to help you enough to matter.

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SpaceX’s Rug Pull Is Making Me Laugh

By Ian Welsh

On August 1, 2026

12 Comments

So, SpaceX’s stock is down to $108. It started at $150. It spiked as high as $225. (Hope you didn’t buy it then.)

Ouch.

This was completely predictable, because SpaceX doesn’t have a product worth its MASSIVE valuation. Everything was done to spike SpaceX’s initial offering, including letting it into multiple indices, which means that pension funds and so on were forced, in effect, to buy it.

Meaning your pension fund just took a huge loss.

The key to SpaceX’s valuation, such as it is, is reusable rockets.

But…

The news comes just days after Chinese state-run media showed a Long March 10B rocket booster being caught by an offshore recovery platform, indicating the country was making major strides in catching up with SpaceX’s reusable rocket tech. Over the weekend, an experimental Japanese reusable rocket safely took off and landed, suggesting the nation may be right behind China as well.

Beyond some steepening international space launch competition, experts believe SpaceX’s transformation into an “AI play” may be closely related to its Wall Street woes, as the BBC reports.

“Everyone saw SpaceX as an AI story,” CFRA investment research analyst Keith Snyder told the broadcaster.

“With Elon Musk, any company he touches gets people excited,” he added. “But this was also the first time people felt like they were able to invest in something that was being marketed as an AI play.”

I predicted years ago that Musk didn’t have a moat on reusable rockets. The problem is simple: once the Chinese get a tech, they an always scale much better than competitors, because they have a robust, low priced industrial sector due to actually having competitive markets and useful industrial policy.

As for X being an “AI stock”, well, generally Grok is and has remained by behind most other major AIs in performance benchmarks. There’s no particular reason to believe it’s going to win the AI race, and it’s expensive and closed source, so how it’ll make a profit is unclear to me.

Musk is the world’s greatest conman. Oh, he’s done some important stuff, but it’s been years now since he actually pulled off anything major and real: electrical cars, batteries, reusable rockets are all well in the past. Tesla is only kept alive by the refusal of the US and EU to let much cheaper Chinese EVs into their markets. Spaceship keeps failing. Musk is personally toxic with the sort of people who buy EVs in Europe and the US: liberals and left wingers who believe in climate change.

Anyway, I hope you didn’t buy SpaceX unless you were taking advantage of the rug pull to do a short term trade.

This is just another example of “make the rich, richer” and American delusional belief in their own superiority. Musk is the world’s first trillionaire, but he isn’t going to stay that way.

Just Let the Peons Die, The Rich Must Get Richer, French Edition

By Ian Welsh

On July 31, 2026

13 Comments

Sometimes even I can be sickened by the banality of evil:

The government has decided to cut reimbursements for “heavy users” of healthcare. The purchase of medications and consultations are targeted by this trim. But who is affected? #JT13h

— franceinfo (@franceinfo) July 23, 2026

“Heavy users of healthcare”, aka: the sickest people.

Always it is the weakest who are targeted. Once we taxed the rich to help the poor, now we kill the poor so the rich can afford another vacation property or mega-yacht, or, really, keep up with the Musks.

When the revolution comes, people like Macron need to be charged with mass homicide, and either be executed or sent to prison if (when) they are found guilty.

The West’s rich are in a red-Queen’s race with each other. If you fall behind, you get bought out and even if you still have lots of money, you’re no longer a player in the game. To keep their place in this game they must immiserate everyone else. The other option, to stop playing the game and put in controls over buying out other members of the elite never serious occurs to them.

It’s similar to how carbon taxes are always regressive, rather than massively hitting private jets and private mega-yachts and people with multiple homes. Nope, hit farmers and ordinary people. Certainly don’t really tax oil majors.

The West has only one inviolable rule during this sub-ideological period: the rich must always get richer. Everything else is sacrificed to that goal.

Oilpocalypse Incoming

By Ian Welsh

On July 25, 2026

28 Comments

So, it seems that Ansar-Allah (the Houthis) struck an oil refinery in Jizan, Saudi Arabia. They also took a shot at a refinery in Yanbu, apparently intercepted by a battery the Greeks had there (what?)

Anyway, this is getting real. Between the Ukrainian strikes on Russian refineries, which have been very successful, Iranians hits, and now the Houthis, I don’t see how we avoid serious shortages. It’s the refineries that matter most: crude is worthless without refineries and they’re expensive, take a long time to build and aren’t always easy to repair, depending on what exactly got hit.

I also don’t see how we avoid massive famines and increased food prices in places that don’t have a formal famine. A lot of fertilizer runs from oil thru refineries.

The irony here (conspiracy theorists of elite intentions to depopulate the world, here you go) that Trump confirmed he OK’d the Saudi strike on the Houthi airport which set Ansar-Allah off. They’ve closed the strait and they’re going right for the jugular vein with these refinery strikes. If they keep shooting, the missiles will get thru. The defenders have to be lucky every time, they only have to be lucky on occasion.

Beans and rice. If you need distillates like diesel or motor oil, stock up now. It’s hard to stock up on medicine, but a lot also used petrochemicals, so do what you can: even simple things like aspirin are included.

Anyway, I don’t think Trump is together enough to have a diabolical super villain plan. To the extent he can plan at all, it’s about his next corrupt scam or bribe. But it amounts to the same thing in the end.

It’s hard to overstate how much this will destroy all goodwill for America in the globe. I mean all of it. Everyone knows the US started the war and refuses to stop it, whatever their reasons are. And when people can’t eat, the hatred will be immense. Iran will catch some backlash, but most people get that they’re defending themselves.

Empires end ugly and stupid. The rule of incompetence in late Imperial rulership maintains its record. I expected stupid, but it’s still flabbergasting to witness late Imperial Roman levels of moronitude.

Amazing.

Amazing is not a synonym for good.

Nothing Can Be Done When People Believe Lies

By Ian Welsh

On July 23, 2026

36 Comments

Former CIA Agent John Stockwell on the CIA’s propaganda war on Cuba:

“We pumped dozens of stories about Cuban atrocities…we didn’t know of a single atrocity committed by the Cubans. It was pure false propaganda to create an illusion of communists eating babies for breakfast.”

One of the most fundamental reasons the world is screwed up is that most people believe a bunch of lies. This can be flagrant, like the “drones of death” Iraq supposedly had, ore that Iran killed 50K protestors or that Iraqi troops bayoneted babies in Kuwait.

But it can also be subtle. The generations long understatement of inflation in the consumer price index, for example, means that people lost a third of their actual purchasing power (or more) while the government gaslit them.

Everyone’s walking around talking about stats which have no relation the real world and which predict nothing. It’s like GDP: “Spain’s GDP is about the same as Russia’s.”

So? GDP measures the market value (price) of what your country is spending money on. That’s all. It doesn’t tell you how much industrial capacity they have: how many drones, artillery shells and weapons they can create. Whether or not they can generate their own energy without imports. Whether they can feed themselves. Whether their energy grid could survive mass adoption of air conditioning (hello Britain.) Britain’s water companies added a lot to GDP while flushing sewage into rivers.

American intelligence recently noted that Iran had repaired most of the damage from the first part of the war. But Iran’s GDP is tiny.

Turns out, however, that since they couldn’t buy industrial and construction goods for so long, they became good at making them themselves. Sanctions mean they mostly can’t sell to foreign markets, so they don’t show up much in GDP, but they have the capacity. Meanwhile the US has a massive GDP and takes years to build or repair a bridge that China can fix in weeks or building in months.

We’re swimming in a sea of toxic bullshit. The “facts” our decision-making apparatus uses are often just straight wrong. The population is lied to even more systematically.

If I were writing laws it’d be a mandatory prison sentence for a politician or government official to knowingly lie to the public. No one can make good decisions with bad facts.

Now this isn’t to say that often we do have good facts and do the wrong thing anyway. I’m old enough to remember the doctor shortage in Canada being predicted back in the late 80s, especially the shortage of family physicians. Same with the nurse shortage.

The solution was obvious: train more doctors and nurses. This takes time: more medical school slots, more residencies, etc… But we knew well in advance. We did nothing except think “we can steal doctors and nurses from the third world”, then make it hard for them to work in Canada.

So good facts alone won’t save you. But bad facts make it hard to do the right thing even if you wanted to. Just before the Iraq War over 70% of Americans thought that Iraq was behind 9/11. There is zero evidence of that. There was zero evidence of that back then. But if you believe a lie, you may act on the lie and so Americans supported the war.

For going on 40 years we’ve been making our statistics not reflect reality. This was deliberate, because low inflation stats meant low adjustments to pensions, wages and so on. GDP goes up as the only statistic that mattered concealed that the industrial base was being offshored, which made some people very very rich.

Some people knew the lies were lies, but many didn’t, and the longer the lies continued the more people forgot they were lies.

Till reality (that grocery bill) became impossible to ignore, but compromised stats made it nearly impossible to make the argument to do something.

Lying is a primal sin exactly because it makes even understanding a problem either impossible or much worse. I lie is how we change the world into something fake but better for us. It’s one thing to say “my dog ate my homework”, it’s another for public officials to lie so that some people benefit and others (always a much larger group) suffer. If it was up to me a politician or government official knowingly lying would carry a mandatory prison sentence.

Our “masters” have completely forgotten that democracy is supposed to be about service to the people. Politicians work for the public, not the other way around.

At least in theory. But the further the theory moves from practice, the more politicians act for any reason other than the common weal, the more they need to lie so they can do what they really want. In this era, mint more billionaires.

The complete normalcy of government lies, politely called propaganda, conceals the sort of rot which destroys civilizations, and it’s helping destroy ours.

BLS Alters How It Counts Core PCE Inflation – Guess What Changed?

By Sean Paul Kelley

On July 23, 2026

5 Comments

~by Sean Paul Kelley

From the Seoul Economic Daily:

The overhaul is expected to partly resolve an unusual gap between PCE and the more widely known Consumer Price Index (CPI). The annual core CPI rate in June was 2.6%, while core PCE was estimated at 3.3%. Typically CPI runs slightly above PCE, but recently the two reversed because of software and investment advisory figures. Both items are expected to show smaller increases after the overhaul.

Why the change? Well, “chipflation” was bleeding into software.

The SED continues:

For the software price measurement being revised, the BEA uses the BLS computing cost index. But that figure includes items such as USB flash drives. Their prices have surged amid a spike in demand for artificial intelligence (AI). The result was a distortion in which rising hardware prices were reflected in the software index.

For some reason game consoles are included in the software measurement. As I argued on July 14, these numbers are fraudulent. And this story is pretty solid evidence of that reality.

Manipulating Numbers Rather Than Logistics (Oil Version)

By Ian Welsh

On July 16, 2026

32 Comments

If you’ve been following oil prices since the Iran war started you’ve probably been surprised at how low prices have often been. I certainly was, at first.

The issue is fairly simple: most governments are worried about the price of oil, and not the supply of oil. So they’ve taken various measures to keep prices low. Some of those have been manipulative financial and some of them have been massive releases of oil from reserves.

IEA chief Fatih Birol told Bloomberg that a historic 400-million-barrel emergency release, equal to roughly 2.5 million barrels a day, helped push oil prices down by $20.

The price of oil, though, isn’t really the issue. One part of it is refinery capacity. A fair bit went off line in the Middle East, but ironically, even more in Russia. Why is Russia systematically destroying ever gas station in Ukraine? It’s retaliation for constant hits on Russian refineries.

Marathon Petroleum’s own management flagged on the Q1 earnings call that roughly 6 million barrels per day of global refining capacity is offline, about 6% of the world total. Ukraine’s drone campaign against Russian refineries is the largest single piece, but Middle Eastern facilities inside the Persian Gulf export corridor, and Chinese refiners voluntarily throttling to preserve inventory, add to the shortfall.

As a result Russia is no longer exporting diesel. And even though oil prices are low, gasoline prices are not as low as one would expect, because short refinery capacity means this:

Amusingly the Europeans and Americans have been encouraging Ukraine to hit refineries.

Now you may think “but America is an excess oil producer.”

Yeah, but it doesn’t matter. What matters is refineries and the type of crude oil involved. We aren’t just talking about gasoline, diesel, jet fuel and bunker fuel (ships), we’re talking about fertilizers, sulfuric acid (used for amazing amounts of processes) and so on. This cascades out into medicine (your aspirin for example), packaging, semiconductor production (hey, even higher prices) and whatnot.

But with rare exceptions (hello, China, again) most governments have not managed the actual supply situation.

In a rational economy prices and supply of crucial goods would be managed. For example farmers would get fertilizer and diesel at subsidized prices. Truckers shipping important goods would get subsidized diesel. Drug manufacturers would get guarnteed supplies (though not subsidized in most cases, they make tons of profits, just force them not raise prices.)

Rational governments would say “OK, what parts of the economy are actualy important (food, medicine, transport)?” and act to protect those parts of the economy, and would ration and subsidize those goods.

Instead our elites manipulate the price numbers and make the actual physical situation worse as they do so, by not allowing high prices to lower use and by not allocating key parts of the economy what they need at reasonable prices. Oh, and by releasing absurd amounts from the reserve to manipulate prices rather than using the reserve for actual necessities. They’re so used to an economy where just manipulating prices seems like all you need to do because there’s a global market with surplus. They don’t know how to handle an economy with actual, genuine shortages.

Anyway, as best I can tell if the Strait stays closed we are now weeks to about two months away from actual physical shortages in the first world. (They’ve already hit in the developing world.)

Then the fall harvest comes in and we get terrible numbers from that, and food prices surge.

This is the stupidest war of my entire lifetime and I’m old enough that this includes Vietnam, which was stupid beyond belief, but not one-tenth as moronic as the Iran war. A war of complete choice which the US has lost, won’t admit it has lost and is in danger of running the world into a decade long depression.

If it stops now or soon, it will suck, but we’ll get thru. But if Trump dismantles Iranian infrastructure like he’s threatened (by no means sure, this is Trump, but also not impossible, this is Trump) the Iranians have said they will respond by dismantling Gulf infrastructure: that means refineries that will take years and years to rebuild. Oil fields. Facilities producing helium. A decade of not enough fertilizer.

There is a real goddamn economy and if this happens, a lot of people will DIE due to famines and fuel shortages. Tens of millions. Maybe much more. You can’t just take 20 to 30% of the world’s supply of key resources offline and think “it’ll all be OK, the market will sort it out.”

I mean, the market will, sort of. But along the way will be a LOT of deaths and suffering

If the US had an even remotely operational governing system Trump would be impeached and removed in record time. He’s a fiasco, and he’s one itchy trigger finger away from being a catastrophe.

Everyone Misses Second Largest Drive Of Core Inflation—Memory Chips

By Sean Paul Kelley

On July 14, 2026

17 Comments

~by Sean Paul Kelley

Just about everyone has missed the second largest driver of core inflation (after petroleum) the Fed must reckon with. The insanely high prices and going higher of memory, you know, RAM, DRAM, SDRAM and the like. We’ll call it ‘chipflation.’

Chris Barber, CEO of a Baltimore based firm that helps small companies with IT says:

“RAM chips that sold for $100 six months ago are an “insane” $300 now, so customers may be better off just buying a new computer. “Parts themselves are just completely out of control,” Barber says. “This is the worst increase I’ve ever seen.”

That kind of price rise all but guarantees inflation, even using Fed based hedonics (don’t ask).

And Bloomberg says:

“Software and computer accessories, which usually trend cheaper as technology improves, were up a record 14.5% in May from a year earlier while the cost of electronic components for producers soared 27%. The memory squeeze will add 0.4 percentage point to headline inflation before it eases.”

I think Bloomberg understates how much pressure “chipflation” is going to increase Core PCE inflation.

Take Apple’s recent price hikes. They are 100% due to the increase in the price of memory.

Does the Fed really have a grip? Because “chipflation” will certainly increase in weight in meaesures like Core PCE inflation:

“Technology hardware (such as laptops, phones, and peripherals) historically acted as a deflationary force. Skyrocketing memory costs have reversed this trend. Analysts at Wolfe Research estimate that rising memory and storage costs alone can add noticeable basis points to Core PCE inflation.”

Why has “chipflation” flown so far under the radar at this point? One word: hedonics.

I’ll let Reuters explain:

“Historically, hedonic models accounted for inflation by concluding that if a computer costs the same but processes data twice as fast, the consumer receives an implicit price decrease. Under chipflation, downstream hardware companies (like PC, smartphone, and appliance makers) are choosing to raise prices for devices that offer similar or identical capabilities to previous generations in order to protect margins. This severely slows down the historical trend of increasing “utility per dollar.”

And now this essential model to keepin inflation low is more and more useless. So, the Fed now has to deal with a private credit crisis—deflationary, an energy shock—inflationary and now this inflationary clusterfuck.

Talk about a trifecta!

The horizon is not so far as we can see, but as far as we can imagine

Category: Economics Page 1 of 99

The Continued Abandonment Of America’s Poor

SpaceX’s Rug Pull Is Making Me Laugh

Just Let the Peons Die, The Rich Must Get Richer, French Edition

Oilpocalypse Incoming

Nothing Can Be Done When People Believe Lies

BLS Alters How It Counts Core PCE Inflation – Guess What Changed?

Manipulating Numbers Rather Than Logistics (Oil Version)

Everyone Misses Second Largest Drive Of Core Inflation—Memory Chips