Is the American Dream Dead?

Good morning.

There is a lot going on in the world on so many levels. I whole heartedly endorse the concept of taking regular breaks from the “news” and especially from social media… no irony there in posting that comment on social media is there?

Is the American dream really dead? I don’t think so, but 75% do! 75%? Really? Why?

There are so many factors in our society and economy that make it impossible to distill it down to a short read, but here are a few thoughts from me and Mr. Mauldin.

John Mauldin: “We really have two employment challenges. Providing an adequate number of jobs at adequate wages is only the first part. We also need the labor force to believe that having a job will make their lives better than the alternatives like relying on crime, family, friends, and/or government aid.”

I have been saying that the FOMC dual mandates (maximum employment and price stability- 1978 Humphrey-Hawkins Full Employment Act) and looking in the rear-view mirror of data to drive forward is a recipe for bad decisions. Another soap box item is they go too far, start too late and stay too long on rate decisions in both directions.

Back to John Mauldin for a conclusion: “I am growing more and more convinced that we simply can’t rely on historical precedents anymore. Economics is about human decisions, and humans, at least in a broad sense, seem to be making decisions differently than they did before the pandemic. I think we don’t fully understand how much has changed—for employment, inflation, consumer behavior, and more.

This level of anxiety plays out into every aspect of society. If you are anxious about the future and have been taught in school that capitalism has serious flaws; if you are concerned about your future; if you see the wealth and income disparity; it becomes easier to advocate for a more socialist society where government takes responsibility rather than free markets. This of course will produce tensions in the political realm.

This all feeds into what I feel is the coming crisis, The Great Reset, a combination of Neil Howe’s The Fourth Turning, Peter Turchin’s overproduction of elites, George Friedman’s prediction of global conflict, Ray Dalio’s business and economic cycles, and my own view of the precipitating crisis of not just US but global sovereign debt which will trigger The Great Reset.

If we don’t understand what is happening, it’s hard to do anything about it. I don’t envy the FOMC members. They’re making enormously consequential decisions while partially blinded. We should all hope they somehow make good ones.”

Hope is one option and prayer is another. I encourage both!

If you have never heard of John Mauldin or have not read him on a regular basis, I encourage you to subscribe to his weekly letter: The Frontline:

https://www.mauldineconomics.com/manage-email-preference