Yves here. As a result of the US’s push over decades to make the world safe for America’s investment bankers, capital flows across borders easily, and some top experts contend, too easily. Carmen Reinhart and Ken Rogoff, in their work on 800 years of financial crises, found that high levels of international capital flows were strongly correlated with more frequent and severe financial crises. In 2011, Claudio Borio and Piti Disyatat published an extremely important analysis of the crisis which shredded the Bernanke “global savings glut” thesis. It instead found that the culprit was excessive financial elasticity, which basically means deregulation and the resulting high level of cross-border capital flows.
Yet the Fed tries to deny the implications of being the steward of the world’s reserve currency in a world of extremely nimble investors who have large pools of funds at their disposal. ZIRP and QE have made the US a major funder of a global carry trade. Remember when global market activity could be summed up by “risk on-risk off” reactions to news? One of the big beneficiaries of “risk on” trades were emerging economies, particularly ones with relatively high domestic interest rates. And when investors got spooked, they’d be the canaries in the coalmine, suffering the most when the tide of money sloshed back to seemingly safer havens.
The Fed’s response to considerable unhappiness of central bankers in the countries that are exposed to the moods of hot capitalists has been to try to deny that the Fed has anything to do with these shifts, or to try to blame the other countries, as in it’s their fault that the money left.
Former IMF Chief economist, now India’s central bank governor Raghuram Rajan took issue with the Fed’s efforts to shift blame in a 2014 Bloomberg interview:
Emerging markets were hurt both by the easy money which flowed into their economies and made it easier to forget about the necessary reforms, the necessary fiscal actions that had to be taken, on top of the fact that emerging markets tried to support global growth by huge fiscal and monetary stimulus across the emerging markets. This easy money, which overlaid already strong fiscal stimulus from these countries. The reason emerging markets were unhappy with this easy money is “This is going to make it difficult for us to do the necessary adjustment.” And the industrial countries at this point said, “What do you want us to do, we have weak economies, we’ll do whatever we need to do. Let the money flow.”
Now when they are withdrawing that money, they are saying, “You complained when it went in. Why should you complain when it went out?” And we complain for the same reason when it goes out as when it goes in: it distorts our economies, and the money coming in made it more difficult for us to do the adjustment we need for the sustainable growth and to prepare for the money going out
International monetary cooperation has broken down. Industrial countries have to play a part in restoring that, and they can’t at this point wash their hands off and say we’ll do what we need to and you do the adjustment. ….Fortunately the IMF has stopped giving this as its mantra, but you hear from the industrial countries: We’ll do what we have to do, the markets will adjust and you can decide what you want to do…. We need better cooperation and unfortunately that’s not been forthcoming so far.
While Rajan does not single out the Fed, it’s clearly the key actor. And his remarks point to an underlying issue: the abject failure of the US to act as a responsible hegemon. On both the military and financial front, America seems to be making things up as it goes along, driven by a toxic mix of bad ideology and domestic priorities. No wonder the rest of the world is so keen to join the Chinese-sponsored Asian Infrastructure Investment Ban. Any means of providing a nexus of power outside the US looks like a step in a better direction.
This post by Joseph Joyce show how recent research confirms the Rajan thesis and discusses the protective measures that emerging economies have tried to take.
By Joseph Joyce. Originally published at Capital Ebbs and Flows and Angry Bear
When the Federal Reserve finally raises its interest rate target, it will be one of the most widely anticipated policy moves since the Fed responded to the global financial crisis. The impact on emerging markets, which have already begun to see reversals of the inflows of capital they received when yields in the U.S. were depressed, has been discussed and analyzed in depth. But the morality tale of errant policymakers being punished for their transgressions may place too much responsibility for downturns on the emerging markets and not enough on the volatile capital flows that can overwhelm their financial markets.
Capital outflows—particularly those large outflows known as “sudden stops”—are often attributed to weak economic “fundamentals,” such as rising fiscal deficits and public debt, and anemic growth rates. Concerns about such flows resulted in the “taper tantrums” of 2013 when then-Federal Reserve Chair Ben Bernanke stated that the Fed would reduce its purchases of assets through its Quantitative Easing program once the domestic employment situation improved. The “fragile five” of Brazil, India, Indonesia, South Africa and Turkey suffered large declines in currency values and domestic asset prices. Their current account deficits and low growth rates were blamed for their vulnerability to capital outflows. There have been subsequent updates of conditions in these countries, with India now seen as in stronger shape because of a declining current account deficit and lower inflation rate, whereas Brazil’s situation has deteriorated for the opposite reasons.
But this assignment of blame is too simplistic. Barry Eichengreen of UC-Berkeley and Poonam Gupta of the World Bank investigated conditions in the emerging markets after Bernanke’s announcement. The countries with largest current account deficits also recorded the largest combination of currency depreciations, reserve losses, and stock market declines. But Eichengreen and Gupta found little evidence that countries with stronger policy fundamentals escaped foreign sector instability. On the other hand, the size of their financial markets as measured by capital inflows in the period before 2013 did contribute to the adverse response to Bernanke’s statement. The co-authors interpreted this result as showing that foreign investors withdrew funds from the financial markets where they could most easily sell assets.
These results are consistent with work done by Manuel R. Agosin of the University of Chile and Franklin Huaita of Peru’s Ministry of Economics and Finance. They reported that the best predictor of a “sudden stop” was a previous capital inflow, or “surge.” Sudden stops are more likely to occur when the capital inflow had consisted largely of portfolio investments and cross-border lending. Moreover, they claimed, capital surges worsen the current account deficits that precede sudden stops (see also here).
Stijn Claessens of the IMF and Swait Ghosh of the World Bank also looked at the impact of capital flows on emerging markets. They found that capital flows to these countries are usually large relative to their domestic financial systems. Capital inflows contribute to the pro-cyclicality of their business cycles by providing funding for increased bank lending, which are dominant in the financial systems of emerging markets. The foreign money also puts pressures on exchange rates and asset prices, and can lead to higher debt ratios. All these lead to buildups in macroeconomic and financial vulnerabilities, which are manifested when there is negative shock, either in the form of a domestic cyclical downturn or a global shock.
What can the emerging market counties do to protect themselves from the effects of volatile capital inflows? Claessens and Ghosh recommend a combination of macroeconomic measures, such as monetary and fiscal tightening; macro prudential policies that include limits on bank credit; and capital flow management measures, i.e., capital controls. However, they point out that the best combination of these policy tools has yet to be ascertained.
Hélène Rey of the London Business School has written about the global financial cycle, which can lead to excessive credit growth that is not aligned with a country’s economic conditions, and subsequent financial booms and busts. The lesson she draws is that in today’s world Mundell’s “trilemma” has become a “dilemma”: “independent monetary policies are possible if and only if the capital account is managed, directly or indirectly, regardless of the exchange-rate regime.”Joshua Aizenman of the University of Southern California, Menzie Chinn of the La Folette School of Public Affairs at the University of Wisconsin-Madison and Hiro Ito of Portland State University, however, report evidence that exchange rate regimes do matter in the international transmission of monetary policies.
Whether or not flexible exchange rates can provide some protection from foreign shocks, the capital controls that have been implemented in recent years will receive a “stress test” once the Federal Reserve does raise its interest rate target. Policymakers will be forced to make difficult decisions regarding exchange rates and monetary policies. Moreover, this tale of financial volatility may have a different moral than the usual one: bad things can happen even to those who follow the rules.
Claessens and Ghosh seem to recommend “antidotes” that are bad for the locals and illegal under the current global trade regime, not to mention unwelcome by the people with all the guns and the covert agents. No one nation can take on global Capital and hope to prevail. This problem will take an alliance of countries, perhaps the BRICs, perhaps a Latin American convention, to deal with.
Value is a measure of something against something else. So we need the Brics like toast needs butter. Really. All money will be nonsense unless there is some dialectic somewhere. I like to think of it as progress.
‘International monetary cooperation has broken down.’
… initiated by none other than the US of A, which unilaterally defaulted (by executive order of R. M. Nixon one random Sunday night: why consult Congress about sh*t that’s actually important?) on its gold exchange obligation in 1971.
Not only is fiat currency ‘backed’ by debt intrinsically a government-sponsored fraud, it introduces a competitive devaluation phenomenon that resembles a bottle full of scorpions all struggling to reach the top of the heap.
Fiat currency under the ‘PhD Econ standard’: total global fail.
Then all currencies are frauds as all currencies are fiat.
The irony is that “competitive devaluation” requires two to tango. I personally rather like fiat currencies. Fiat is a unit of measure and a medium of exchange, and it works great in those roles. Savings should be a completely separate activity from the day to day transactions in the formal monetary economy, not artificially linked to the medium of exchange in some kind of gold/silver/copper/oil/wheat/wool/ELR/JG/etc. standard. In aggregate, the US likes* having foreigners make stuff for us, and the foreigners like* producing more than they consume to allow them to build up savings/capital/reserves/technical knowhow/intellectual capital/whatever word you like.
That’s the beauty of freely floating exchange rates. If Germany or China or Japan or whomever don’t like the dollar being the reserve currency, all they have to do is stop using it(!). Conversely, if the US doesn’t like being the reserve currency and ‘exporting all those high paying manufacturing jobs’, all we have to do is reset the dollar against major items in the physical world, and markets will do the rest, massively increasing the number of hours worked in American manufacturing (for example, stating that the USFG will give any seller in the world $20,000 per ounce of gold, $1,000 per ounce of silver, $500 per barrel of oil, and $50 per pound of copper would dramatically alter the location of global production over time).
Most dollar-denominated financial assets in the world are used as pools of savings money, not transactional money. And most governments actually have a much lower percentage of their monetary reserves in gold than the US does(!) [unless you believe the US is lying through its teeth about its actual gold reserves, but the very act of lying signals something interesting. The US doesn’t claim to have a massive zinc hoard or a massive winter coat hoard or a massive pencil hoard.]
*Of course, this all involves decisions above the pay grade of finance [unless you believe the bankers run the military, I guess], but then, that’s the point, right? This is about geopolitics, the larger system of political economy, not the specifics of monetary policy.
“…the abject failure of the US to act as a responsible hegemon.”
If markets are so wonderful, than we obviously need competition in hegemons…..
The existence of the Soviet Union as alternate hegemon was in fact a great thing. Competition between the political systems ensured global prosperity. The working class and labor politics around the world have been utterly crushed since the wall fell, and it’s not a coincidence.
…if the US doesn’t like being the reserve currency and ‘exporting all those high paying manufacturing jobs’, all we have to do is reset the dollar against major items in the physical world, and markets will do the rest, massively increasing the number of hours worked in American manufacturing.”
I think 60% at least, of Americans want that to happen. So why doesn’t it? To say that countries like Germany, Japan, or the USA are trying to benefit the masses I think is refuted by facts…
If one starts with the premise that the world is run by Davos man, who benefits and who suffers becomes much clearer…
Agreed, that’s the question I wonder too. From the US perspective, I think our leaders/elites/busybodies love the ability to loot the productive economy while exporting the consequences of looting, so as long as the intellectual/professional class continues enabling the looting, the looting will continue. I think even 80% of Americans could support meaningful reform, and as long as the top 20% like their privileges, nothing will change internally.
But globally, that’s what intrigues me. Are the leaders of the other major nations truly on board with DC, or, are they biding their time to build up enough national and regional diplomatic and military capability to withstand a US temper tantrum when they eventually break publicly from the US-led global order?
This is a great post. This phenomenon has been studied for at least a couple decades that I’m aware of, so it’s probably been known by the pros for at least twice that time. We’ve also had some major crisis events to study in detail – notably the mid ’80s Latin America crisis, 1994 Mexican currency crisis and the 1997 Asian crisis. The Big One is soon to come IMHO.
Maybe one reason for all the feigned lack of understanding from the Fed is that the so called “hot money” doesn’t always flow back out so well for the lender. I recall a short study I read of the 1994 Mexican Crisis. Here a major part of the problem was Mexican banks were running amok and out of control making lots of bad loans. At some point our wise banks stepped in and started making loans to the crazy Mexican banks. But our wise banks know when they have someone by the short ones, and the terms were outrageous – IIRC, there was what amounted to a 50% upfront fee, which was part of the loan amount and immediately taken back by the lender. Then a double digit interest rate on top of the entire amount, and of course since the banks are too smart to fall for any other country’s MMT, the loans were denominated in dollars.
Concurrently, the Mexican Central Bank was propping up the Peso by selling dollars and buying pesos, which takes all the fun out of domestic MMT.
Not so unpredictably, it all blew up, and US banks found that they weren’t gonna make a ton of money afterall. ( tho the traders and execs probably got there bonuses out in time) Morgan Stanley was the biggest loser, per the article I read, and courtesy of either the Fed or it’s evil twin, the Treasury, (I forgot which) engineered a stealth bailout, saving MS from bankruptcy.
And the banks lived happily ever after.
An interesting and in-depth study of these inflow/outflow problems is in Michael Pettis’ _The Volatility Machine: Emerging Economics and the Threat of Financial Collapse_. The 1994 Mexico crisis and the late 90s Asian/Thai crisis are covered in detail.
I couldn’t finish the book because I could only get it on inter-library loan for a couple weeks, but it is a nice, not very technical review. A page turner for finance/econ geeks.
It seems to me that there is very little emerging economies can do. Who is going to refuse a capital inflow? It’s hard to do and happens slowly, but once the capital starts to flow out, it’s a tsunami that engulfs the emerging economy. Virtually no amount of central bank ammo can reverse the tide of PO’ed investment banks.
Exchange rate pegs that little countries attempt also seem similar in their futility to battle the big currencies/money. The Swiss eventually had to break their peg because the requirements to maintain the peg simply (IMO) overwhelmed their countries small resources.
Ya, Pettis is very knowledgeable on the subject. Haven’t read the book, but have read lots of his posts.
In the most recent cycle – EM inflows set in motion by Fed QE- the EM finance ministers did a lot of complaining and Berstanke glibly informed them to use “capital controls”. ‘Course then you are free to invent whatever a “capital control” may be. Then everyone has public sector financing and also private sector bank financing – comprised of corporate and consumer borrowing. This does make it a bit tricky because the money doesn’t just funnel into the government and get wisely distributed the way macro-econ books make it sound.
On the way out, it always depresses the local currency, but historically all the government and corporate debt is dollar denominated – so you are earning in weak domestic currency but paying debt service in strong external currency. The result feels like a massive depression inducing debt deflation.
Then the CBs are also supposed to be able to handle currency conversion requests from exiting local currency to dollars.
Fun stuff. Wonder if Ben gets any thankyou notes?
‘International monetary cooperation has broken down.’
“Let’s get together and you give me all your stuff.”
And, as Levy says, the solutions are always “[…] monetary and fiscal tightening; macro prudential policies that include limits on bank credit;[…]”. Funny thing, that. The problem is that local investments are swamped by whimsical investment from outside — the solution, shrink local investments. That’s gotta ? work ?? huh ???
An actual solution has got to be something like “Look out for number one.” Don’t get into intimate relationships with people who don’t give a damn about you. Maintain a countervailing power to make some of that Polyaniesque double movement against actions from the market.
Not that it will be easy. A political reformer says “we must create a League of American Voters[…]”, and while I think he’s right, I have to ask: who is this “we” of whom you speak? Keeping that organization on track will require just the political savvy that’s been eroded away amongst the people. Start with diptherio(?)’s advice from some time back. Get involved locally among yourselves (in the broader sense.) Start from school-board trustee elections …
I find this framing interesting. There is over a three decade long trend now of lower highs on the federal funds rate. What evidence is there that the Fed has the go ahead from the political leadership to significantly increase rates?
ZIRP isn’t temporary. It will be around until our system of political economy changes. The interesting question I think is whether that change will be voluntary reform within our system or involuntarily enforced from the outside.
“Capital controls for everybody!” This ought to be the 99%’s rallying cry the world over, particularly for the so-called ‘developed world’. It would insure that money made in xxx stays in xxx. The elites controlling the nations of “Old Europe” started two world wars over the right to send not just ‘their money’ but their money x whatever degree of leverage the bankers managing it could arrange for themselves and their clients. The US has kept the peace since the end of WWII by arranging a peaceful outlet for all the wealth elites in Europe and the world over have extracted since then from their labouring cattle, Europe’s welfare state socialism notwithstanding. (As we say here in the ‘land of the free’ (wanna buy a bridge?) “Freedom isn’t free.”
The scope of the problem could of course be greatly reduced by actually taxing all the unearned income in the developed world. But for all you “useless eaters” out there wondering what happened to all the wealth our parents and grandparents worked so hard to accumulate (slaughtering indigenous populations, raping and pillaging the planet in the process), the answer is simple – your plutocrats and politicians monetized it and sent it abroad in search of more money and power.
Varoufakis’s ‘global minotaur’ in the form of a voracious US financial-Congressional-military-industrial complex is the price the world’s passive and gullible 99% are apparently willing to pay for ‘peace’.
To read out loud into a cameraI’d start with the “Responsible Hegemon”. China is seeking Hegemony in its area close.
Russia wants its sphere of influence back, and German wants to keep up its exports to Russian markets.
The energy that the money represents had better flow to friends more than enemies. Wherever it is the case it goes to strengthen the enemies or those who are untrustworthy it must be drawn back and put towards strengthening friends.
The hegemony or King’s Realm were from come profits on energy or that value added stuff must Strengthen the borders of concern.
So then this means lead to your friends at fair rates and leave the money to do what it is best to do.
Abraham Lincoln judged that a nation ought be internally strong so much as to not need any other nation for economic activity and security.
If your base is strong then you can extend so it is clear that in the bad times there are after you a common market and defense of all together is required by Treaty.
The first thing the US must do to be a “Responsible Hegemon” is close from all thieves and spies the doors left open to the internet and telecommunications systems.
It is stupid and idiotic to push on the Corporations responsibility for National Defense. There ought be a man by the bull switch at every transfer station in the electric grid.
Defense of the infrastructure of the nation is the national investments and the grid is the most vital. Especially if they use it for the long wage communications with the killer subs, our most lethal weapons and the most lethal of our US competitors.
Extending Internet and Grid Defense to our most trusted trading partners developed or not is a base line Responsible Hegemon’s Move! (Now)
After than the Economies will have good reason to stay in touch closely at times when the H
And this is likely one reason Keynes was championing a a-national bancor currency for international trade.
It would insulate smaller players from the shenanigans of the gorillas.
Sadly it is as likely that the US delegates were wise to this and thus blocked all attempts.
Every country/economy/market has it´s own business-cycle. Smart(foreign) investors knows when to leave or to reduce exposure. As said macro-variables are often the product of capital-(out)flows but I would not say they are necessarily a trigger for major outflows and “sudden stops”. Except for those affecting currency exchange-rates in a bigger way including major political decisions.
Currency-movements/cycles are essential for investors. Never invest against a secular currency-trend.
It is well-known that a relatively small open country isn´t able to protect itself from large inflows. Countries whose government wants foreign investments but maybe lack experience about effects. But they understands capital-controls isn´t a magnet.
So what´s inside the new trade-agreements? Isn´t TTP/TTIP also about protecting the free flow of capital through borders? I have a feeling the US thinks that the biggest investmentboom since the 1920´s is ending and possibly in a dramatic way causing capital-flights that will severely hurt countries. If and when that happens there would be a lot of powers demanding protective measures, i.e capital-controls, that could hurt not only trade but the flow of US (reserve-)dollars around the globe. Are TTP/TTIP an instrument to legally protect todays and future investments due to political measures during and after financial crises? I don´t know but I suspect they can.
Triffin´s dilemma means the US constantly have to inflate the dollar-export but also a constant negative US trade-account(since the mid 70-´s (gold-window -71)). Savings-rates(public and private) are lower and lower meaning capital have to be imported for investments(US Net Investment Position(NIP) negative since at least the 80´s).
The so called “China Savings-Glut” could finance the federal deficit-spending but it was wholesale bankmoney from Europe that i.e financed the subprime-debacle(Borio/Disyatat).
I clearly see the biggest dollar-short(mostly China/Asian debts) ever today($9 Trillion) which probably could set off a dollar-explosion to the upside. The final trigger? Could be sovereign-debts defaults(euro/yen/(sterling/dollar))! The results would be catastrophic not only for US export. With extreme low interest-rates dollar-inflows(safehaven) could start the next real stockmarket-bubble(1929 or 1987 again) and also the next Plaza Accord 2.0. The US demanding i.e China, Japan, Europe to revalue! Would such a scenario be the end of the dollar-regime and a start of a new international reserve-system? Bancor or basket incl /Gold/SDR/Renminbi! Not impossible.
If we are going for the Big Crunch in the next years or so the implication of big currency-movements and credit-defaults could be the next level of trade wars. Not to mention the Russian force-feedback when commodity-prices falls of the cliffs in a dollar-surge. Would trade-agreements matter then?
I’ve been reading NC for 2 years now, and I am grateful for all the work you put in. But, You do realize that this article (and other ‘deep fiancial’ articles on NC) makes zero sense to anyone without a degree in fiance , right? The NC editors are obviously working very hard to spread awareness of financial problems, provide an alternative to the MSM, and to try to change the system. But how can you change the system without the general public on your side, and how can you get the general public on your side when you make no effort to explain stuff in plain English? It makes me a little sad to see you spending so much time and effort on stuff that does not reach the people it needs to reach. TL;DR if you’re smart enough to understand/write this article, you should be smart enough to summarize it for a general audience.
This site is not written for the general public. This site is written for people who have an basic understanding of economics. We step the finance down an notch or two and policy people, who are also generalists and seldom experts in finance, do understand what we write.
It would take a great deal more work that you suggest to step down the explanation as far as you suggest, and we’d lose the interest of more sophisticated readers. And the ones who are interested in moving policy and already committed to that end are down the curve enough to use information like this to advance the ball.
In other words, if you want to understand material like this, you will have to do some work. We can’t do it for you.
Can someone provide a good introductory reference into the following subjects:
1. The Basics of Banking; Money creation
2. The Basics of Balance of Payments, Capital Flows, Current Accounts
I have asked a couple of profs. I can recommend the latest paper by the Bank of England on money creation, but it is more at the intermediate level rather than basic: http://www.bankofengland.co.uk/research/Documents/workingpapers/2015/wp529.pdf
If you come back in a day or two, I should have some better answers. Thanks for asking.
“The Encyclopedia of Central Banking” – provides definitive and comprehensive encylopedic coverage on central banking and monetary theory and policy. Containing close to 200 entries from specially commissioned experts in their fields, elements of past and current monetary policies are described and a critical assessment of central bank practices is presented. Since the financial crisis of 2007, all major central banks have intervened to avert the collapse of the global economy, bringing monetary policy to the forefront. Rochon and Rossi give an up to date, critical understanding of central banking, at both theoretical and policy-oriented levels. This Encyclopedia explains the complexity of monetary-policy interventions, their conceptual and institutional frameworks, and their own limits and drawbacks. The reader is provided with the body of knowledge necessary to understand central banks’ decisions in the aftermath of the global financial crisis and controversial explanations of the crisis are illuminated from a historical perspective. Academics and students of economics will find this an indispensible reference tool, offering current and necessary insight into central banking and monetary policy. Practitioners in the financial sector will also benefit from this refreshed insight into this fundamental topic.
Edited by Louis-Philippe Rochon, Edited by Sergio Rossi
Skippy…. the price point is not as prohibitive in E-book form imo.
“Since the financial crisis of 2007, all major central banks have intervened to avert the collapse of the global economy”
Let’s scratch “global economy” and replace with “global banking system”‘.
‘Tis also good to remember that subprime mortgage paper (the official culprit) totaled about $300B, IIRC, and the global economy was about $60 Trillion. So those were some powerful butterfly wings on Wall Street to make all that damage happen. Lately I’ve seen people kick around the total global figure for QE. Not sure I remember this correctly – I think they said somewhere in the 20 something Trillion $ range. So I sincerely hope they found where all the subprime mortgage paper was hiding :) If they missed it, then I’d have to say the last 6 years have just been a big banker party.
Yeah Mosler mob put it around 24T if memory serves, tho the problem is much larger than RMBS, as Yves et al note, that just made the topic of Credit Risk dramas approachable in polite company.
Never the less the global banking system [payment system] is the intermediary to all transactions at some point in space or time. To me the SDR thingy is getting quite large on the horizon, up to geopolitics e.g. how much is happening just over that percentage in having a say in the top tier exchange metric, and they say prices are sticky…. lolz….
This actually is one of the greatest developments of the Internet, the widespread dissemination of basic concepts. In addition to the scholarly sources, you can learn a lot at a summary/intro level just at the very most basic resources like Wikipedia, Investopedia, and QuickMBA.
I for one am quite grateful Yves et al (Lambert, Dayen, etc.) wade into the weeds of finance. That is a fantastic service for those of us casually interested in this topic generally but who don’t spend our ‘day job’ doing that.
I’d also offer a different interpretation of change. It is not going to come from the general public. The general public already has little invested in our existing financial system and little regard for the politicians, economists, lawyers, journalists, bankers, doctors, and other professionals that run it.
What has to change is the attitudes and comforts of the gatekeepers, the technocrats, the intellectuals enabling the system. Unmasking the con requires a bit of exploration of the particulars. They are the target – the people who need us to think that they are god’s gift to the planet to satisfy their various pathologies and insecurities.
Laughing at them most heartily requires some detailed knowledge of the specifics.