The American economy is a middleman economy, designed around the idea of there being a person or group of persons between the parties of a transaction. No matter how trivial the transaction, there is someone trying to get in on the deal. This middleman brings nothing to the transaction. He adds no value and only facilitates the deal because the rules have been set so that he is required. The middleman is the ever-present silent partner that is the point of the economic arrangements.
If you go back a century, selling a house involved three parties. The seller and buyer, of course, and the government. You had to register the transaction with the government so it was known who held the deed for the property. If there was a lien on the property, then the bank would be involved, but only on one side. Today there are dozens of people involved in the transaction. The government is promising to add dozens more in order to flood stable neighborhoods with magic.
Just about every transaction in the economy now has silent partners. This is why the economy is still a mess due to the Covid lockdowns. Shutting down supply chains was always a dumb idea, but getting them restarted means activating millions of middlemen who have to get paid for the system to work. In a completely financialized economy, nothing moves without money moving first. The money men are the ever-present middlemen in every deal, no matter how small.
The riddle for all human societies since the first settlements was what to do with the people who could not work or would not work. The old and the sick needed care, so they not only were not working, they took someone out of the workforce. This meant that those who did work had to produce extra. It also meant that those who were loafers had to be dealt with so they were not freeloading off the system. Of course, many of the loafers were called the rulers, so that was a problem.
The way out of this problem has been productivity. The farmer who could grow enough food for his family plus the king’s share was never enough. He had to grow enough to feed himself, plus the king and some extra for the king to sell. That way the king could field an army and have a nice castle. Every king wants a better castle, so the drive to produce more with less is a feature of human society. The great ideological wars since the Enlightenment have been about how best to do this.
The claim by communists and capitalists was that eventually, productivity would produce so much that scarcity would be solved. Human society, if planned the right way, would produce so much with so little that want would disappear. That could never happen, of course, but the West has reached the point where everyone has the basics if they want them. In America, poor people are obese because they spend all day eating and watching television in comfortable homes.
That does not mean the problem of economics has been solved. The old free loading problem is still there. Those millions of middlemen baked into the economy are still there, snatching away a little from every transaction. Not only are they skimming from every transaction, they no longer help facilitate the deal. Instead, they often just steal the entire value of the deal. America cannot build a road or bridge, mostly because the money is stolen before the first shovel hits the dirt.
In other words, all of those middlemen are now consuming the host. This army of people involved in every deal are no longer just a weird patina on the economy, but a very serious rot of the system. This is why hedge funds are buying up residential housing to create new renters. The very top of the rentier economy has run out of people from whom to skim, so they are forced to eat their own. The big skimmers are now going after the small skimmers down the ladder from them.
Running a skim is nothing new, but even the mafia understood that you can shear a sheep many times, but you can only skin him once. The modern mafia, the managerial elite, entangled with the powerful, are moving from sheering to skinning. They have busted out everything, so now they are busting out the bust outs. The hedge funds robbing the real estate bandits is like a bank robber robbing drug dealers, in that it says the criminal ecosystem is out of balance.
The story that started with the problem of scarcity has arrived where it started. What is to be done with those who don’t produce? Every society needs an elite and they do not produce in the conventional sense. Their duty is to coordinate. What happens when you have too many people in the elite? Turning them into middlemen seemed like a solution, but now we have too many middlemen. So many in fact that they are now making it impossible for the productive to stay ahead of demand.
The old image of economics is of a group of men pulling a wagon. In the wagon are the unproductive, like rulers and bankers. The goal was to keep the people in the wagon to the barest minimum. The modern wagon is still relatively light, but now the men pulling the wagon are surrounded by an army of people impeding their progress, as they demand a fee for every step. Worse yet, the people in the wagon are creating people who take up positions between the men pulling the wagon.
That has been one lesson of Covid. The reason the economy did not collapse when millions were sent home from their jobs is that most of the people being sent home were not doing anything all that useful. Some were, for sure, but the empty offices went unnoted for a reason. Just as every snowstorm in Washington reveals that vast number of unessential workers, Covid revealed the vast number of middlemen. Many were unaware of their middleman status. They thought they were essential.
Of course, the bizarre fads vomited up by the Cloud People is another sign that we have too many people standing around looking for something to do. Idle hands to the Devil’s work and Old Scratch is spoiled for choice these days. We simply have too many middlemen with time on their hands. The system is overstocked with them, so they sit around dreaming up new ways to horn in on the life of the productive. Now the middlemen have middlemen and that cannot go on forever.
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Elaine’s Idle Mind provides some insight into how it all works:
The East Coast creates value through laws and restrictions that lead to artificial scarcity. Silicon Valley creates value by disintermediating the rent-seekers. The US economy is just a line of people digging up holes and filling them back in.
4
What my grandfather used to call “Chinese labor”
I have no idea where the expression comes from, but actually never tried to find out.
2
It’s endemic in the Third World. Since any shopkeeper has to provide for scads of extended family back home, buying anything involves going through three factotums, four gophers, at least a few guy Fridays, and a manager or two. That’s one reason why there’s no spirit of enterprise in a place like Africa (or African-adjacent) places – start a business, and sixteen friends and cousins and “ministers” and babymommas show up expecting handouts. What’s the point?
3
Very interesting. I wonder then if the Anglo idea of individuality, of breaking off on one’s one, saying by to family to pursue one’s goals, if that ethos both stemmed from and fed into the vitality of the Anglo economy?
Is the individualistic spirit part and parcel of a successful and, for lack of a better term, vibrant economy?
1
I think a lot of this can solve itself by families taking on a more traditional role and men doing the work and women raising the kids.
If all of a sudden women left the workforce, men would obviously end up making more. Not that it would be an offset immediately, but in time.
Plus more white kids. Not bad deal.
We all know the expression, “the face only a mother could love.” Stands to reason, therefore, the more mothers the more love. And we could use more love in our lives.
Aside from that, yes, these middlemen will stand right in the way of our roads and bridges and airports ever being rebuilt. Is an infrastructure deal even possible anymore with all the middlemen and grifters?
9
Yeesh. I got nuthin’. You?
1
I can confirm the presence of middlemen in housing transactions. We refinanced a couple of months ago. I had email or phone communication with five different people at my online lender. It appeared the first one had the primary job of helping the extremely ignorant figure out what they are supposed to do and answer questions like “what is a W-2?” The next person couldn’t answer a question I had, not because she didn’t know the answer, but because she wasn’t licensed to answer it in my state. That meant passing me along to someone else. The process kept moving and was completely timely, but I kept thinking how unnecessary most of it was.
4
When I bought my car, I first dealt with the salesman. Then his manager. Once we had a deal, I talked to a business manager then the service manager and finally an inventory manager. All of these people had forms for me to sign. All of them thought they were an indispensable part of the transaction.
4
Ditto. When I bought my very first car, it was from an old family friend, in cash, on a handshake. I handed him the green, he hands me the pink, and it was done. When I bought my last car, it took four hours, despite the fact that I walked into the lot, pointed at the car, and said “I’ll take that one.” Russian novels have less paper than I was required to sign.
5
Well, the new car sales model, from the dealer’s perspective, is about making money on financing, extended warranty/insurance and service contracts. The dealer makes very little margin on just the car. If you think I’m wrong, walk into a showroom, offer to pay cash and see the reaction you get from the sales manager. The car is just the “life-support system” for the actual money-making product: the financial services related to the car.
2
Check out the closing statement
Perhaps 15 to 20 little add one and tack ons— fee for this, fees for that, escrow gets this, inspector. Etc
Incidentally the most useless guy is the inspector. In my mind at least. They just restate the obvious, it’s, however, women who find them essential. The husband can be pretty handy and inspect the house himself, but no, the wife will demand a professional. What is with women and all these demands for “licensed professionals”. Not just a professional, but licensed ! The word alone really gets them in the mood. I suppose it’s sorta the equivalent of “men in uniform”
Lol. Women. Gotta love them, but they’re positively insane maybe, hmmm, 90% of the time?
4
When we bought the house my impression was the primary purpose of the inspection was to sell us a home warranty. It did give us a couple of things we could go back and haggle with the sellers over, but he missed several others.
3
The home warranty is the other grift
I never understood how a house could be warrantied. It’s like warrantying a person to never get sick
Talking about false sense of security. But I guess I just answered my question. It gives a homebuyer a sense of security. Ahh, how sweet. Let’s cuddle!
I was reading how the the wife makes around 90% of the major purchasing decisions, be it the house or the car. Of course the appliances. When a woman gets a buzzword in her mind, by the way, no way she will ever let it go. Once women heard the phrase “open concept”…. before that “granite countertops”. Oh man lol
2
The Middle Ages used monasteries. I’m kidding, but I’m not really joking. Idle hands naturally turn to virtue signaling. That’s what at least 90% of The Current Year “culture” is – groups of layabouts hectoring other parasites about their insufficient moral purity. We used to cram these people into universities, but higher ed is way past its carrying capacity. The New Monasticism – they can sniff their own farts and bugger each other all day, and let the rest of us get on with life.
6
The difference is monastics added a lot of value while being intentionally secluded from society. Having a bunch of intelligent , communal men with no families and a vow of poverty pool their resources creates some massive wealth. There’s a reason the Vikings chose Monasteries to pillage, and it wasn’t because they hated God.
So yeah, new Monasteries would be a win.
2
It can’t go on forever, and it won’t. Something has got to give eventually, but predicting when is near impossible. The Soviet Politburo never saw their end coming, nor did the CIA. And there are lots of canaries-in-the-coalmine shrieking alarm these days, but my guess is that the collapse will happen fast and be a complete surprise to most everyone when it happens. Here’s the point however. If you enter the collapse with a fatalist attitude and whine for a rescue, then you’re part of the problem. If the enter the collapse with a can-do attitude and roll up your sleeves, you’re part of the solution. And here’s the hard part. During a famine, a lot of people die; some through starvation and some through necessity. And that’s been nature’s natural corrective mechanism for about a billion years.
The collapse IS the cure.
2
Z’s comment about bridges struck a nerve. Here on the Ohio River, the ruling class and safety patrol drones have been palavering for decades about building a replacement for the Brent Spence bridge,a vital piece of infrastructure on a major North/South artery carrying I-75 / I-71 traffic. To toll or not to toll, environmental impacts studies, traffic rerouting, taxes, eminent domain, American or foreign steel, competing designs, blah, blah bloviating blah.
All I know is that the Empire State building was built during the Great Depression in a little over one year in the heart of a already congested metropolis.
Let’s see, greed, lust, gluttony, sloth, envy….why most of the big 7 seem to be in play.
We’ve come a long way, baby.
9
My old man told me when he bought his first house in the 1970’s it was him, the homeowners, and a trip to the bank for a mortgage. So, more or less three people.
When I bought my first house ten years ago it was me, my agent, the seller’s agent, the mortgage rep, the appraiser, the inspector, and five extraneous people who for some reason had to show up at the closing. So a room of about a dozen people were at closing.
They all got pissed off at me at the closing for actually reading the documents during closing, making them all sit still as I looked through them. Sorry, you guys with all the bullsh*t middlemen twiddlling their thumbs isn’t my problem. I’m not signing something I didn’t read.
From what I’ve heard, it’s only gotten more farcical in that time, with brokers turning into outright crooks at the home buyers they represent.
4
Don’t forget “the environmental”
You have to make sure there is no methane leaks from prehistoric times in the soil
And God forbid there is any lead paint!
2
I had the same kind of thought about why Covid didn’t send us into a mega-depression…when 30 million people lose their jobs, and many more under-employed, you’d think that you’d be seeing a lot more poverty and neediness than we are. But at least in my neck of the woods, which is in a red state, and where poverty is higher than normal anyway, throughout 2020 I did not see any signs of economic devastation. (In fact the first time I did notice economic interruptions was this year, with shortages of stuff, caused by lack of workers of all things.)
My own take was that Covid hit the service jobs the most, which is the majority of the workforce, and those jobs were taken up mostly by part-timers, the low-skilled, and immigrants. In other words, people that were never going to amount much to our civilizational energy, and most likely pay no taxes either. Before Covid and during the very long economic expansion after the 2008 crash, I also wondered how in the world our local economies could justify so many restaurants, box stores, gas stations, and other chains. I’m no economist, but how many burger joints, for instance, can a city of 400K handle?
Turns out that all those businesses and service-industry workers were superfluous after all. They were simply dressing on the economy, the kinds of outward appearances that Chamber of Commerce Republicans salivate over. It is amazing how much our economy is full of this kind of fluff, as opposed to meaningful, productive activities.
3
A big cause of the problem was the GI bill after World War II. If it had just trained many new engineers and scientists, great. Instead, it created armies of new sociologists, psychologists, political scientists, economists, liberal arts Ph.D.’s, etc., who plagued the country. The expanded universities are doing the same today, now churning out tens of millions of anti-White fanatics.
2
The proliferation of Middlemen is the logical consequence of a hyper-financialized economy. Once everything is leveraged to the eyeballs, you need an army of “experts” to supervise all the leverage, insurance, warranty etc. because there is no equity in the system to absorb any shocks.
The original goal of mortgage interest deductibility and government-sponsored mortgage programs (Fannie, Freddie, FHA) was to encourage home ownership and stable communities. The expectation was that Harry and Helen Homeowner would eventually pay off the mortgage and help create a good community. Now, nobody really owns anything; the bank owns the house and the buyer puts only 5% down. The “Homeowner” owns an “at-the-money” call option on the home appreciation.
In financial capitalism, everything turns into a casino.