Dead Money

Nellie Bowles at Bari Weiss's The Free Press recently shared this nugget:

We have a dangerous oversupply of History PhDs: America’s graduate schools are hellbent on making thousands of unemployed people fated to wander the country reminding us that they have PhDs and that we should call them “doctor.” From Inside Higher Ed: “Between 2019 and 2020, 1,799 historians earned their PhDs, and only 175 of them are now employed as full-time faculty members.” What are the 1,624 remainders doing? Mostly screaming on Twitter, I guess? Cornering people at otherwise normal dinners to explain how their thesis shows mid-century modern furniture is homophobic?

Snark aside, they are part of a growing segment of the populace that's killing productive capital.

In brief: Dead money.

Ponder a small business owner who sells thingamabobs. He has ten employees dedicated to the production, sale, and distribution of those thingamabobs. All ten do stuff relevant to getting the thingamabobs to where someone pays the company money, whether it be making them, packaging them, transporting them, maintaining the thingamabob-building space and machines, and so forth.

The business owner has more than those employees, however. There's a long list of rules, regulations, requirements, and demands imposed by those with the power to impose that he must devote resources to comply with or otherwise fulfill. Resources, as in time, space, or money; as in employees, contractors, or service providers who aren’t putting their time and effort into making thingamabobs.

None of those resources benefit the efficiency of his thingamabob-making/selling business. In fact, they do the opposite. They're drags on that efficiency. They have to come from the productive part of the business. Instead of ten employees, he may need twelve. Instead of charging X per unit, he may have to charge ten percent more. That ten percent is money that won't get used for productive purposes, such as buying other stuff the consumer may consider utile, or putting it into the banking system (i.e. saving it) where it will serve as someone else's productive capital.

These are the inefficiencies introduced by government into the economy. They slow economic growth, and therefore slow the improvement in our living standards. We accept that some such are part of life, and some serve to address certain realities. Basic rules regarding waste disposal, for example, serve public health.

But, it's obvious to anyone who looks that we are over-regulated, over-restricted, and micro-managed by people who have no skin in the game, who suffer no cost for imposing those inefficiencies, and who don't care one whit about the damage their excesses impose on the rest of us. All that's spent on such is dead money.

Now, consider the aforementioned history PhDs. The market has spoken. 175 of 1799 newly-minted PhDs got about the only job a history PhD is good for: creating more history PhDs. Yet, because there's a twisted and distorted system of college financing (loans backstopped by the government, which means the lenders bear no risk and therefore have no reason to question borrowers' choices), we have all these overeducated idlers.

Progressive society doesn't like the notion of such favored sons and daughters of the higher education industry being relegated to data entry or burger flipping, so "make-work" jobs have emerged that serve its ends while assigning esteem and status to jobs that are actually less useful than flipping burgers, both in government and in industry. DEI and its kin have created countless jobs in countless departments in countless companies, and that's before we even start to count those on the government side of the fence.

How much productivity do these jobs create? How much useful capital do they turn into nothing?

Dead money.

Next up, the service on our national debt. Service that, as the Fed pumps up interest rates to try and tame the inflation that massive excess government spending created, becomes more and more expensive. And, service that every new year of deficit spending adds to.

All this debt service, taken from tax collections, is dead money. It's little different than paying credit card interest on that shiny new coffee maker. In fairly short time, if you only service the debt rather than paying down principal, that which you bought for fifty bucks becomes a $70, or $80, or $200 outlay. You didn't get more than $50 worth of coffee maker, and you lost the opportunity to buy other useful stuff with the interest you laid out. America's debt addiction is a ticking time bomb, with the ticker getting closer and closer to BOOM. The projections are horrifying, but none of our dear leaders seem to care (they'll all be retired or dead soon, so...).

If you're not already depressed, ponder all the money put into idle pockets by the government. This money is either taken out of the productive economy by taxation, borrowed from whomever, or printed into existence. Some might be fooled into thinking that it remains productive, because someone will buy a coffee maker with it, but that money isn't wealth created by human productivity. It's the opposite. The recipient didn't trade something of value for that money. Instead, that money is not given an opportunity to be used to productive ends (e.g. paying someone to make a thingamabobs, building a machine that makes thingamabobs more efficienty, investing in a building within which to make more thingamabobs if the demand for them is high enough).

Dead money.

Our government and our society are finding more and more ways to deaden money, to kill productivity, to parasitically burden the wealth-generating economy. Human ingenuity in the form of increased productivity (new ideas, better ways to do stuff, better mousetraps, innovation, entrepreneurship, invention, and so forth) has managed to keep us ahead of all this parasitism, but first, imagine how much further along we'd be with less of it, and then ponder that if the wave you're outrunning gets bigger and faster than you, it'll eventually catch and drown you.

Inflation, the worst thing that can happen to a nation, can go from trickle to deluge in a relative instant, and no amount of Fed economy-squeezing can stanch that deluge when it hits. All this dead money, and its continued growth, are setting America up for a rapid fall.

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