There are two distinct groups of Economic Losers who supported Trump...and still do.


Now we know.  There are two groups of economic losers who supported Donald Trump, and who support him still.  There are remarkable differences between the two, however.

The first group, described as working-class folks, reside predominantly in economically blighted counties.  According to Brookings, the counties where Donald Trump beat Joe Biden contribute less than 30 percent to the production of America’s total output.  The balance of 70 percent?  Those are the counties where Joe Biden prevailed.

Imagine.  Counties won by Donald Trump produce less than one-third of America’s GDP.  Compared with Blues, Red counties tend to be older, whiter and less educated.  Their workers tend to cluster in jobs within static or declining industries, especially agriculture, mining and extraction, and traditional manufacturing.


The poor and undereducated are not more likely to join extremist movements, according to experts.  Indeed, the second group is distinguished from the first, this way.  Its members are more conventionally middle class.  Many are economically fragile, however.  Many have tasted middle class lifestyles, then later found themselves marginalized by shifting economic realities, unpaid debts, bankruptcies and the like.

This brings us to the January 6 insurrectionists.  According to Todd Frankel of the Washington Post, a huge percentage of people facing charges stemming from the insurrection showed signs early on, of having been economic winners, but then more recently, having shifted into the ranks of economic losers.  Their anger borne of humiliation and resentment, bare some connection to their participation in the insurrection, it appears.


Researchers are now piecing together possible links between economic calamity and motivations for the attack.  Nearly 60 percent of those facing criminal charges have exhibited money difficulties including bankruptcies, evictions, and unpaid debts and unpaid taxes, based upon The Post’s public records analysis of 125 of the defendants.  Bankruptcy, at 18 percent for this group, is nearly twice as high as the national average, Frankel reports.  A quarter have been sued for failure to pay a creditor. And 1 in 5 have faced losing their home, according to court filings.

Does this explain, at least in part, why many small business owners and some with professional careers—and few with prior violent criminal histories — were willing to participate in an attack egged on by the president’s rhetoric that painted him and his supporters as undeserving victims?  It does.  Fear of falling out of the middle class appears to be a huge motivator.

According to American University professor Cynthia Miller-Idriss who studies extremism, insurgents may harbor deep-seated feelings of precarity about their personal situation, combined with a sense of betrayal or anger that something is being taken away from them.  “These are people who feel like they’ve lost something,” Miller-Idriss told Frankel.  “They know it can be lost. They have that history — and then someone comes along and tells you this election has been stolen,” she says. “It taps into the same thing.”

It was difficult for them to ignore during the Trump presidency, that the America they thought they knew and loved appeared to be going away, and therefore they’re going to protect it, observes Donald Haider-Markel of the University of Kansas. “They feel, at a minimum, that they’re under threat,” he told Frankel.  “Somehow, they’ve been wronged, they’ve developed a grievance, and they tend to connect that to some broader ideology.”


In his latest book, Harvard political philosopher Michael Sandel spells out the consequences.  The politics of humiliation is at the heart of Trump’s appeal, he observes.

In conversation with New York Times columnist Thomas Friedman, Sandel noted “Trump was elected by tapping a wellspring of anxieties, frustrations and legitimate grievances to which mainstream parties had no compelling answer.”  These are moral and cultural, he observes. “They are not only about wages and jobs but also about social esteem.”

~Jim Sawyer


Macroeconomic Thinking 2021 - What will Biden do?

Stan Brewer watched over Ogden’s Dinner Horn Market, as its proprietor.  He also served as a community leader, not unlike Mitt Romney, during his sojourn in Boston, as its Mormon Stake President, and later as the Massachusetts Governor.

Mostly, Buss and his parents loathed Mormon dignitaries, describing them as power-hungry authoritarians.  Brewer and a few others were exceptions, however.  One was a community icon who advanced to become President of the Mormon Church.  In his early years as leader of Ogden’s fledgling Weber State University, David McKay defied an exclusionary Mormon practice and traded with George Sawyer, an outsider.  McKay’s actions were remarkable, then.  George was a non-Mormon from Texas who ran a butcher shop out of a converted coal shed.

Always though, it was Stan Brewer who stood atop George and Nora’s “good guy” list.  So what explained Brewer’s magic?  What made him unique in that time and place?

Truth be told, there was no magic to Stan Brewer.  He was a “real” person; someone both pliable and also a respecter of those he encountered.  Indeed, what drew George and Nora to Brewer was his avoidance of the pseudo-realities driving many of his orthodox Mormon contemporaries.  Stan Brewer was a man for all seasons.


So, a question percolates up from my paternal grandparents’ struggles, as they made their way as strangers in what for them was a very strange land.  What could it mean now, to function as a Mitt Romney or a David McKay or a Stan Brewer, way back then?  In a contemporary sense, how might we grasp when someone is dedicating one’s self to living as a person for all seasons?

Here’s what I conclude.  A person for all seasons accepts the way in which the world evolves and has come to work, rather than to persist dogmatically, in attempts to stuff reality into an outdated “straight-jacket” of preconceived beliefs.  Believing isn’t knowing, of course.

Here, I draw upon my perceptions of Stan Brewer’s world view.  How might it be applied now, to economics, my specialty?  Economics, at least it’s macro aspects, is not unlike politics or religion.  It rests atop doctrinal propositions about how the world is perceived to work.  At a paradigm’s birthing, its results may be compelling.  Over time however, outcomes may become lackluster and dated.  Ultimately, any particular paradigm is likely to be replaced, politically.

When beliefs collide with reality then, a person for all seasons would retain pliability.  They would continue to evolve amid uncertainty, discomfort, and even fear.  And they would commit to moving on, to “the next right thing to do.”

The economic world changes and evolves, therefore belief-based economic thinking must evolve to stay apace.  Timing is crucial of course.  Mortals, as poets observe, adjust not only to an appointed time to enter, but a time to exit as well.  So it is with macroeconomics.  There’s a time to blossom, a time to wither, and a time to be reborn in some way, into the next paradigm iteration.


I’m focusing of course, upon transitions among macro paradigms.  What I’m doing also, is to focus on what it means to be a person for all seasons; what it means to endure when aspects of one’s belief system become swept into the dustbin of emerging political reality.

All told, there have been three major macroeconomic paradigms and three crucial transitions.  Even now, we may be entering a fourth.  In order, we look at laissez-faire (1776-1929), then Keynes’ fiscalism (1929-1980), and  then Reagan monetarism (1980-2020).  Regarding what might come next in 2021, perhaps, will it become known as Biden-nomics?

Here then, we’re taking an abbreviated look at each paradigm’s raison d’etre, its major economic programs, and finally, its political death.


Laissez-Faire came into being as the feudal system was segueing into capitalism, described by Adam Smith in 1776.  Capitalism’s programs of course, were no public programs at all.  It harbored a certain contempt for any form of government intervention.  Instead, free-market economics championed “hands off” by government, along with an individual’s right to hold private property.

Ultimately, after one and a half centuries of successful dominance, laissez-faire came to crisis during a bubble economy (involving rampant land speculation) accompanied by the excesses of an unregulated banking system, and by an unaccommodating public philosophy that heaped contempt upon any public form of market oversight, or any intervention to get a stalled economy moving again.


Laissez-faire’s successor was Fiscal Keynesianism.  It emerged in the 1930’s, named after English economist JM Keynes, and was pragmatically energized by President Franklin Roosevelt.  FDR’s programs included bank regulation, but most of all, demand stimulation through public employment programs. This stimulation helped to stoke household spending with private businesses, and subsequently, that drove renewal of business investment.

Keynesianism began to wane however, commensurate with the Vietnam War.  The rate of growth slowed, even as its underlying rate of inflation accelerated.  Advocates grew increasingly unable or unwilling to manage compromise, and Ronald Reagan’s political and economic philosophy seized the day, in the Presidential election of 1980.


Reaganomics rejected fiscal policy, except for ample tax cuts of course, conferred especially upon the well-to-do.  Supply-side advocates asserted that investment growth would spring from policies to stimulate saving and therefore investment, as opposed to Keynesian policies to stoke household spending, as investment’s precursor.  Since poorer Americans save comparatively little, Reagan’s programs rewarded those already “in the money.”

Ultimately however, growth slowed as exploding financialization created distributional inequities, and politically motivated tax cuts further expanded those inequalities.  Frauds intensified, a bold new class of tax-avoiders and government-haters emerged, and a dark underbelly of pseudo-capitalism, exploded.

One wonders then.  What paradigm might come next?  How might we evolve our macroeconomic thinking in 2021?  If you were Joe Biden, what might you propose?

~ Jim Sawyer


Belief isn't Knowing


Buss hated Mormons.  Father had some Mormon friends, though.  More precisely, Buss hated the Mormon Church.  He wore a Masonic ring, proclaiming subtly, he told me confidentially, members of his Illinois brotherhood murdered Joseph Smith, Mormonism’s founder, in a hail of gunfire at the jail in Carthage on June 27, 1844.

Joseph’s crime, according to Buss?  Smith fraudulently expropriated Masonic rituals he said, then converted them to become the Mormon temple ceremony.  Masonic rituals were never intended to be revealed outside of the Order, nor turned into religion, he remonstrated.

How anomalous then, Buss is buried in mother’s family plot in the Morgan Cemetery, on a hillside above her childhood home.  Incongruously, he loved Melba’s hometown.  The hillside overlooks the Union Pacific Railroad, the Weber River and I-84, as these snake through the canyon.  Amid stints as an erstwhile entrepreneur, Buss was a UP brakeman.  Even in days before diesel power, he guided freight trains on their essential journeys.  From this spot, he relished iconic vistas of huge steam engines, belching smoke, hauling loads of West Coast freight up the treacherous canyon, then onward, toward the East.


Regarding what his “take” might have been on Donald Trump, I’ll make a calculated guess.  If Buss had been living amid this presidential election cycle, he would have backed numerous MAGA claims, perhaps even baseless claims of “Stop the Steal.”  But he would have stopped short of support for Trump’s attempted coup d’état, in part because of a stain handed down from a prior generation.  Buss’s great-grandfather co-led an insurrection against the United States government in 1835, known as New Hampshire’s Indian Stream War.

Contrary to my somewhat-edgy Sawyer lineage, mother’s forebearers were mellow Scots, comparatively.  Melba’s father Charles, modeled integrity throughout his distinguished career in government.  Even though a child of polygamous parents, he became a public servant to all, not only to those with Mormon pedigrees.  Charles aligned first with what is known, and not with what is merely believed.

Charles Ephraim Condie served as school master, county attorney, and water commissioner for the arterial Weber and Ogden rivers.  For two decades, he chaired the Morgan County Republican Party.  But during America’s Progressive Movement, around the First World War, he took an important job at the Utah State Capitol, and never looked back.  Democratic Governor Simon Bamberger was moving Utah in a cosmopolitan direction, toward Progressive Era reforms.  Even beyond Bamberger’s liberal-leaning politics, it’s significant also, he served Utah as a non-Mormon and also as the second Jewish governor in American history.


As with Governor Bamberger, Charles Condie believed in public engagement, and he believed in the importance of the places where public engagement occurs, in city halls, public schools and the like.  These are where citizens meet to resolve differences and to set the course of public life.

It wasn’t always so in Utah, however.  Its predecessor, the theocratic Republic of Deseret, was absorbed when Utah joined the Union in 1896, about the time Charles and Georgiana started their family.  Under that old system, Mormons were encouraged to submit disputes for resolution by the local bishop, rather than to seek adjudication through democratic process.  Doing so unfairly excluded non-Mormons, of course.  Charles would have steered around such parochial expropriations of democratic rights, even though for some orthodox Mormons, vestiges of the old ways remained for years.

In the democratic system Charles championed, neutral civic spaces became the spaces in which democracy was conferred, practically, upon all citizens.  To that end, he was a respecter of all those he served.  Tragically, civic respect is strained, practically to the breaking point, in the Internet’s advent, as it becomes the newest public space, used too often for virulent public discourse.

In all public spaces, Internet included, integrity requires participants to self-identify as believers, not knowers, whenever one’s subject is merely believed, but not known.  If you’re merely a believer, as I asserted in a prior Carpe Diem post, your lack of knowing ought to be acknowledged publicly, whenever you place your beliefs on public display.

Do you know which you are?  Knower or believer?  It varies of course, with the proposition encountered.  Is your favored proposition, one with a basis in verifiable knowledge?  Or instead, do you assert it as reality although it can be defended by little more than belief?

It’s crucial.  For all of us.  Confusion between when we know and when we don’t, stokes debilitating fires of culture warfare.  It is warfare based too often upon conspiracy theories, disinformation campaigns and other pseudo-realities.  Too often its warfare that rushes into combat on cable TV or the Internet, certitude-confidant about how the world works, but with a basis in little more than belief.


Utah’s a place of long-standing culture warfare, amped by rampant misconceptions about believing versus knowing.  In sum, if you advocate for a proposition that can’t be invalidated by objective inquiry, then your assertion is not knowledge-based, but belief-based instead.  To illustrate, advocacy for the Mormon temple ceremony is not based upon knowledge, but upon belief.  For instance, in public spaces in which others don’t subscribe universally to Mormon beliefs, it’s untruthful and disrespectful I assert, for True Believers to describe belief as truth.

In Utah’s ubiquitous Mormon testimony meetings, to illustrate further, adherents attest among other things, that the Book of Mormon is the true written word of God.  Such claims are belief-based and not knowledge based, however.  Philosopher of science Karl Popper explains.

Propositions claiming the status of public knowledge must be evidence-based and therefore refutable.  They must be innately capable of being overridden by impartial inquiry.  If adherence to a particular belief is required as a precondition for the proposition’s embrace, then it’s one of belief and belief alone.

There’s also a tolerance aspect to the Popper rule.  When belief claims collide, their sponsors ought to reflect on this.  As believers rather than knowers, honesty and respect for the other ought to pull us in the direction of tolerance for competing belief claims and their advocates.

In Utah and elsewhere, there’s a corollary for Mormon missionaries; indeed, for anyone evangelizing their point of view.  When one confidently approaches someone’s door, one’s message ought to be delivered heartfully and mindfully this way.  Ready?

The beliefs of the person on the other side of the door aren’t any less “true” than one’s own.

~ Jim Sawyer


Capitalism in Crisis - Carpe Diem with Jim Sawyer


Nobel laureate Joseph Stiglitz explains why American capitalism is under enormous stress.  In “People, Power and Profits” (2019) Stiglitz observes, while the relative income share claimed by rent is increasing, the shares flowing to labor and to productive capital are decreasing.  What has changed in recent years he asks, to tilt America backward, toward an income distribution favoring rentiers?

As with Martin Wolf of London’s Financial Times, Professor Stiglitz answers directly.

Explicitly, there is an explosion of rent-seeking financial activities within the United States and throughout the capitalist world.  Stiglitz makes a prescient observation that opens a visual window into our understanding.  “If talented individuals in society are attracted to rent-seeking,” he observes, “whether making more money through the exertion of monopoly power or scamming others in the financial sector or enticing them into gambling or other nefarious activities—then fewer talented individuals will be engaged in basic research, providing goods and services that individuals really want and need, and other activities that increase the real wealth of the nation.”


As a child I was schooled in Mormonism, a very authoritarian religion.  On Sundays the Sawyer kids were marshalled off to the neighborhood meetinghouse (or perhaps lecture-house).  Neither parent attended, however.  Mother was a lapsed Mormon and Father, a lapsed Christian Scientist.

Early on, I figured out that financial success is especially important to becoming a successful Mormon.  The Church’s popular culture contains significant elements of “wealth-worship” including the embedded perception that wealth and status are manifestations of God’s favor.  Beyond that, the religion embraces huge emulation effects in which aspiring “wannabes” track success-aspiring families and individuals who demonstrate a knack for collecting both status and material goods.

So I began “learning the ropes” with help from my maiden Aunt Leona, who taught me how to pick stocks, when I was twelve.  She was into penny uranium stocks in the 1950’s.  These were mostly unregulated and all the rage on SLC’s stock exchange.  Most of the mines in which she “invested” however, were shuttered and little more than financial shells, conveniently available for manipulation by speculators.  It didn’t matter whether a company had valuable assets she said, somewhat humorously.  You just watch to see which stocks are going up, then you grab some shares, but you must dump them quickly when speculators lose interest before they move on to their next rosy-colored adventure.  The term casino capitalism aptly describes the game in which Aunt Leona played.

Decades following her penny stock forays, Utah’s Mormon culture remains enthralled by get-rich-quick financial schemes.  SLC law firm Ray Quinney & Nebeker caution Mormons especially, to be wary of congregants around them who make financial pitches.  Its website describes yet another sad story of affinity fraud within the Mormon community.  In the most recent case cited, the perpetrator or perp from St. George is serving two years in prison, RQ&N observes.


The essence of legal and illegal financial scamming, according to Joseph Stiglitz, is to become wealthy through the exploitation of others, such as affinity frauds described here.  Scamming occurs, he observes, through the exercise of market power to gain higher prices.  It occurs through predatory lending and market manipulation.  And it occurs through blatant corruption.

Too-many Americans feel powerless, according to Stiglitz, “…against their:

  • Health insurance company
  • Internet provider
  • The airlines they travel on
  • Their telephone company
  • Their bank.

And they resent it.

It has deep consequences for them as individuals, for our politics and for every aspect of our society.  In so many areas they have no choice.  For instance, as employees or customers of their banks, they have no choice but to sign away their rights to a public trial in the case of a dispute…they have to accept a business-friendly arbitrator.”

Similarly, Martin Wolf considers why so many Americans feel pejoratively, what might be called being folded, spindled and mutilated.  But are all complaints real, he asks?  Or are some merely perceived?  How can we sort out legitimate economic grievances from political distractions?

In a pivotal 2019 Financial Times article on this subject Wolf reviews some bogus, popular perceptions.  Among them are that America is being hobbled economically by illegal and legal immigration, and by other economic threats from America’s foreign competitors.  This is what he concludes:  “…the notion that rising inequality and slow productivity growth are due to foreigners is simply false.”

So, what explains why innovation slowed after the mid-20th century?  What is the real culprit in America’s economic wind-down, evidenced by slowing productivity and rising inequality?

The answer lies within the contemporary character of rentier capitalism, Wolf concludes.


Financial liberalization or deregulation metastasizes like cancer, Wolf observes.  Credit is created within the financial sector, stimulating money creation and also corporate abilities to finance internal activities that generate (oft-illusory) internal profits.

According to Stephen Cecchetti and Enisse Kharroubi of the Bank for International Settlements, a certain level of supportive finance is essential to robust economic development, BUT only to a point.  Beyond that point, “…it becomes a drag on growth…”  A fast-growing financial sector is detrimental to aggregate productivity growth, they conclude.

It works this way, Martin Wolf explains.  When an economy’s financial sector is growing quickly, talented people are brought onboard, even as lending increases and credit expands.  Eventually however, new talent becomes diverted away from productive activities, toward those that are less socially useful.  Gambling is a stark example.

One might think of how this productive-nonproductive cycle evolves, analogous to Mormon-style affinity fraud.  Early adopters bring creative genius and extra measures of industriousness.  Later in the cycle however, wannabes may offer little more than the exploitation of vulnerable individuals and institutions.

Wolf cites Thomas Philippon and Ariell Reshef who tracked financial deregulation during the go-go 1980’s, the period of Ronald Reagan’s ideological dominance.  They conclude, between 30 and 50 percent of the pay differential received by finance professionals was actually an income flow to economic rent.  Alternately stated, as much as half of the differential income flowing to these people was payment above and beyond what would have been required to attract them into the industry.

Winner-take-all or winner-take-most dynamics are an accoutrement of huge financial gains.  To illustrate, finance and related professionals crowd into economically pulsing metro areas.  San Francisco’s Bay Area is one of them.  Those left behind, however, become trapped in left-behind towns, spread across mid-America.  Sadly, the left-behinds and the communities in which they reside become economic pariahs.

Surely, Martin Wolf concludes, the explosion of financial activity since 1980 has not raised the growth of productivity.  If anything, it has lowered it.

Some related characteristics are:

  • Exploding executive compensation. Between 1980 and 2017, the ratio of executive pay to average worker pay rose over eight-fold.  Pay linked to share price, he observes, created huge incentives for American managers and financial professionals to attain lofty compensation packages through the manipulation of corporate earnings, using share buy-backs financed with borrowed money.  Social value is not added in this ploy, however.  Merely, wealth is channeled to financial and managerial professionals.
  • Radical tax avoidance. Leaders at the top of corporate pyramids capture publicly funded advantages.  These include taxpayer-funded education for workers, secure operating environments, and socio-political stability.  In exchange however, tax loopholes are exploited.  Among the biggest culprits then, are tax base erosion and profit shifting, including off-shoring.  Agile corporations can relocate almost seamlessly to whichever political jurisdictions may be offering the sweetest deals.  This is evident particularly in the transfer of intellectual property to tax havens, Wolf observes, and in how tax-deductible debt becomes charged, not to profits generated in those tax havens, but against profits generated in high-tax jurisdictions.
  • Rent-producing activities are not only exploited, Wolf says, but created through lobbying to capitalize on tax loopholes, for purposes of avoiding regulation, and for advancement of other anti-competitive practices and financial misbehaviors.
  • In sum, according to Martin Wolf, the explosion of the corporate bonus culture has come to exist at the expense of what otherwise should be robust corporate investment, which has been shrinking, simultaneously. Among the consequences of course, are diminished productivity and therefore diminished economic growth.

How might JM Keynes respond to the problematic laid out by Joseph Stiglitz and Martin Wolf?  Consider this.


Fixes must extend beyond mere financial re-regulation.  Setting capitalism aright requires much more than mere band-aid fixes to rentier culture.  A fundamental rethinking of the origins of fraud-laced pseudo-capitalism has now become de rigueur.  This necessitates fearless, continuing assessments and actions, to realign the way in which some economists think our economic world should work, with the actual way in which it has come to work.

Some aspects of required vigilance are:

Authoritarian Views Are, by Design, Too Simplistic

Rejection of the simplistic world view that economically, there can be only two doctrinal choices. The real world requires more alternatives than merely, “laissez-faire capitalism on the right and Marxism on the left.”  A theory of the middle is sorely needed.

Envisioning Government

The role of government is crucial to envisioning and to creating, whatever the dynamic middle may be. This entails a democratic search for whatever American capitalism’s mission shall be.

American Culture

We can hear claims that ‘this is not us’ when we see fraud, corruption, and violent protest at our nation’s Capital Building but we need to face reality – this is us!

America’s culture wars actually are attempts to define the overall mission within which American capitalism will operate. This determination should be made explicitly through public action, rather than implicitly, such as through Internet bantering and bullying among opponents.

The Threat of Autocratic Leadership

Lacking a specific mission and the social will to carry it forward, America will continue to be vulnerable to the whims of popular autocratic leaders, which the Donald Trump presidency has represented.


Disequilibrium must be taught in universities in order to understand it as an analytical strategy. Standard macroeconomic curricula are long overdue for the bold introduction of this perspective.

Ethics and Education

Ethics must assume, urgently, a new role in MBA curricula.

Revisiting Policies and Regulations

Some of the tools for policy and regulatory realignments are waiting to be dusted off, reclarified, and then redeployed. For instance, authorization for the progressive income tax dates to the 16th Amendment (1913) from America’s Progressive Era.  Key enabling antitrust legislation dates to the Sherman Anti-trust Act (1890).

~ Jim Sawyer


Billions and Billions Hoarded


A broad reading of Keynes suggests this.  Equilibrium in market economies is a special case, but not a universal one.  Hoarding becomes evident when the aggregate difference between quantity demanded and quantity supplied, grows.  During the Great Depression, hoarding took the form of “gold hiding under mattresses” in anticipation of exploding economic dysfunction.

Under normal circumstances, household saving is loaned through banks and other intermediaries to businesses, where it is invested.  Saving is a passive activity, whereas investment is active, economically productive and growth-inducing. There was no investment in feudal society.  “Saving equals Investment” is the idealistic rule-of-thumb learned by college freshmen in macroeconomics.  In disequilibrium however, actual saving may exceed actual investment by the amount being hoarded.

How “shares” are distributed among economic classes is crucial to understanding how America’s economy is evolving.  Workers receive wages; capitalists receive profits.  Rentiers, members of the third class, received ground rents on leased land, historically.  The feudal landlord contributed little or nothing to productivity and therefore nothing to economic growth.  It was the capitalist class that contributed productively to society’s wellbeing through industrious utilization of hired labor.  (Karl Marx of course, attributed the economy’s mainspring to workers instead, not to capitalists.)

As capitalism accelerated in the transition away from feudalism, an agricultural entrepreneur might rent land and borrow seed.  Once lease and loan had been fulfilled, the balance was retained by the capitalist.  If successful over time, then the capitalist’s wealth increased and consequently, so did the community’s wealth and well-being.  Of course, the relative size of the “piece of pie” claimed by capitalists in the new system’s early days was growing, whereas the relative size of the piece claimed by rentiers was shrinking.

America’s national income accounts track the particulars of who receives what, although as the economy evolves and changes, categories and their definitions may require updating occasionally. Surely rent has a more expansive meaning now than at the time of Adam Smith, for instance.  In recent decades, rent-seeking behaviors have increased dramatically.


The hoarding hypothesis endorsed here, runs as follows.  Economists are trained to expect equilibrium.  The profession is not poised to recognize disequilibrium hoarding and it tends to be ignored until rooting it out becomes excruciating.  Gold hoarding defined the Great Depression but was outlawed as the popular place to stash nonproductive wealth hoards.  Now, novel types of hoarding are exploding, even beyond anticompetitive, monopoly-type corporate behaviors.  Taken together, all forms of pseudo-capitalism are growing as threats to stability and prosperity.

As a practical taxonomy, rent tracks the payment, over and above that which an economic resource might receive under competitive circumstances.  Late-Nineteenth Century trusts, such as the Standard Oil monopoly, are excellent illustrations of how economic rent is claimed.  Beyond these monopolistic and oligopolistic forms, we also spread the canvas broadly, to include legal and illegal frauds such as rigging and gaming schemes. The most recent characteristics of disequilibrium hoarding have been building since about the time of the Vietnam War.

Taken as a whole, pseudo-capitalist behavior constitutes the siphoning of saving into wealth hoards rather than into business investment.

In this post our practical focus begins with a description of some conventional rent-seeking behaviors such as those for which the Sherman Anti-trust Act (1890) and Clayton Act (1914) were intended to remedy.  Tragically however, conventional antitrust strategies are losing the battle, beset by shifting and novel opportunities to hoard, and by expansive corporate and individual greed.

Casually, the difference between conventional capitalism and nonproductive pseudo-capitalism may be visualized in this simplistic illustration.  For productive capitalism, consider businesses helmed by Elon Musk and Warren Buffett and similar entrepreneurs.  For illustrations of nonproductive pseudo-capitalism, consider businesses helmed by the cohort that includes President Donald Trump.  There, gambling and deal-making are emphasized, often to the exclusion of economically productive activities structured to actually “make America great again.”


Economic researchers are showing an increasing interest in rent-seeking behaviors, connecting the market dominance and power of certain industries and businesses.  To illustrate, Brookings focuses on some top retail and grocery chains that have raked in billions during the pandemic, even as they have shared little of their windfall with frontline workers.  Amazon and Walmart come in for special criticism.  These two companies, Brookings points out, “…could have quadrupled the extra COVID-19 compensation they gave to their workers…and still earned more profit than last year.”

This is characteristic of pseudo-capitalism.

Stock prices for Amazon and Walmart have soared as much as 70 percent, due to the pandemic.  Meanwhile, worker wages at the two companies have increased only about six or seven percent.  Specifically, Brookings’ Molly Kinder and Laura Stateler observe that typical pandemic-related worker wages at Walmart rose an extra 71 cents per hour since the start of the pandemic.  In comparison they point out, compensation received by the three siblings who are heirs to the Walton fortune, “…have risen $6.2 million per hour, even while they sleep.”  The equivalent increase for Amazon is 99 cents for employees, and for Jeff Bezos, comparable wealth “…has risen $11.5 million an hour.”

These Brookings researchers observe that while pay at Walmart has increased modestly during the pandemic, some other peer companies have offered considerably more COVID-19-compensation.  Costco, Target, and Home Depot, to illustrate, granted compensation approximately three times more generous than Walmart and two times more generous than Amazon.

Brookings concludes.  Even if corporate giants are not forced to share their pandemic wealth with their workers, they have a moral imperative to do so.  “Their frontline essential workforce, who have helped nearly all the rest of us get through the pandemic, certainly deserve it.”


America’s culture wars, fundamentally, are about a combative, competitive search to nail down capitalism’s mission.  Within this struggle to redefine mission, recently I logged three germane points.  Each rest upon a crucial need to sort through mission, backstopping the analysis of each aspect of American capitalism with clarification of the contemporary context in which it operates.

First, demarcate productive capitalism.  Then, draw a bright line around what capitalism is not; about what capitalism should not be.  Screen out anticompetitive behaviors.  Screen out frauds, scams, and cons.

Pseudo-capitalism is about free rides for dealmakers and scam artists who also win big through tax and regulatory breaks. However, what pseudo-capitalists offer in return is akin to what America gets when another casino opens.  Pseudo-capitalism is about a few big winners and endless hordes of disaffected losers, like those who feel they’ve had their pockets picked as they exit.

Ask yourself this.  Do you want America’s commercial future to look more like the business empire of Donald Trump?  Or do you prefer instead that the future we pass to our kids look like the business strategies of Musk and Buffett?

Second, to get to a Buffett-Musk-type capitalism that actually serves America’s interests, we must distinguish what productive capital is, and what it is not.  Capital is not finance per se, although finance is a necessary component used to purchase productive capital in order to make world-class goods and services.  Assets used by pseudo-capitalists must be taxed and regulated at a higher rate in order to dissuade monopolists, fraudsters, scammers and con artists.

Third, to demarcate productive capitalism and capital, America requires a renewed vision of the future we want to create, and the capital needed to create it.  This won’t just happen.  Mission must be consciously constructed.  America’s culture wars are about this.  The two sides are fighting in a free-for-all about what America’s mission shall be.

Next on Carpe Diem:  George Stigler (Nobel, 1982) and Martin Wolf (Financial Times) on how pseudo-capitalist-type corporate strategies are damaging liberal democracy.

~ Jim Sawyer