Out of the Box

Here we are again with capital boxed in at the top in a too-big-to-fail proportion. Big financials are not financing growth because it does not produce a short term profit. The victims are the unemployed, and more broadly anyone that is not upper class. In other words, the profit is at the expense of economic growth, not the result of it (and remember, cutting taxes at the top is supposed to cause economic growth).

The product of this short-term profiteering is risk. Eventually the risk gets so big (as big as the institutions that accumulate it), that the victims end up bailing out the perpetrators. In other words, the risk is shifted (offset) to the public domain and presents as budget deficits and rising debt-to-GDP.

Once again we are testing the legitimacy of the risk proportion, which is what the Tea Party is all about. The Tea Party, you see, is outside the box, but because it is a right-wing, conservative faction, its influence is easily co-opted to conserve the value (the offset) of the risk proportion.

The Tea Party faction unwittingly supports policies and programs that are inimical to the middle-class interests that it is supposed to represent. Instead, what re-presents is the catastrophic, risk proportion.

Instead of being deconsolidated into the middle class, where it will be managed in a highly divisible proportion that is not too big to fail the system, the risk continues to consolidate. What survives the system, by design, are consolidated entities that are too big to fail.

Valuing the deflationary risk (financial compression) of default that consolidation causes appears to be chaos (wild, uncontrolled volatility), but it is really an organized tautology designed to make the profit look pluralistically derived from the chaos (randomly ontological); and in order to command the chaos (reduce the risk ontology), it is necessary to consolidate (which produces the problem to be solved). What trickles down is not prosperity, but detriment--liquidation of middle-class assets into the upper class (the class warfare we are not supposed to talk about because it "kills jobs").

The Tea Party is boxed in. It is co-opted. In order to break out of this box it is necessary to demand deconsolidation of the risk proportion. The more deconsolidated, the higher probability for growth, reducing debt by increasing GDP.

Reducing the deficit and debt does not produce growth. It is, instead, deflationary, and the current volatility we see is the extent of that risk being valued. Producing growth, however, will reduce the deficit and the debt, which has been fully discounted. The discount has downgraded sovereign debt, for example, while the expected value of profit (the volatility) is being measured that accrues to the top-income class with virtually no risk save the gamma (political) risk.

Extending tax-expenditures for the rich keeps the wealth consolidated. It is time, in the name of life, liberty, and the pursuit of happiness, to climb out of the box and deconsolidate the risk into a not-too-big-to-fail proportion.