I don't recomend you turn to Cracked.com for investment adivce. Nonetheless, the site has offered a useful and entertaining introduction to "Socionomics," which is worth a read:  

You could say that "Freakonomics" (numbers 7, 6, 4) is the use of micro-economic reasoning to offer nifty explanations for a social trends in a way that makes you seem smart.

"Socionomics" (numbers 5, 3, 2, 1), on the other hand, is something quite different. The discipline was developed by Robert Prechter, the legendary financial analyst and, currently, an über-bear on every asset but cash. In Prechter’s mind, your average trader and CNBC analyst makes his decisions and opinions based on “news”; Prechter flips this on its head, claiming that “news”—along with fractal moves in market indices—is an effect, not a cause, of deeper waves of social mood and outlooks toward the future. Such waves are repetitive and cyclical—and thus predictable; in themselves, they are inexplicable...

The sagacious New York Times columnist Paul Krugman has quipped that conservatives should reject the Thanksgiving holiday as "un-American," since its mythical first occurrence involved Pilgrims and Indians generously sharing seasonal food and goods—or in other words, Socialism.

Here’s how it went down: a bunch of people got together, with each group bringing what it could — the Wampanoag brought deer, the Pilgrims apparently shot some birds, etc.. Then everyone shared equally in the feast — regardless of how much they brought to the table. Socialism!

Worse yet, many of the lucky duckies benefiting from the largesse of this 17th-century welfare state were illegal immigrants. (That would be the Pilgrims).

What Krugman truly reveals is that the founding myths modern Americans like to recount to themselves—and instill in students in public and private education—are, at their core, egalitarian. The genuinely heroic myth of close-nit communities' surviving in a rugged wilderness and reaping their first harvest is eclipsed by the vision of interracial harmony.

The good thing is that the reality of the First Thanksgiving barely resembles the contemporary myth. Indeed, the truth is something out of The Conquest of the Continent.

Matthew Lyons is a leftist writer of  the "watchdog" variety and has in the past worked as a co-author with Chip Berlet. He currently operates a blog called "Three Way Fight" which previously featured a critique of AlternativeRight.Com from a hard left perspective. More recently, Lyons published an extensive critique of the ideas and work of yours truly on the socialist New Politics website. I have since produced a three part response. See Part One, Part Two, and Part Three. Lyons has posted a very brief reply to my reply. Readers of AltRight may find the exchange interesting or at least amusing.

The alternative Right was way out in front spotting "The Diversity Depression"--that is, the role that affirmative-action lending played in the housing bubble and resulting financial crisis. (The term was coined at Takimag in June, 2008, and developed mostly at VDARE). The idea has since been integrated into a number of post-crash books. Even Walter Russell Mead, the establishmentarian's establishmentarian, has caught on. And he suggests that the GOP run on "The Diversity Depression" in 2012 as a proxy for the need to end the evils of affirmative action and the Nanny State. (That is, Mead advises Republicans to dedicate themselves to matters that might improve the lives of the White people who vote for them. Fancy that?)  

Democrats, watch out.

The Republican Party and especially its Tea Party wing have just acquired a new weapon of mass destruction — and it has nothing to do with any of Congressman Wiener’s rogue body parts.  If they deploy this weapon effectively in the next election cycle — a big if — then they have the biggest opportunity to move the country rightward since Ronald Reagan took the oath of office back in 1981.

The Tea Party WMD stockpile is currently stored in book form:  Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. By Gretchen Morgenson, one of America’s best business journalists who is currently at The New York Times, and noted financial analyst Joshua Rosner, Reckless Endangerment gives the best available account of how the growing chaos in the mortgage and personal finance markets and the rampant bundling of dubious loans into exotically toxic securities plunged the world, and millions of American families, into the gravest financial crisis since World War Two. It is gripping reading as well, and its explanations are clear enough that readers without any background in finance will have no trouble following the plot.  The villains?  An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros.  (Frank got a cushy job for a lover, Pelosi got a job and layoff protection for a son, Cisneros apparently got a license to mint money bilking Mexican-Americans of their life savings in cheesy housing developments.)

Massachusetts Congressman Barney Frank (Source: Wikimedia Commons)

If the GOP can make this narrative mainstream, and put this picture into the heads of voters nationwide, the Democrats are toast.  The party will have to reinvent itself (or as often happens in American politics, be rescued by equally stupid Republican missteps) before it can flourish.

If Morgenstern and Rosner are to be believed, the American dream didn’t die of old age; it was murdered and most of the fingerprints on the corpse come from Democratic insiders.  Democratic power brokers stoked the housing bubble and turned a blind eye to the increasingly rampant corruption and incompetence at Fannie Mae and the associated predatory lenders who sheltered under its umbrella; core Democratic ideas may well be at fault.

This is catnip to Republicans, arsenic to Dems.  If Morgenson and Rosner are right, there is someone the American people can blame for our current economic woes and it is exactly the cast of characters that a lot of Americans love to hate.  Big government, affirmative action and influence peddling among Democratic insiders came within inches of smashing the US economy.

Do you think they might do it?  

Nah, better to make noises about invading more Middle Eastern countries!

This is what happens when White nerds get their hands on authentic African-American musical forms. With this single video, a whole generation of Black Americans has been alienated from Austrian economics.

For more see EconStories.tv. 

James Kirkpatrick’s review of Atlas Shrugged’s long-in-coming film incarnation highlighted something that is often underlined by some libertarian economic commentators: the need to have a productive economy—an economy based on savings and production, rather than on indebtedness and consumption.

This was recently, if perhaps obliquely, highlighted by an unlikely source, the BBC, which on 15 February ran an article by Stephen Evans that attempted to answer Why the German and UK economies differ sharply?

The article began:

Compare and contrast, as they used to say in the exams.

The German economy grew by 3.6% last year and is expected to grow by more than 2% this year.

According to the latest figures, the British economy actually shrank in the last three months of 2010, although it is expected to grow by 2% in 2011.

In the UK, unemployment is rising. In Germany, it is falling. The British unemployment rate is higher than Germany's, and so too is the rate of inflation.

In Britain, trade is in deficit. In Germany, it is in sizzling surplus.

Drilling for growth

Trade is the key to the German recovery.

The country makes things that others want to buy - particularly in growing economies, and particularly in China.

The German economy currently meshes nicely with China's needs, such as machinery to industrialise. It is also good at providing China's wants, including BMWs for the new rich.

As Germany's Economy Minister, Rainer Brüderle, told the BBC: "We give the equipment to the world, to the virgin markets that need it and want it".

German industrialists make much of the strength of their manufacturing.

Dieter Burmester created and owns Burmester Audio Systems which makes very high-end amplifiers and speakers - the price tags say hundreds of thousands of pounds, euros or dollars, for the top of his range.

"I don't understand politicians who don't know the value of production", he says.

You can see German technology all over the world, very often from small companies.

The disaster in Chile with the mining workers? The drilling machinery was from Germany. Drilling a tunnel in Switzerland? The machinery comes from here.

"Many years ago, when some countries saw their future in service industries like I believe the British did, I wondered about it.

"The strongest economy you will have is when you have to deal with something concrete, and it's not just a number written on paper," said Mr Burmester.

Dependable products

He is a classic German engineer and entrepreneur.

His company is a typical example of the "mittelstand", that swathe of medium-sized, often family-owned firms which produce things, often of high quality, with much investment in research and design.

His product is handmade in Germany. The words are written on the back of every item in English, but there is much research and development behind it.

He is an unflashy engineer. Solid, but with carefully planned change, might be his motto.

"Solid" is the word that keeps recurring with the German economy.

For consumers, it translates as "save then spend".

Note the reference to the importance placed by the Germans on quality and design in manufacturing, and on manufacturing in Germany. Note also the implicit lesson in the different experiences resulting from the respective economic models: an economy based on transporting and selling low-quality, rapidly-obsolescing goods, hurriedly slapped together in Third World sweatshops by prognathous platyrrhines of photon-like brain mass, and bought with borrowed fake money at high interest, may initially lead to an influx of quick cash and a temporary illusion of wealth, but it eventually flounders, catastrophically, and takes longer to recover at a much greater cost.

America’s historic majority isn’t actually more enamoured with laissez-faire capitalism than other peoples around the world, or more “Center Right,” as is commonly asserted. What is unusual about White Americans is that some 50 percent of them consider themselves “middle class.” (This number is, no doubt, significantly higher among those who vote regularly and are politically engaged.)

Whatever the details of their demands, the fundamental cause of the recent protests in Wisconsin is the growing recognition among the American Middle that the lifestyle to which they are accustomed—think a house in the ‘burbs, a reliable pension or 401k, and the ability to live it up on easy credit—is vanishing before their eyes. (The fact that the state of Illinois, for instance, is financing its pensions with new debt issuances reveals the total unsustainability of “set for life” employment.)

In this way, the public-sector employees who have taken to the streets over the past 10 days have quite a bit in common with the Tea Party, despite the two being cast as sworn enemies by the media—the lazy free loaders vs. the Astroturf of corporate capitalism. Both the Tea Party and the Wisconsin phenomena represent genuine, grassroots protest movements of Whites caught somewhere between the stages of denial, anger, and bargaining in mourning the death of their “American Dream.”

Viewing scenes of mass riots, looting, blood in the streets, the torching of government buildings, and the Egyptian army opening fire on citizens, most mainstream commentators have discussed the situation in Cairo in the only way they know how—it’s all about “democracy.”

Summed up briefly, Egyptian President Hosni Mubarak is a “brutal dictator” and is finally getting his comeuppance. The solution is for Egypt to hold elections… or rather, hold elections that the Muslim Brotherhood wouldn’t win, for “democracy” means voting in pro-Israel, pro-Washington, and pro-market representatives. At any rate, once Egyptian Twitter is turned back on, liberal utopia will ensue. 

More nuanced commentators have noted Washington’s incoherent and frivolous policy of trying to unleash democracy in the Middle East—and finaning such forces—while at the same time giving massive foreign-aid outlays (1.5 billion) to Mubarak’s Egypt in the hope of stability. (It seems that even the most devout neocon, neo-liberal, and globalist recognizes that the true voice of the demos in the Middle East is something close to Islamism.)

Very few have asked the all-important question of “Why now?”—that is, what caused, or at least sparked, this violent uprising, as well as similar affairs in Tunisia, Algeria, and Yemen? The Arab Republic of Egypt had been chugging right along under Mubarak’s dictatorship for some 30 years; indeed, Egypt experienced steady GDP growth of late, putting the lie to the idea that democracy is correlated with economic progress. So again, why now? What has changed? Did Egyptians simply wake up last Thursday morning and collectively decide that they’ve had enough and now want to vote?

It’s hard for most of us to imagine, but China is experiencing skyrocketing price inflation, which includes a housing bubble that puts the Las Vegas suburbs to shame. The Financial Time reports of an amusing viral email that’s getting passed around Shandong:

With consumer inflation in China topping 5.1 per cent in November, public dissatisfaction at price rises has reached the highest level since records began in 1999, according to a recent central bank survey.

But such surveys cannot convey the acerbic political wit that Chinese people, and especially Beijingers, are famous for when they have to “eat bitterness” – in this case to meet the cost of buying a home.

The e-mail, which has gone viral in various versions, provides unscientific but entertaining estimates of how long citizens would need to work to afford a 100-square-metre apartment in central Beijing, which currently sells for about Rmb3m ($450,000).

As long as there were no natural disasters, a peasant farmer working an average plot of land would just have been able to afford an apartment if he or she somehow had worked since the Tang dynasty, which ended in 907AD, until today.

If a Chinese blue-collar worker had been on the average monthly salary of Rmb1,500 since the opium wars in the mid-19th century and had given up weekends, then he or she might just have been able to afford a place of his or her own.

Prostitutes, the e-mail says, would have to entertain 10,000 customers – a marathon feat requiring them to service one customer a night from the age of 18 until the age of 46 without an evening off.

The thief would need to conduct 2,500 robberies to find the funds to buy a home.

Of course, the e-mail notes, such calculations do not count interior decoration, furniture or household electronics.

Forget the federal government's 14 trillion in debt--and some 100 trillion in unfunded liabilities--the first shoe to drop might very well be the debt markets of the state and local governments, which lack recourse to a printing press. 

From The Economic Collapse blog,

Once upon a time, municipal bonds (used to fund such things as roads, sewer systems and government buildings) were viewed as incredibly safe investments.  They were considered to have virtually no risk.  But now all of that has changed.  Many analysts are now openly speaking of the possibility of a municipal bond market crash in 2011.  The truth is that dozens upon dozens of city and county governments are teetering on the brink of bankruptcy.  Even the debt of some of our biggest state governments, such as Illinois and California, is essentially considered to be "junk" at this point.  There are literally hundreds of governmental financial implosions happening in slow motion from coast to coast, and up to this point not a lot of people in the mainstream media have been talking about it.  [...]

Unlike the federal government, state and local governments cannot just ask the Federal Reserve to print up endless amounts of cash.  If state and local governments want to spend more than they bring in, they must borrow it from investors.

If the municipal bond market crashes, and investors around the world are no longer willing to hand over gigantic sacks of cash to state and local governments in the United States, then the game is over.  Either state and local governments will have to raise taxes or they will have to start spending within their means.

Most Americans have no idea what this would mean.  For decade after decade, state and local governments throughout the nation have been living way, way, way above their means.  If the debt cycle gets cut off, it is going to mean that many local communities around the nation will start degenerating into rotting hellholes nearly overnight.

We are already seeing this happen in places such as Detroit, Michigan and Camden, New Jersey but if the municipal bond market totally collapses we are quickly going to have dozens of Detroits and Camdens from coast to coast.

Let's take a closer look at some of the state and local governments that are in some of the biggest trouble....

California

California is facing a 19 billion dollar budget deficit next year, and incoming governor Jerry Brown is scrambling to find billions more to cut from the California state budget.  At this point, investors are becoming increasingly wary about loaning any more money to the state.  The following quote from Brown about the desperate condition of California state finances is not going to do much to inspire confidence in California's financial situation around the globe....

"We've been living in fantasy land. It is much worse than I thought. I'm shocked."

Unfortunately, the economic situation in California continues to degenerate.  For example, 24.3 percent of the residents of El Centro, California are now unemployed.  In fact, the number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined.

The housing market in the state is also a major drag on the economy there. For instance, the average home in Merced, California has declined in value by 63 percent over the past four years.

The state of California is swamped with so much debt that there literally appears to be no way out.

Arizona

The state government of Arizona is so incredibly starved for cash that it actually sold off the state capitol building, the state supreme court building and the legislative chambers.  Now they are leasing those buildings back from the investors that they sold them to.

Arizona also recently announced that it has decided to stop paying for many types of organ transplants for people enrolled in its Medicaid program.

Illinois

Illinois is widely regarded to be in the worst financial condition of all the U.S. states.  At this point, Illinois has approximately $5 billion in outstanding bills that have not been paid.

According to 60 Minutes,  the state of Illinois is six months behind on bill payments.  60 Minutes correspondent Steve Croft asked Illinois state Comptroller Dan Hynes how many people and organizations are waiting to be paid by the state, and this is how Hynes responded....

"It's fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state."

The University of Illinois alone is owed 400 million dollars.  There are approximately two thousand not-for-profit organizations that are collectively owed a billion dollars by the Illinois state government.

New Jersey

The New Jersey state budget has been slashed by 26 percent, a billion dollars have been cut from education and thousands of teachers have been laid off.

But even with all of those cuts, New Jersey is still facing a $10 billion budget deficit next year, and the state has $46 billion in unfunded pension liabilities and $65 billion in unfunded health care liabilities that it is somehow going to have to address in the future.

Detroit

Detroit Mayor Dave Bing has come up with a new way to save money.  He wants to cut 20 percent of Detroit off from essential social services such as road repairs, police patrols, functioning street lights and garbage collection.

Miami

One Miami commissioner declared earlier this year that bankruptcy may be the city's only financial hope.

Philadelphia, Baltimore and Sacramento

Major cities such as Philadelphia, Baltimore and Sacramento have instituted "rolling brownouts" in which various city fire stations are shut down on a rotating basis.

Camden

The second most dangerous city in the United States - Camden, New Jersey - is about to lay off about half its police in a desperate attempt to save money.

Oakland

Oakland, California Police Chief Anthony Batts has announced that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer.  The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

Nassau County, New York

In New York, the country of Nassau (one of the wealthiest counties in the state) has a budget deficit that is approaching 350 million dollars.

The endgame will take one of two possible forms: 1) the federal government says no, and the downward pressures of cancelled pensions, higher taxes, and unemployment push the economy into a deflationary depression; or 2) the Feds say yes, fire up the printing press, meet every state and local obligation in nominal terms, and create, eventually, hyperinflation.

I'd bet on scenario two.