Chris, Mish, excellent as usual. As a side note, it is refreshing to hear a thorough discussion of a complicated topic, like what we used to have in the United States in the form of public debates (Lincoln-Douglas, anyone), what a refreshing change for a curious mind from the 10 second sound bite on TV and the little screens around us.
Coupled with your John Rubino Off the Cuff, I think you and others- HughK- are missing some key dynamics, here, and this partially explains why things are extending for such a long runway.
You need to think of "wealth" as a complex differential equation, not an arithmetic sum as you and your guests tend to do or at least imply when you talk about wealth transfer as if it were a 'zero sum game'.
Lots of analogies hear in the real world. I use one as an example.
The temperature in your living room- it may seem static to you but it is actually a function of several things all operating simultaneously. Here are some of the inputs that result in "temperature". The rate of new heat blowing in from your HVAC (a differential of heat input wrt to time), the rate of heat transfer from your walls to the outside (also a differential of heat loss wrt to time, dependent on the heat difference - colder outside = faster heat transfer). The temperature outside, which is almost always changing- dropping, warming, again a differential in temperature wrt to time. The wind, which creates more heat transfer the fast it blows. The sun, or lack thereof, as there is differential heating rates (again a differential wrt time) on home surfaces depending on time of day and amount of sun.
I use this as an illustration to show how many things , that are actually differential functions wrt to time, and other conditionals like sunlight, can effect a seemingly simple variable- temperature in your living room.
Wealth- you seem to treat it like it is a static thing that is essentially a pile of coins in the middle of the room that the PTB are moving around and stealing from savers. While agree there is a major element of this, there are other inputs into the wealth equation.
Wealth is constantly being created. I mean real wealth. Ore and timber are using energy and technology inputs to make gold necklaces (valuable and beautiful) and cabinets (valuable and beautiful).
Wealth is constantly being destroyed. House fires, bombing campaigns, ships lost at sea carrying necklaces and cabinets, these events destroy wealth. Gone. Bye Bye.
I agree with about the wealth transfer paradigm. It is wrong and in essence stealing by people who have no right to this wealth and did not earn it. It is distortionary to the greater economic society in that it moves capital to accounts that don't produce anything. These include the massive prop trading desks and massive government programs.
Just remember there are several other inputs. The fact that we have innovated greatly such that we convert raw materials, using energy (as you rightly point out) to real wealth, and not just any wealth. Cars that are lighter, stronger, last longer, are more reliable. Carbon fiber arrows and bows that are cheaper and better. Houses that have roofs that shed rain longer and don't require as much upkeep.
You need to remember that these are all part of the total, large differential equations that include inputs that adds wealth to the common man's pocket. Not quite out of thin air, but out of smaller inputs as technology improves. This wealth creation counterbalances the wealth theft. And makes things go on longer. The question is- how much can you keep? How much can you prevent from being confiscated and stolen by the government?
Greece tax receipts are very low because doctors claim 13,000 euros on their tax returns. I think most people know quite a bit about what real wealth is. Not perfectly. But the higher the government turns up the collection agencies, the tighter people turn up the avoidance strategies.
After all, as long as one is warm, fed and has a nice flat panel TV, one doesn't care if they are working with two incomes instead of one, sacrificing their time with their children and church, and unable to retire at 65, does one?
