The Constitution of the United States of America. The title is incomplete. The full title should be the Constitution of the State Powers of the United States of America and the Application of these Powers on the People of the United States.
Whew. That’s a mouthful, but a lot more accurate. A full title provides proper context to America’s three asset classes: the bondholder/rentier; the salaried homeowner; and the non-asset wage earner.
A proper and full title also gives us a starting point for the State’s foray into the future. I am considering replacing references to the term, “the State”, with the term, “convergence.” The State implies a cabal of similarly interested people sitting around a table discussing world domination. As Professor Vaknin notes, there is no meeting of Doctor Evils sitting around discussing how to take over Planet Earth. Rich people do not talk to each other, he notes. But they may be on the same frequency.
But as for the Constitution, “the Convergence” did sit around a couple tables in Philadelphia in 1787 and draft the document we have today. In this document, the first three articles describe how each state power is fixed or settled into the Executive, Legislative, and Judiciary while the first ten amendments describe the limits on the application on taxpayers of these State powers.
The three powers combine to design and implement the connective tissue of the United States. The rules or algorithms that move goods or services through the conduits of commerce are promulgated by a narrative that describes who gets what. These narratives are contained in executive orders of the President, opinions of the courts, and statutes issued by the Congress.
This political economy may encourage autonomy in pricing (the so-called free market), but it was built by the Convergence and is regulated by the three State powers.
As far as which asset class has the most weight in influencing the regulation, that class may be the bondholder/rentier. The bondholder/rentier is a global macro strategist that sees America as one of the 190 asset classes whose bonds yield the bondholder/rentier the income to sustain herself. She is interested in an executive, legislative, and judiciary that protects her yield. She wants the political economy to expand and the State powers to amplify that expansion. She is the State.
The salaried homeowner has an interest in the appreciation of the equity value in her home. She may or may not fully appreciate the impact that interest rates have on her home value. From my observation, she does not, outside of voting, seek out the pressure points that when pressed can impact fiscal or monetary policy. She makes the mistake of leaving such worries to her elected representatives who demonstrate an equally ignorant view on fiscal and monetary policy.
Last is the non-asset wage earner. They are the poorest of the political classes. He does not apply political pressure on monetary policy because he has no incentive to. He has no assets to protect. He likely does not vote. Interestingly, he is, in my opinion, the driver of the economy side of the political economy. His propensity to consume creates the revenues and profits that flow to the bondholder/rentier.
The bondholder/rentier may be taking this symbiotic relationship for granted. For those who are attuned to this relationship, they exercise an interest in ensuring that the three State powers craft narratives that encourage consumption and employment. The bondholder/rentier is in the numerical minority and controlling the majority means influencing the mens rea of the voter.
Alton Drew
7 June 2024
For more on my views on the political economy, buy my book at amazon.com/author/altondrew.
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