Monthly Archives: September 2015

The SJW Narrative Collapse

The Multicultural Narrative Is Collapsing Before Our Eyes

As I predicted in 2014, there is definitely evidence of SJW narrative collapse, especially on Reddit and elsewhere, with the rise of Red Pill, Dark Enlightenment, and other anti-SJW movements and ideologies. Online, whenever a story breaks out about the public school war on boys or about false rape accusations, the overwhelming majority of comments are against the SJWs, and we’re not talking about conservative websites, but sites like Reddit that have a broad appeal. For example, I was on Reddit in early August following the Ferguson melee, and I estimate at least 3/4 of the users were on the side of the police and against ‘black lives matter’. Anti-police comments were summarily down-voted.

Although the 1st amendment does protect speech, it won’t prevent you from getting fired, which is probably the SJWs most potent weapon – getting people shit-canned. With any luck, maybe the Overton window of the offline world will eventually align with that of the online world, but for now in the ‘meatspace’ liberalism and public relations still dominates. And then for most jobs the supply of labor vastly exceeds demand, so unless your job is irreplaceable, employers will almost always have a queue of candidates lined up to take your job should you become an unnecessary public relations ‘burden’.

Purple Policies, Part 2

From Charles Murray: The Trouble With Kids Today

Again, my underlying point is simple. IQ has a substantial direct correlation with measures of success in life, and it is also correlated with a variety of other characteristics that promote success—perseverance, deferred gratification, good parenting, and the aspects of personality that are variously called “emotional intelligence” or “grit.” The correlations are not large, but many modest individual correlations produce large differences in life outcomes when the means of two groups are separated by as large a gap as separates both parents and children of America’s working and upper-middle classes.

Charles Murray is right about the inescapable role IQ plays in socioeconomic outcomes, especially in the post-2008 economy, and how people are falling behind because of low IQs in an economy that increasingly rewards intellect.

The left says the solution is more education spending – for everyone, regardless of IQ. The left believes that equal education and socioeconomic outcomes can be attained if enough taxpayer money is thrown at the problem, with the role of biology being nonexistent. The right, on the other hand, wants to get the government out of the picture, but since public education is probably here to stay, the best approach is to reform it through ‘purple policies‘ to optimize America’s most important resource, cognitive capital. Instead of the futile leftist endeavor of trying to create equal outcomes, let’s create equal opportunities so that America’s gifted children can live to their full potential within the meritocracy. If we’re going to have pubic services, let’s make sure resources are allocated optimally instead of indiscriminately.

The Appeal of Doom and Gloom

In a slow news cycle, like we’re in now, human interest stories dominate, stuff like the the clock hoax, the Budapest refugee ‘crisis’, and so on, all overblown to turn outrage and curiosity into ad dollars. That’s why the news is a waste of time…little actionable value can be gleaned from it. The same goes for doom and gloom – predictions of America’s decline and demise – that have become commonplace on blogs and YouTube channels, and, like the news, is at the very least useless and, at worst, perilous to your financial health.

There won’t be a collapse – just a continuation and amplification of existing trends. I’ve been blogging on and off since 2008 or so, have read pretty much every economics opinion and perspective out there, and can’t recall a single instance of a doom & gloom prediction coming true.

The financial problem of 2008 could have been the start of something much worse, and many predicted it would, but thanks to effective policy, the propensity of the consumers to keep consuming and innovators to keep innovating, things quickly recovered.

Peter Schiff was completely wrong in predicting a surge in emerging markets, gold, and foreign currencies, as well as a decline the US dollar, hyper inflation, and a bear market in equities; the exact opposite happened. Inflation as measured by the CPI is still low, the dollar is surging, emerging markets & foreign currencies have been poor investments. Anyone who took Schiff’s ‘advice’ lost their shirt in one of the strongest bull markets ever. You not only underperformed the S&P 500 – you underperformed cash.

The same for Zer0hedge, which has been on the wrong side of things since 2009 and yet is still immensely popular as a ‘go to’ source for market ‘rumors’ that somehow retain their exclusivity after being viewed millions of times. Other times, it’s stating the obvious…’wow, computers are used in trading…who knew’.

And Karl Denninger, another whinny doom and gloom pundit who has gotten everything wrong, yet he is still considered an ‘authority’ on markets and the economy.

Why do people predict gloom? Maybe it’s trendy these days to be negative about the economy, in contrast to the the 80′s and 90′s when optimism seemed to prevail. You can sell more newsletter subscriptions, get more ad revenue if you scare people. Possibly, and understandably so, recent economic trends, wealth inequity, and job anxiety, as well as the election of Obama, have made many people negative about the economy and the fate of America, but I take an optimistic approach in that if the economy and stock market is thriving in spite of Obama, as a testament to the ingenuity and resiliency of the best and the brightest within a free market, with better leadership and better policy the economy can operate at its full potential.

Doom and doom cuts both ways; welfare liberals say we’re doomed because of wealth inequality; some on the right says we’re doomed because of debt. Both are wrong, although being optimistic about America’s debt situation isn’t an invitation to careless spending.

To the left, especially, crisis is seen as a form of ‘retribution’, the resetting of the system to a more egalitarian state, against the wealthy and powerful elite. And for some on the right, crisis is a way for society to return to its ‘roots’, to a time before modernity made things worse by disrupting the ‘social order’.

How about a third option: Taking the good with the bad, playing the cards dealt without waiting or hoping for fate to reshuffle the deck and deal you a better hand.

But being a contrarian, by being long stocks while everoyne else is negative, pays nicely. They say the market climbs a wall of worry, and this bull market, the most hated ever, is up 200% from the March 2009 lows . You look at the late 90′s when everyone was optimistic, which ended in a 50% decline in the S&P 500 between 2000-2003, so perhaps the most enduring bull markets are ones where few are optimistic and participating. Everyone is looking for excuses for things to get worse – but GDP, consumer spending, and profits & earnings keeps humming along, quarter after quarter, year after year.

Overall, bet against America, its stock market, and its economy is a bet against its best and brightest that make America the economic and intellectual superpower it is today and probably always will be. With the exception of the 30′s and in 2008, such a bet would have been a big loser. We’re talking two successes out of a sample size of a hundred years. America may have social decline, and there are other problems, but things that can be measured – stuff like economic data and stock prices – are doing well, but if, unforeseeably, things go pot and don’t recover, maybe I’ll dust off the Karl Denninger and Zero Hedge articles as maybe there was some value amid the cacophony of fear peddling, and while a broken clock is right at least some of the the time, these pundits are never right.

Related: Ignore the Doom and Gloom Narratives

The Great Debate Again: Jobs vs. Automation

Again from Aaron:

The Luddite Fallacy has a long history of being a fallacy. There are new jobs replacing obsolete ones. And in other instances, automation and jobs can coexist. In the first instance, every major brand has Facebook page and these brands hire people to answer questions and delete spam from the pages – a job that just six years ago didn’t exist. Although food stores and some fast food restaurants have ordering kiosks and self-checkouts, they still have roughly the same number of regular employees, so the machines and employees coexist instead of the machines taking all of the jobs. Also, there are new jobs to help customers use the machines, and jobs to fix the machines, install them, etc.

The question that inevitably arises is, ‘If everything is automated/ without a middle class, who is going to buy stuff? Won’t the economy fail?’

As I explain earlier, however, in spite of the hollowing out of the middle an the un-participatory nature of the post-2008 economy, I’m still bullish on stocks and the US economy, since, in accordance to the Pareto Principle, the top 20% (the cognitive and financial elite) are compensating for any weakness in the middle, along with strong overseas growth and the booming foreign middle class.

The richest consume the most; the poorest the least:

Booming foreign consumption, especially the Chinese luxury consumer:

In an economy that otherwise feels stagnant, high-IQ tech like Google and Facebook and intellectual property exporters like Disney is where the growth is. Consequentially, due to the contributions of an elite few, stocks, consumer spending, and profits & earnings will keep rising even if many people are left out:

We’ll also see an acceleration of the trend of salaried jobs being replaced by freelance/gig jobs that may not be counted in the official labor statistics.

After accounting for new technologies and overgenerous entitlement spending, and in spite of stagnant real wages, America’s poor are much better off than they were generations ago, and much better off than the poor everywhere else, which is probably why so immigrants come here. Also, in a free market, capitalists want their goods to be accessible provided they can make a profit; they have nothing to gain by keeping all the cool technologies to an elite few.

Also, skilled labor should remain in demand. Maybe this is an argument for making STEM education free, since these are the people who create the most economic value.

Sterilization/mandatory birth control in exchange for welfare…also a good idea, especially considering the hereditary component of poverty and IQ scores; otherwise, the generational poverty cycle perpetuates.


The Great Debate: Automation, Jobs, Wealth Inequality, Basic Income, Post Scarcity

Sorry Middle Class, You’re Just Not That Important Anymore

The Daily View: Teaching Kids to Code; Pinterest & Web 2.0; GOP Debate

From AVC: Computer Science For All

Yesterday Mayor de Blasio announced Computer Science For All which is a ten year effort to train 4,775 NYC public school teachers on the fundamentals of computer science and how to teach it to their students. The goal of Computer Science For All is to have computer science teachers and classes in every one of the 1,700 NYC public schools within ten years.

The average public school teacher has an IQ around 100. Good luck bringing them up to speed on the intricacies of computer science. Failure to understand the limitations imposed by biological reality leads to unrealistic expectations.

And on a related note, again from AVC: What Is Coding?

Coding involves the use of syntax. Turning on a machine is not coding. By AVC’s definition, putting a key in an ignition is ‘coding’. It’s nice to see some commenters calling Fred out on his sloppy terminology.

The point of teaching kids to code is that machines are becoming an ever more important part of our lives and an ever more important part of society and the economy.

Those who are good at instructing machines will have an easier time navigating the life that is in our future.

That’s why we should teach kids to code.

More specifically, teach coding to the kids who are smart enough. It’s hard enough teaching algebra, let alone coding, which is many magnitudes harder.

From MarketWatch: Pinterest hits 100 million monthly users in bid for ad-search dollars

Pinterest Inc. said on Thursday that it has hit 100 million monthly active users worldwide, sharing for the first time the heft of its user base as observers question whether the image-sharing site is worth the $11 billion valuation investors bestowed on it earlier this year.

Valuations for leading web 2.0 companies like Uber, Snapchat, and Pinterest will keep rising, as much the left wishes it were a bubble like 2000 all over again.

Earnings are not important right now for web 2.0 companies with huge userbases, like Pinterest and Snapchat, as I explain here. The reason is two-fold:

Despite the left’s predictions that Facebook would be another Myspace, Facebook has demonstrated runaway success monetizing its over billion users on both the mobile and desktop platform. It’s reasonable to assume that Pinterest and Snapchat, which have similar demographics as Facebook, will also also be hugely successful at monetizing its users. Investors are patient, knowing that the cash ‘switch’ can be flipped at any time, but for now Pinterest is intentionally delaying monetization to grow its userbase, similar to Amazon’s strategy.

Given that Pinterest only started generating meaningful revenue this year, one crude way to compare the company with its peers is to look at its equity value per monthly active user. Earlier this year, investors such as Andreessen Horowitz and Goldman Sachs valued the company at $11 billion, more than doubling its previous valuation of less than a year ago.

Pinterest will be worth $30 billion within a few years. Air BNB will be worth $70 billion and Uber $100 billion. Snapchat: $60 billion. Part of what makes Pinterest so appealing to advertisers is that its demographic is mostly women, who spend more money shopping online than men:

These valuation forecasts may seem obscene, but we’re in a situation where there is a lot of money chasing a handful of very successful, rapidly growing companies. In 2012, following Facebook’s disappointing IPO and subsequent decline in share price, I predicted Facebook stock would rocket higher; it has since surged 300% from the $20′s to as high as $95, and, in 2014, predictions about about Uber and Snapchat were also correct. In early 2014, when Snapchat was worth ‘only’ $3.5 billion, I predicted it would be worth over $10 billion, and now it is. I also predicted in early 2014 that Uber would be worth $100 billion, and it’s almost there.

The rise of Web 2.0 is about IQ being more important than ever, of smart people being rewarded in the marketplace for the value they bring to society and the overall economy.

There was also another GOP debate last night, which I was unaware of until I saw a headline about it this morning. Too early to know what will happen, and too early to get excited when Hillary will likely win unless the GOP gets its act together – or – unemployment surges. Like the crisis of 2007-2008 that put Obama in the White House, the GOP needs things to get worse in time for the election. It may seem ‘wrong’ to want the economy to worsen in order for Hillary to lose, but it’s for the long-term good of the economy that the GOP win.

Breaking the Tuition Feedback Loop

From Aaron Clarey:

On Reddit, 4chan, the blogospehre, and on Youtube, there are three ‘great debates’ that have been raging since 2013:

SJWs/Gawker vs. Redpill/PUA/MRA/Gamergate, the largest most heated of the three, is an internet version of the age-old left vs. right schism, but the battle is waged on Twitter, Tumblr, Reddit, and blogs instead of traditional media. Pretty much every everyone with a Twitter or Youtube account is in some way engaged, exchanging barbs back and forth.

The second debate is about automation/the rise of robots, and how individuals, society, and the economy will adapt. The debate is divided among those who argue that the ‘Luddite Fallacy’ will remain a fallacy and that economy will always adapt to automation by creating new jobs; others argue that there will be a large unemployed underclass, necessitating radical social programs like a universal basic income.

The third debate is about college, specifically about whether or not it’s worth attending. The debate is dividend between those who argue against going to college and those who say it’s still worthwhile.

The above video concerns the third debate topic, college.

I agree that tax payer money should not be used to fund low-ROI courses, but that doesn’t mean we need to throw the baby out with the bathwater. And the entire situation is quite convoluted, involving employers, the government, lawyers, and students.

We’re in a feedback loop of financial aid leading to higher tuition, and employers requiring degrees, which leads to higher college attendance, which means more loans, and, hence, higher tuition.

The value of the overpriced liberal arts degree is not in the subject itself, but to signal to employers baseline competence. All else being equal, in the eyes of an employer, a person with a History or Philosophy degree is more valuable than someone without a degree. A degree in one of the more ‘rigorous’ liberal arts subjects (History, philosophy, or English, for example) signals above-average literacy, concentration, and critical thinking skills, all of which are valuable for on-site training. A person who is smarter can learn faster, even if the job is unrelated to the degree. So, the degree acts like an IQ or competency test, albeit an overpriced and poorly designed one. The reason why employers use degrees instead easy-to-administer IQ tests is because of the threat of disparate impact litigation, which is very costly and difficult to fight. Typically, only large companies, like Proctor and Gamble, have the resources to fight these lawsuits, and hence can administer these tests.

There are some solutions:

Overturn Griggs v. Duke Power Co. Without fear of litigation, let companies develop their own criteria for screening for competence.

Replace costly diplomas with SAT scores, IQ scores, or an acceptance letter from a prestigious university. Being accepted to Harvard, Caltech, or MIT signals intellect that is in the top 5% of the population.

No more taxpayer subsided financial aid for non-STEM majors and or low-IQ students. This would guarantee a higher ROI for financial aid and hence lower tuition for everyone. Too bad there is zero likelihood of this happening, particularly making financial aid contingent on having a sufficiently high IQ.

The left complains incessantly about tuition, yet on the grounds of political correctness oppose the solutions that would break the cycle. In the liberal world, it’s better that everyone suffer high tuition fees than to face the reality that maybe not everyone is intellectually cut out for higher education. Instead of confronting the reality that some people are smarter than others, make everyone pay more, to avoid this inconvenient truth. And of course, as Aaron says, shrinking the college industrial complex will mean a lot of unemployed liberal professors.

Neo Masculinity and Christianity, Darwinian Conservatism, Free Will, Biological Reality

An interesting post from Return of Kings:

Why Christianity Is Not An Enemy Of Neomasculinity

I’m not sure who ever said it was. Atheists within the neo-masculinity movement, in contrast to the smug atheists who watch Colbert and Daily Show, don’t have enmity towards Christians. They may not agree with Christianity, but this disagreement is never acrimonious. The author is raising an issue that doesn’t really exist.

But the topic of Christianity and ‘alt right’ politics is interesting. The alt-right movement encompasses a wide variety or mishmash of ideologies and beliefs, with a universal rejection of egalitarianism and liberalism. You can reject religion and still oppose egalitarianism and the welfare state, as in the case of Ayn Ran or Murray Rothbard, for example.

Atheist Conservatism and Libertarianism is one of the fastest growing movements. Contrary to popular belief, Darwinism and Conservatism are compatible because the social order of things often follows from the biological/genetic one, in that social castes and socioeconomic issues (wealth inequity, rich vs. poor, etc) often stem from the biological differences between individuals (race, IQ, etc), meaning that some people by virtue of ‘good’ genes are more likely to succeed, while those with inauspicious genes are likely to find themselves in a lower caste. In agreement with Conservative/Libertarian thought, individuals do have free will – but only within their biological limitations.

You have the free will to try to become a successful physicist or writer, but if your IQ isn’t high enough you won’t get much millage for your efforts. So biology is the ultimate sorting mechanism for man and his role or place in society, and even if the concept of biological determinism is unsettling to many – that millions of individuals are preordained at birth to a life of failure or mediocrity – wishful thinking, vacuous ‘pull yourself up’ platitudes, and political correctness won’t change this. Many atheists understand that evoking a ambiguous higher ‘power’ to try to undo a physical or autonomous process is futile.

These posts may seem negative and pessimistic, but they are in agreement with an empirical reality that is also a biological reality. It’s better to swallow the bitter pill of reality than to live in fantasy. But this should not be confused with a pessimistic view of human nature, as expounded by Hobbes. In the spirit of Locke, I am optimistic about the human condition, as well as the economy, but not for most individual humans – in that while society will continue to advance and prosper in terms of technology and other metrics, and the stock market will keep going up, at the individual level things won’t feel so great, with ennui, anxiety, and emptiness the dominant human condition for the vast majority who are not smart enough to attain ‘enlightenment’. John Locke’s optimism was rooted in his faith, for man to full fill his ‘god given’ potential to create, in contrast to the atheist Hobbes who equates man to animals. There is a middle ground, in that we are in an ‘enlightenment’ for those who are smart and successful enough to participate in it , but a Hobbesian ‘dark age’ for everyone else. The capacity to create does not come from god or some creator, but from genes, which is how Darwinism can be reconciled with the more optimistic, future-oriented worldview of the Enlightenment.

Also many Enlightenment thinkers, from Voltaire to Kant, expressed interest in biological matters such as race, with opinions that would be considered politically incorrect today and an affront to ‘blank slate’ Christianity. Voltaire, for example, rejected Monogenism, which contends that all races have a single origin, while polygenism is the idea that each race has a separate origin. Instead of all people coming from a single origin or creator, some came elsewhere, although it wasn’t until later with the research of Darwin and Galton, and much latter With Murray, Jensen, Rushton, and Lynn, did speculation about race, intelligence, and individual biological differences become burnished with scientific rigour.

But the problem with mainstream/contemporary Christianity (and my own experience going to Church) is that it tends to espouse the ‘bank slate’ pseudoscience that all people are born ‘equal’ under god and that redemption is through belief, when economic reality throws cold water on those delusions. In reality, some people by virtue of IQ and other genetic factors are born ‘better’ than others, and redemption is not as easy as just believing in a spirit, but by quantifiable accomplishments, social status, and the creation of economic value, which I outline in the ‘salvation quadrant’ here. Maybe that’s why the NRx movement argues that progressivism is an offshoot of Puritanism, although this theory is contested by some in the NRx community.

A common rebuttal is that IQ isn’t everything, and it isn’t, but it’s damn important. In the competitive post-2008 economy and recent trend towards automation and the winner-take-all nature of the economy, brains seem to be more important than brawn. The data on wealth vs. IQ is hard to dispute – smarter people tend to earn more more money, while less intelligent people fall into poverty. Smart people also create technologies that improve living standards. Yes, smart people occasionally make stupid decisions, but what kind of decisions do stupid people make? It’s tempting to just cherry-pick a few examples of smart people acting stupidly or unethically to paint all smart people with the same brush. The ‘evil genius’ trope is so ingrained in popular culture that we tend to ignore or overlook all the good that smart people create. Yes, there is evil on the right side of the Bell Curve, but also plenty of evil on the let, too. Gary Ridgway, the most prolific American serial killer, has an IQ of 80. Evil on both sides of the Bell Curve. Even ‘effort’ and ‘hard work’, which the left says is more important than IQ, may also be biological, making it hard to escape the pull of HBD in all facets of society.

I guess we need systems in place to minimize the potential harm caused by morally compromised people. The rule of law is a deterrent, but it can’t undo the past, nor will it effective against those who ignore it.

And although there is evidence smarter people are liberal – wealthy, smart liberals tend to be of the pragmatic/classical/neoliberal variety, with examples being Larry Summers, Bill Gates, Bill Clinton, Steven Levitt, Steven Pinker and Bryan Caplan, in contrast to the less intelligent welfare liberals. Classical liberals are more inclined to subscribe to Social Darwinism than welfare liberals, and are less hostile to free markets, the rule of law, and private property.

Hillary the Lesser of Two Evils

From Canto Talk: The Democrats are really socialists now

That’s right. There is no real difference, and that is not a good path to national election for the Democrats.

President Clinton tried to move the party to the center. He worked with the GOP to pass welfare reform and signed free trade agreements like NAFTA. Clinton understood that the party had gone too far to the left and was losing the middle class.

Perhaps V.P. Biden can put the party back in the middle. At the same time, how can he please the Sanders vote if he does that?

Not long ago, the left mocked the GOP as the party of old guys clinging to their guns and the 10th Amendment.

It looks like the Democrats are the party of old guys (and ladies) clinging to the Great Society and their Woodstock LPs.

In 2008 Hillary Clinton, for all her flaws, was correct about Obama’s inexperience, his softness on terror, his connections with unsavory individuals, and inability to appeal to working, hard-working white males. Obama won despite failing to receive the majority of the white male vote:

Along with Sarah Palin, Hillary at least deserves some credit for exposing Obama for the wealth spreader and Islamic sympathizer that he is. We can poke fun about her email server and pantsuits, but I would rather have Hillary as president than Sanders, and many on the right would also agree Hillary is the lesser of two evils. Bernie Sanders wants to spread your wealth through regulation, entitlement spending, and taxes to those who did nothing to earn it.

The welfare liberals like Sanders want to cling to to the ‘old era’ of overpaid jobs that don’t create enough economic value, whereas some on the right understand that the economy is changing in way where productivity and quantifiable results have precedence over wages and benefits.

NRx and Modernity

When I discuss modernity and my support for it, it is in the context of technology and economics, as opposed to the push towards progressive social and political norms.

As I argue here and here, NRx should embrace technology. The arrow of technology is irreversible. Many on the right wish to return to simpler times, but that may not only be impossible – but it may also be undesirable, as diseases, war, and early mortality were more common in earlier times, which is the crux of Steven Pinker’s argument in his book The Better Angels of Our Nature.

Wikipedia lists some characteristics of modernity:

Increased movement of goods, capital, people, and information among formerly discrete populations, and consequent influence beyond the local area

Increased formal social organization of mobile populaces, development of “circuits” on which they and their influence travel, and societal standardization conducive to socio-economic mobility

Increased specialization of the segments of society, i.e., division of labor, and area inter-dependency

Increased level of excessive stratification in terms of social life of a modern man

Increased state of dehumanisation, dehumanity, unionisation, as man became embittered about the negative turn of events which sprouted a growing fear.

Man became a victim of the underlying circumstances presented by the modern world

Increased competitiveness amongst people in the society (survival of the fittest) as the jungle rule sets in.

The above items are autonomous, meaning that politicians and individuals cannot reverse or control them. They are the byproducts of the natural, inexorable course of the evolution of civilization.

The last two items allude to the rise of Social Darwinism 2.0, with smarter people being the most ‘fit’ in the competitive post-2008 economy. People may be falling behind because of low IQs in an economy that increasingly rewards intellect.

Technology may actually auspicious for the NRx or anti-democracy cause, hastening the decline of democracy and egalitarianism, with IQ and wealth as the new caste system in our hyper-competitive post-2008 economy. Social hierarchies and techno-commercialism can coexist.
Technologists and scientists like George Gilder, Razib Khan, Peter Thiel, Marc Andreessen, and Matt Ridley, who may not necessarily subscribe to NRx, have voiced criticism and skepticism of the various tenets of liberalism, which include democracy, egalitarianism, and concern over anthropic global warming.

The Economic Crisis Is In Brazil and Turkey, Not China

As the media goes on and on about a supposed ‘China crisis’, as if a 1% decline in China’s GDP growth constitutes a depression, Brazil was recently downgraded to ‘junk’ by Standard and Poors, meaning that Brazil’s economy, which is heavily dependent on oil, is doing so poorly that the risk of default can no longer be ignored. I was correct in advising investors to stay away from the emerging markets, and that things would get worse. America is still the best place to invest.

The crisis is in crappy economies like Turkey, Russia, and Brazil – not China. Lets put things in perspective. China’s recent currency devaluation, for all the media attention it got, pales in comparison to the post-2013 plunge in the Brazil Real and Turkish Lira:

China’s currency devaluation looks like a blip compared to the long-standing trend:

CAD, JPY, AUD have fallen compared to the strong USD and CNY.

From CNBC: Brazil economy sinks into worse-than-expected recession

Brazil’s economy shrank 1.9 percent in the second quarter, sinking into a recession that has hammered the popularity of President Dilma Rousseff as she struggles to save the country’s investment-grade credit rating amid a vast corruption scandal.

The quarterly contraction, reported by government statistics agency IBGE on Friday, was bigger than the median forecast of a 1.7 percent drop in a Reuters poll.

The media is overlooking how other countries are in much worse shape than China and America.

There is also a positive correlation between mean IQ and economic success, with smarter countries like China, America, Singapore, Hong Kong, South Korea, and Japan doing better than low-IQ countries like Turkey and Brazil.

Don’t be fooled by purportedly high nominal GDP. Low-IQ countries tend to have high inflation, too, which results is much less real GDP growth. Also lots of corruption, falling currencies, and capital flight.

As shown below, sovereign yields for big economies are falling:

This is why America’s debt is much less of a big deal compared to emerging market debt, despite all the media doom and gloom about America’s national debt. The debt is high, but it’s not a crisis.

Smaller economies like Brazil and Turkey don’t have reserve currency status, which means that the worse things get economically, the more capital will leave those countries, creating a feedback loop of more inflation and a worsening economy. America and Japan are unique in that when there are economic problems, borrowing costs fall – the exact opposite of what happens in smaller economies.

After factoring in inflation and currency risk, there is little to no wealth being created in these emerging markets for investors, whereas investors are getting rich in America with Bay Area real estate and the S&P 500, for example. That’s why so much money from China is flowing into America and its real esate. America not only offers real asset appreciation, but political stability and unassailable property rights, or at least better than in China.

Low-IQ countries can temporarily fare well with commodity exports, but as we saw recently with Brazil, commodity exports tend to be volatile due to speculation, price swings, and other factors, whereas intellectual property exports like software and media, which tend to be the domain of smarter countries, are more stable than commodity exports.

Related: China and The Liberal War on Success