It's a scam.

But not the sort you think it is.

Rather, it has appeared to be "ok" and even "what people want."

It isn't, it never was, it was always a chimera and a lie.

People are jumping on Disney's revelation that they are not going to move a cadre of "imagineers" (their term for the groups that come up with new idea for their parks and such) to the Orlando area from California.  This, people say, is a reaction to DeSantis' feud with Disney, and some form of "corporate payback."

I can't get into the Board's head but this much I can tell you: Either they're about to make a make a mistake that will cost them billions and might cut the company's value in half or more, or that's not what's going on.

I'll take "that's not what's going on" for $1,000, Alex.

Disney, like virtually every other corporation in the United States and indeed worldwide has feasted on negative real interest rates now for more than a decade, and artificially suppressed rates for more than two decades.  So did Universities, Governments, think tanks, lobbyists and myriad others -- along with ordinary Americans.

You probably think that a 3% mortgage is reasonable.  It is not, except in a world where there is zero inflation -- that is, your $50,000 a year salary buys exactly the same amount food, fuel, electricity, insurance, bundles of shingles and cords of word 30 years from now -- or 30 years ago -- as it does today. You've never lived in that world and in fact nobody has since the turn of the last century.

The people from the founding of America to roughly 1913 more-or-less did, however.  There were fits and starts of inflation and deflation, but neither held sway.  People point at fiat currency as an inherent evil but if it is, and is uncontrolled, then so is a metallic (or any other) standard because all can be corrupted and over time all have been corrupted.  Those arguing for a return to that, or a new one (e.g. "digital encrypted currencies") have been and in every case are scammers; they hold it or some interest in it and want to use to abuse you up your rear-most exit.

In a world of 2% inflation -- true 2% -- the price of everything doubles in about 35 years.  The reasonable price of money over 30 years in a world of true 2% inflation is about 5%.  2% for the inflation, 3% for the risk that something terrible will happen to you over those 30 years and you won't be able to pay, and this assumes that when you take the loan you are both young and healthy.  That's right: If you're older than your 20s, obese, have some chronic condition or simply were born with some sort of disability your loan should be more expensive -- by a lot -- because the odds rise precipitously that something bad will happen before the 30 years is up.

Houses are not "assets"; they are in fact durable consumer goods much like a washing machine, car, lawn mower or similar.  They are constructed out of things that require continual input or they turn to dust.  Drive through rural America and you will see plenty of them in the process of being reclaimed by entropy as nobody is continually adding energy-based input to it anymore, a reality that nothing can escape -- including you personally.

Of course that's not what you were sold.

"Easy money" politics is like that.  It allows all manner of uneconomic, stupid things to be done, for a while.  It causes the cost of said uneconomic, stupid things to be paid by other people rather than those who did the stupid thing.  The shifting of said costs is usually (but not always) diffuse, but in every case it happens.  Stock prices go up not because of actual innovation but because there is no limit other than fear on deployed leverage; nobody has to actually make the numbers on a profit basis in real terms so long as the policy lasts.

But in point of fact there is never a free lunch.  As I've pointed out since beginning this column the laws of thermodynamics are not suggestions and they apply to economics -- not only on a large-scale level but personally too.  You can simplify those laws down to three sentences.

• You can't win.  If you believe you can get out more than you put in you're delusional. If you run this trope on someone else you're committing criminal fraud and should be rotting in prison.  There is loss in all endeavors.
  
  
• You can't break even either.  See the first point and it applies to the belief you can get 100% back on whatever you put in.  You can't.  Again, there is always loss.
  
  
• You can't avoid playing, irrespective of knowing you will lose.  You can only choose to lose less or more, and if you do nothing entropy eats all and you wind up as dust.

It never ceases to amaze me how many people will try to argue that there is some exception to this -- especially those with a bunch of letters after their name working in think tanks and unversities.  There is not.  The end of "free money" has led firms like Disney to face reality: There is always loss in all endeavors but you must play or cease to exist and as a result doing things that make losses on top of the inevitable is stupid.

Disney is shutting down their "Star Wars Experience" which was dreamed up by their "Imagineers."  Why?  Because a couple of days in that "experience" for a family of four costs roughly $5,000 and there simply aren't enough wealthy people when you actually must expend effort and pay for same out of your personal surplus after expenses to fork up the money and keep the place open.  In short it is grandiose, kitchy and the market of available people willing and able to pay is too small given the price as soon as "free money" disappears, and it has.

The entirety of "Woke" is utterly dependent on the capacity to shift cost from where it actually resides to someone else and make them pay it.  The reason is simple: If you hire based on anything other than competence you get something less than 100% of what you could get in output.  You are intentionally crippling yourself in order to score political tribal points.

Absent coercion if you do this someone else will destroy you because they will refuse -- and outcompete you.  The firm that produces 98% of its capacity for every dollar put in will lose, every time, to the one that produces 100% of its capacity for every dollar put in.  It will take time before the first firm runs out of both customers and money but it will happen and as a result what inevitably comes with this sort of activity is the attempt to force everyone else down to that same production level.

Contemplate the push for so-called "green energy."  It is not cheaper and more-efficient.  It is always more-expensive and less-reliable.  If it wasn't everyone would choose it voluntarily for obvious reasons.  Is there a trade-off between ecological sanity and maximum output?  Sure!  Dead humans don't buy things, do they?  Poisoning your customers eventually leads to your extinction, so nobody will do that for very long unless of course you can force the customer to take the poison!

Oh, we didn't do any of that in recent memory, did we?

None of this nonsense happens except in a world where you pretend you can violate the laws of thermodynamics.  Societies have often fell into this sort of nonsense and paid for it with their literal lives; Rome did, and ultimately collapsed.  So have many others; Argentina is blessed with some of the richest natural resource deposits on the planet and yet they went from an incredibly vibrant and productive economy to a third-world hellhole with inflation rates approaching and in some cases exceeding 100% a year yet despite screwing basically everyone they have refused to abandon their delusions.

Nothing -- other than a belief in getting something for nothing -- prevents Argentina from returning to a prosperous, productive society.  Their damage is entirely self-inflicted and it has occurred over the last hundred years, despite the fact that the four out of ten citizens are in abject poverty and most of them have never known anything else.  The refusal to stop deficit spending has led to one blow-up after another because the laws of thermodynamics are not suggestions and are not subject to modification, repeal or escape.  You either conform to reality or you suffer the consequences, and suffer they have.

For more than three generations, none of which have learned a single thing.

DeSantis isn't "winning" on Woke, in short, nor is anyone else.  Witness InBev which tried to play a game by bringing in a "marketing executive" who pronounced that their core constituency for Bud Light was "too fratty."

Oh really?  The last time I checked frat houses tend to buy beer by the keg and not one at a time either.

Exactly how many of those customers can you afford to piss off?  Zero, unless you live in a free money world.

Well, we did -- we lived in a large-scale delusion for the last few decades.

Its over.

There are two choices: Either the deficit spending stops or we become Argentina, and by the way unlike Argentina we both have more guns per-capita (and not by a little either) and nuclear weapons.

There never was an argument for "woke" anything.  It was always predicated on intentional damage to score political points.  That's stupid.  It has always been stupid and will always be stupid.

Now it is existential: Either it stops at all levels or our nation fails.