The economy in liquidation mode

By definition income is that subset of consumption which leaves the capital stock unchanged. Consumption that diminishes the stock of capital, that injures the ability of the agent to produce an equal quantity of consumables in subsequent time periods, is not called income. Income is therefore by definition that portion of consumption that is sustainable. Sustainability goes directly to the asset neutrality of the income accounts. 

When you consume out of capital it is not called 'income,' it is called 'liquidation.' When an economy plateaus and the opportunities for growth diminish while the standard of living is high and the asset base is abundant it becomes tempting to shift the economy from growth to liquidation. In order to accomplish this it is a pre-requisite to shift the economy from a P&L accounting to a balance sheet accounting. The easiest way to accomplish such a shift is to financialize the real economy. 

The environmentalists have it wrong. The problem with the US economy is not that it is overly growth-oriented. The problem is it that the US economy is growth-oriented in liquidation mode. We should stop talking about sustainable and renewable technologies and start talking about liquidation policies and an economy that's going out of business. The self-indulgence of the right-wing Boomer is not sex, drugs and rocknroll, it is running the economy in liquidation rather than income mode. Corporate America has moved from power hungry to degenerate. By devising an economic order that depends on the depletion of natural resources for its vitality American corporate leadership has created a corporate culture that disdains the covenantal boundaries of divine grace while at the same time leads to a management style oriented to liquidation and degenerate corporate governance. Once the depletion of the natural resources stopped being able to fuel the growth of the American national economy, the unfettered marketplace shifted to liquidating the industrial base by selling off the asset base through debt and by counting that selling-off as national income. 

The genius of American know-how was the ability to develop management systems for large scale industrial and commercial enterprises which solved the moral hazard problem that comes with principal-agent relations. That genius applied well to an economic order that was growing by leaps and bounds, and had a clear-eyed view of the future. When the economy plateaued and growth opportunities diminished, the problem of principal-agent came back with a vengeance. 

The problem of principal-agent is the problem of unearned power. The agent should function like a steward for the accumulated value embodied in the running of the enterprise. Instead the agent re-directs that value to his private interests. The moral hazard of the over-payed courtier is the manifestation of the parasite. The parasite feeds off of the life nourishment of the host while re-engineering the host to liquidate itself. The opposite of symbiosis is the parasitic relationship. The symbiant honors its own duties to its covenantal partner while it conducts its own affairs and the affairs of the joint enterprise in a life-affirming way. The parasite feeds off of the abundance of its host while it conducts its own affairs in a way that liquidates the system. 

The punishment in Leviticus for violating the covenantal partnership was to turn the people of Israel into parasites that made them feed off of their host cultures. The antisemite reacts against the parasitism of the Jewish people because the antisemite is himself largely parasitic in character. 

The challenge of abundance is the challenge of the principal-agent, it is the challenge of stewardship and trusteeship, of administering what one did not create, of recognizing both one's own merit as well as what was bequeathed from a higher authority. 

The Sabbath day is about the invocation (zakhor) of the creative impulse as a covenantal partnership. The keeping of that institution (shamor) is about the double portion on Friday where abundance also forces the acknowledgement of the covenantal dividing line between Man and God. Because the mannah was a gift (rain, himtir, is a gift) it instantly required the institution of the Sabbath day to manage the challenges and confusions that come from being granted something one did not earn on one's own.