Rise of the Unaccountables – Fat Tail Daily

It’s election silly season, again. But Australia is only following on from the electoral madness of 2024.

Last year alone, half the world had to figure out which party represented the lesser of two evils. And then express “support” for them at the ballot box.

But in the lucky country, you’re not even allowed to avoid the circus. You have to vote.

Not to worry though. No doubt, this time around, the country will get the leadership it needs…wants…deserves…

But if you’ve been wondering why the world’s politics, economy, energy bills, social cohesion, immigration policy, geopolitics, housing, and so much more has all gone so haywire, let me try and show you what’s actually been going on…

To find out why people behave the way they do, you need to ask yourself what incentives they face.

It doesn’t matter what they believe, let alone say they believe. Incentives make hypocrites out of all of us.

It doesn’t matter what’s legal or illegal. As black market cigarettes have demonstrated recently.

It doesn’t even matter what matters. All that matters is incentives. As Warren Buffett’s sidekick Charlie Munger said, “Show me the incentives and I’ll show you the outcomes.” It really is that simple.

So, if you want to know why things have gone completely bizarre in our societies, it’s the changing incentives you need to identify.

And I believe those incentives really have changed quite radically. Whether it’s in politics, business, the civil service or just every-day life…the incentives that used to govern our behaviour have reversed.

To get ahead in sports, you don’t need to train hard or innovate. You just need to change your gender.

To get ahead in media, you don’t need to attract viewers or report facts. You need to provide a comforting blanket of delusion for a subset of the population.

To pump up their share price, a CEO doesn’t need to run their company well. They/them need to adhere to green rules, woke rules, DEI and ESG.

To attract investors, a fund manager doesn’t need to have a clever investment methodology or track record. Just claim to replicate an index, or slap labels like “green” and “ESG” on the tin…before investing in the same companies anyway.

To get ahead as a journalist, you don’t need to tell the truth and expose lies, you need to hide the truth with lies that further a noble cause. As the CEO of the US National Public Radio explained, “truth is a distraction from getting things done.”

To get ahead in politics, you don’t need to run your ministry well. You just need to say that you oppose Trump, whatever he’s been doing and however far away he might be from your own country.

To get ahead as a police officer, you need to avoid prosecuting foreigners or left-wing protestors and vandals.

To get ahead in religion, you need to become political.

“Good” energy policy doesn’t mean energy security or wealth creation. It means making yourself energy dependent on your geopolitical enemies like Germany did with Russia for gas and now renewables for China.

To get ahead as an academic, you don’t need to worry about the replicability of your studies anymore. You only need to publish an abstract that affirms what’s politically correct.

To do a good job as a border agent, you need to house, feed and support illegal immigrants, not stop them.

To get ahead, you don’t need to teach children math or biology, you need to deny them.

To get ahead in the civil service, you don’t need to check your email, go to work, or do any work.

You don’t need to control inflation to get ahead as a central banker. You need to join the

Network for Greening the Financial System. Or, in Mark Carney’s case, found the organisation itself. And look how he’s been rewarded – he’s now the Prime Minister of Canada, despite his green network being abandoned by all and sundry lately.

To get ahead in business these days, you don’t need to run a successful advertising campaign. You need to virtue signal the correct cause.

It’s just as my friend Domini Frisby implied in his exceptional new song: everything matters, except what really should matter:

I thought I would get a promotion.
I’d done a good job all could see.
My boss had a different notion.
This is what he said to me:

Wrong age, wrong sex
And the wrong colour – it’s true, it’s true.
Hard cheese, next please,
Don’t call us we will call you.

Applied for a job at the council.
They’re big on inclusivity.
Could see that they had no intention
Of ever including me.

Wrong age, wrong sex
And the wrong colour – it’s true, it’s true.
Hard cheese, next please.
Don’t call us we’ll email you

I went for a role as an actor
To play an old English man.
They looked at me and they contracted
Some geezer from Uzbekistan.

Wrong age, wrong sex
And the wrong colour – it’s true, it’s true.
Hard cheese, next please,
Don’t call us we’ll email you.

The government needed somebody
To use in their latest campaign,
Explaining the dangers of knife crime
They looked at me and they exclaimed:

Right age, right sex
And the right colour – it’s true, it’s true.
Well done, my son,
Here is a job you can do

And comedy isn’t the only way to deal with how haywire our world has gone. Sometimes, there’s a bit of Schadenfreude…

Reckonings do happen

Not everyone can deny reality…for long.

Car and beer marketing campaigns that undermine the culture of their customers don’t work. Sometimes, people even get fired for trying them.

Most of the ESG movement has been exposed as a fraudulent attempt at greenwashing. Companies are dumping projects like hot potatoes.

The countries that embraced wind and solar have higher power bills. The countries that secured a lot of gas are able to sell it at high prices. Heck, Japan sells our gas at a decent profit!

The energy transition to green energy has really been one of burning coal in Western countries to burning coal in China instead, with factories and jobs moving with it. Including green energy jobs and industry, ironically enough.

Capitalism is a good accountability mechanism. Money doesn’t just talk, it also walks.

That’s why the price of gold and gold stocks are surging now – a signal that something has gone wrong. And a signal that investors need to protect themselves from the fallout.

Sometimes the woke turn on their own because it’s impossible to keep up with the competition of who can virtue signal the most wokeness. What got you to the top of the woke list a year ago can get you into trouble with the woke community today.

And politicians are caught out by their own contradictory nonsense , leading to a bizarre downfall. Australia’s government wants nuclear submarines, but not nuclear power. The EU is struggling to fund its defence spending surge because its ESG rules don’t allow funds to invest in the companies that need the money…

But my point is that in many contexts, reality no longer matters. The link between incentives and outcomes has been broken. A truly extraordinary shift. And that’s what’s making society go haywire.

The moment George Orwell warned about

Delusions can only exist for as long as you can deny their costs. That’s what’s so powerful about how our world has changed. Our leaders in politics, business, culture and media have created a world where they are sufficiently insulated to deny reality and the consequences of their actions.

As Orwell put it, ‘The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.’ But I’m not sure influential people even bother looking or listening anymore.

The woke movement have changed incentives so successfully that people are able to get ahead in life by denying reality, including its consequences. Even the likes of Mao and Stalin were fully aware of the millions they starved to death. But I don’t think the elites realise what the streets look like today.

The leaders of some of the most disastrous and failed woke campaigns of the past end up in the highest positions of power.

Former German defence minister Ursula von der Leyen left the German military using broomsticks as gun barrels during NATO exercises. She became the EU commissioner – perhaps the most powerful politician in Europe.

Mark Carney’s green network imploded just before he became Canadian PM.

Former French finance minister Christine Lagarde was criminally convicted for financial negligence…but went on to become International Monetary Fund and European Central Bank boss.

Right-wing swings at elections in the UK, Germany, Austria and many other countries have resulted in cabinets full of politicians that back even more left-wing policies.

This explains what has gone so wrong. The incentives people influential face have become divorced from the consequences they create. Instead, they are rewarded for delusions.

This works at high levels of power and business because such people are isolated from the consequences. The rich can get richer and the powerful can be promoted to positions of power that are undemocratic.

It all feels rather like The Hunger Games – designed to make us fight each other while they live in a bizarre la-la-land of their own creation.

And, someday soon, it’ll be our turn to participate in the election that affirms it all too.

Meanwhile, back in reality, things increasingly appear to go haywire for the rest of us

GDP per capita recessions destroy our standard of living.

Power bills go up thanks to the introduction of “free” electricity.

Governments fell wind farms to get at the coal underneath.

Stocks lag inflation and inanimate lumps of metal like gold.

Inflation surges far ahead of interest rates.

There are housing shortages across the English speaking world.

Immigration is unsustainable.

Political parties and candidates that win elections don’t end up in government .

Anti-woke political parties and candidates that get too popular are banned by intelligence agencies.

Companies at the centre of the green energy transition go bust.

Incredibly unpopular and unsavoury politicians get elected.

It all seems so absurd…unless you understand how the incentives of the elite have been divorced from the consequences of their actions.

All you need to do to become successful is get a foot in the door by virtue signalling your woke values. The more bizarre the better, because it shows you are desperate and loyal.

And if you manage to join the Club of Unaccountables, you too will be protected from the consequences of your delusions. Your incentives will be to virtue signal, no matter the costs this imposes on those outside the first circle, for you will be kept safe from them.

Somehow, I don’t think they’d let me in. Nor you.

But that doesn’t mean you can’t protect yourself…or even profit from the mess.

Regards,

Nick Hubble,
Editor, Strategic Intelligence Australia