- “Deaths of despair”: A multifaceted analysis
- Four preconditions for a dire phenomenon
- When “social bonds” fail, who (or what) fills the void?
- Mr. Market approves Google’s mass termination
- “Statistics are often mere political tools”… In praise of the Li Keqiang index… And more!
It’s a phenomenon we’ve bemoaned now and then over the years in these virtual pages — so-called “deaths of despair” from suicide and substance abuse.
In 2015, Princeton economists Angus Deaton and Anne Case found that the death rate among white Americans ages 25–54 with no more than a high school education had nearly doubled in only 15 years.
Deaths of despair were the reason that overall life expectancy in the United States was already in decline several years before COVID-19 came along.
The reasons are economic — but not exclusively so.
As Case explained to NPR in 2017, “They don’t have a good job. They don’t have a marriage that supports them. They may have children that they do or don’t see. They have a much more fragile existence than they would have had a generation ago…
“It may be the deaths from drugs, from suicide, from alcohol are related to the fact that people don’t have the stability and a hope for the future that they might have had in the past,” Case says.
This week, a paper circulated by the National Bureau of Economic Research zeroes in on one factor — declining church attendance.
As MarketWatch reports, “The authors noted that many measures of religious adherence began to decline in the late 1980s. They find that the large decline in religious practice was driven by the group experiencing the subsequent increases in mortality: white middle-aged Americans without a college degree.
“States that experienced larger declines in religious participation in the last 15 years of the 20th century saw larger increases in deaths of despair.”
Ture, correlation does not equal causation; wet sidewalks don’t cause rain.
But surely there’s something to the general idea that people start to lose their moorings in the absence of strong families, strong churches, strong communities.
And we’re not talking about just substance abuse and suicide. We’re talking about the entire upending of economic and personal life with the advent of COVID-19.
In that spring of 2020, a psychology professor at the University of Ghent in Belgium named Mattias Desmet started thinking long and hard about the link.
In addition to psychology, Desmet has a background in statistics. He reviewed the apocalyptic computer models from epidemiologist Neil Ferguson at Imperial College London — the ones that prompted lockdown measures in both the United Kingdom and the United States.
Thing is, the models weren’t panning out. Ferguson projected nearly 85,000 deaths in Sweden — which famously did not lock down. In the event, the number was less than one-sixth of that total.
And yet… legions of people in one country after another embraced lockdown. Welcomed it. Couldn’t get enough of it. Shrieked in horror at the thought of reopening schools or shedding masks or — for that matter — allowing others to gather in churches.
The name Desmet gave to this phenomenon is “mass formation.”
A critical mass of people suddenly coalesces around one narrative — and they can’t let go of it. “They become radically intolerant for dissident voices,” he explained last year to The Epoch Times, and “they also stigmatize and ultimately try to destroy the people who do not go along with the narrative.”
➢ In the interest of accuracy: You might have run across articles or interviews online referring to “mass formation psychosis.” That is not Desmet’s term. Others have tacked on that last word. Desmet is describing a social phenomenon, not diagnosing a psychological condition. It’s an important distinction… because the pro-lockdown Establishment media have published a handful of irksome “fact checking” articles making straw-man arguments to the effect of There’s no entry for “mass formation psychosis” in the DSM, therefore it doesn’t exist!
As Desmet explains it, there are four preconditions to mass formation. And the first is — drumroll, please — a lack of social bonds.
You know, the sort of bonds that come from family and church and community.
Here, Desmet drew in part on the work of the political theorist Hannah Arendt, who studied the willingness of everyday Germans to go along with the Nazis’ depredations: “The chief characteristic of the mass man is not brutality and backwardness,” Arendt wrote, “but his isolation and lack of normal social relationships.”
There are three other preconditions…
- A lack of meaning in life, particularly a lack of meaningful work. Think overeducated millennials working as baristas and Uber drivers
- Free-floating anxiety, the type of anxiety that’s not connected to anything in particular. It has no concrete target like, say, economic distress or natural disaster
- Frustration and aggression, again not directed at anything specific — but adding to the sense of being out of control.
“What accelerates mass formation,” Desmet writes in his 2022 book The Psychology of Totalitarianism, “is not so much the frustration and aggression that are effectively vented, but the potential of unvented aggression present in the population — aggression that is still looking for an object.”
Then when something like a pandemic comes along… suddenly these people have a sense of meaning that wasn’t there before. In the absence of meaningful social bonds, they allow themselves to be subsumed into a collective.
Desmet’s analogy is a crowd singing at a soccer stadium: “The voice of the individual dissolves into the overwhelming, vibrating group voice; the individual feels supported by the crowd and ‘inherits’ its vibrating energy. It doesn’t matter what song or lyrics are sung; what matters is that they are sung together.”
And God help anyone who marches to a different tune.
To be sure, mass formation doesn’t tell the whole story of what happened in early 2020.
The American expat writer C.J. Hopkins is extremely critical of Desmet. To Hopkins’ mind, the story is emphatically not about everyday people collectively losing their bearings.
“It is the story of the radical restructuring of society based on lies and official propaganda, executed, globally, through sheer brute force and systematic psychological conditioning,” he writes. “It is the story of the implementation of our new totalitarian global-capitalist ‘reality’ … the ‘New Normal’ that was announced in the spring of 2020.”
From where we sit, the arguments are not mutually exclusive: Yes, the power elite carried out a radical top-down restructuring of society. But it couldn’t have happened without that critical mass of people — Desmet’s estimate is about 20–30% of the population — who were predisposed to comply.
As we see it, 2020 illustrates a truism: The absence of strong families, strong churches and strong communities creates a vacuum — a vacuum that’s inevitably filled by the state.
This was one of the central insights of the 20th-century sociologist Robert Nisbet. He observed that in the year of his birth — 1913 — the only contact most Americans had with the federal government was the Post Office.
But the control freaks and power trippers of the progressive movement acted quickly — the Federal Reserve, the income tax, the nationalization of industry during World War I.
Nisbet’s 1953 book The Quest for Community laments how the burgeoning federal government undermined those “intermediate social institutions” like family and church that lent meaning to social life. As those institutions weakened, “loose individuals” became ever more dependent on the state.
A little over a century later… well, here we are.
What to do? Defy the narrative, says Desmet. It’s the only way.
Because good luck trying to topple the elites. Even if you somehow succeeded, as long as mass formation is in play, “it will recreate the same elite time and time again,” Desmet says in his Epoch Times interview.
“If we can start with thinking a different way, we will see that a new elite is formed and that the elite that exists now will cease to exist in a spontaneous way.”
No, that’s not an instantaneous process. But we daresay it might start with something as simple as forging new social bonds that weren’t there before — getting offline and getting out in “meatspace.” Saying hello to a neighbor you don’t know yet… engaging at a farmer’s market or community festival… finding a group of folks who enjoy the same pastimes you do.
Or… heading to a house of worship, if the spirit so moves you.
Well, that was heavy. How about the markets today?
The major U.S. stock indexes are experiencing an oversold bounce: The Dow is up just under half a percent at 33,174. The S&P 500 is up three-quarters of a percent at 3,929. The Nasdaq is up 1.25%, within striking distance of 11,000 again.
➢ Still, the specter of Federal Reserve tightening looms over Wall Street: Yesterday Fed vice chair Lael Brainard said the Fed has to work harder to get back to its 2% inflation target: “We are determined to stay the course.” These days, Brainard is the only card-carrying liberal in Fed’s inner sanctum. If she says inflation hasn’t been tamed yet, imagine what the others are still thinking.
Unlike with Microsoft earlier this week, Mr. Market is reacting favorably to news of mass pink slips at Google parent Alphabet. About 12,000 people, or 6% of Alphabet’s global headcount, will be shown the door. At last check, GOOG is up 4.5% on the day.
Meanwhile at Netflix, earnings are down and co-founder Reed Hastings is stepping away from his CEO role… but the subscriber count is rising, and apparently that’s all that matters. NFLX is up nearly 7% as we write.
Barring a calamity, gold will end the week over $1,900 — the bid $1,925 at last check. But silver still has some heavy lifting to get back above $24. Crude is up 35 cents to $80.68.
Crypto is holding up very nicely, thank you, in the wake of bankruptcy filings by crypto lender Genesis Global Holdco and two of its lending subsidiaries. Bitcoin is a hair over $21,000 and Ethereum at $1,550.
➢ One economic number today, and it rings in better than expected: Existing home sales slipped 1.5% in December. Still, that’s 11 straight months of decline, and a year-over-year drop of 34%. Prices are down, but inventory is tight — only 2.9 months’ worth, the lowest since June.
To the mailbag, and a European reader’s comment on China’s GDP numbers…
“You are certainly aware that in communist countries, statistics are often mere political tools. When economic growth was high, the Chinese government voluntarily underestimated it out of fear of overheating. In today’s sluggish economy, it’s quite probable that official figures are too rosy. Some less politically sensitive statistics such as electricity use can shed light on GDP growth, but maybe Chinese authorities have also learned to doctor these figures.”
The 5: Ah, you remind us about one of the many wonderful insights we got from the State Department cables spilled to WikiLeaks more than a decade ago.
It was China’s future premier Li Keqiang, describing Chinese economic statistics as “man-made” and unreliable. For the real deal, all he looked at was electricity consumption (ding-ding-ding), rail cargo volume and bank lending.
During the early 2010s, a handful of economists and investment banks sought to construct a “Li Keqiang index” to measure the real health of China’s economy. By 2015, it was losing its allure, on the theory that it didn’t capture the growing role of technology and the service sector in Chinese economic activity.
But according to the analysts at a firm called Sinolytics, COVID and massive stimulus from Beijing are making it relevant again: “Under these conditions, the Keqiang index becomes again more powerful reflecting the overall economic growth amid investment-driven recovery while largely avoiding potential data manipulation issues.”
As calculated by MacroMicro, the Li Keqiang index sat at 4.83 in November — down from a peak of 17.9 in February 2021, and the lowest since the early months of the pandemic.
No wonder President Xi Jinping did an about-face on his zero-COVID strategy.
A brief emendation: After we bragged on Jim Rickards and Dan Amoss for their recommendation of Goldman Sachs put options in Countdown to Crisis, we heard from a couple of Countdown readers who say they missed it: “I did not see this at the time,” says one.
Our bad. It was actually in another Jim-and-Dan trading advisory, The Situation Report. Sometimes even we can’t keep them straight!
Meanwhile, as we go to virtual press, more bad news for Goldman on top of this week’s earnings stinker: The Federal Reserve is investigating its consumer-banking arm called Marcus. Couldn’t happen to a nicer bunch of vampire squids, eh?
Have a good weekend,
Dave Gonigam
The 5 Min. Forecast
