The current economic crisis, one that is about to become a world political and then a global social crisis, i.e. world war and then global revolutionary moment,  is badly understood by the vast majority of economic social and political pundits in the mainstream media and Academy.

That is not to mention that the current distress is badly understood by citizens and investors.

My rich friends often ask what stocks they should buy; they should really be thinking stocks of weapons.

We are going off a populist bureaucratic cliff, about to be destroyed by the institutions that we thought would scientifically solve all our problems.

That idea, the organizations could bring about the Kingdom of Heaven on Earth was the real fatal conceit of the 20th century; Hayek's critique of Socialism was just a subset of the bigger macro problem.

Oswald Spengler would understand what was happening now, because he was right that the intensive development of Western Civilization was reaching a climactic phase in Populist Bureaucracy that must be followed by the Period of the Warring States of the Extensive phase of Civilization, which is Imperialism and its associated Populist Caesars.

The Caesars are now here, although Hitler, Stalin, Mao, Kim, Castro, Churchill and Ho were a start, and  some of the more important names are Hu, Putin, Barrack, Chavez, Sarkozy and Netanyahu, and Kim II.

This lack of understanding about the nature of the curent Collapse is not the aforementioned parties fault, because what has happened has been a process actually centuries in the making in the sense of Spengler, and it has subtly but irrevocably altered patterns of human thought that make it impossible for all but the most stubborn/crazy to see the train wreck in its totality.

The mental wards are full of people who understand reality; it is the bureaucratic implosion that is about to be the funny farm.

The reason for this paradox is that we have all been institutionalized by the organizations we set up to scientifically solve all our problems in especially the late nineteenth and early twentieth centuries.

Unfortunately, those inside of these institutions have had by their nature to swallow the same Kool Aid, so they are now on auto-pilot, in cahrge of golems.

The modern corporation responsive to the whims of the stock market, the modern research university and modern media corporation responsive to respectively academic fad or popular delusion of the day, and the Federal Reserve System with fiat money and Stratcom with nuclear weapons are all golems, and they are getting to bite all at once.

Why?

Fortunately, or unfortunately, depending on one's view about cataclysmic and violent change, the second law of thermodynamics applies to organizations as well.

All our organizations have run out of gas at the same time, and so therefore the entire social order must die and be reborn.

If John Boyd came back, he would understand.

Max Weber worried about this, death by organization, and it turns out he was right.

Veblen would see this current disorder and laugh out loud, like, "This is so obvious. How can you in the media not talk about this? How do you sleep at night?"

What we are witnessing therefore is no garden variety recession, but rather the total re-setting of a social order via a death process.

That social order that is dying is best characterized as Bureaucratic Populism which developed late in the nineteenth and early twentieth century, in which bureaucratic entities would provide supposedly scientific solutions to demands posed by the public or more especially over time to demands created for the public via economic, social or poltical marketing campaigns: here think campaigns for toothpaste, climate change and wars with the enemy du jour.

Note at this juncture, that the modern corporation is a replacement for the Market; it is a bureaucracy, one of the ones surrounding us, like the Blob.

The power of the corporation means that it by and large creates demand for its goods as much as it supplies demand.

This is what Chandler called the Visible Hand.

 Note at this juncture as wee that a university is a social bureaucratic organization.

This system of bureaucratic populism of corporate, social and economic bureaucracies dates in many Norhtern European nations to well before of the last world war, think of Bismark's provision of Social Insurance, but certainly in any event an constitutes an accurrate description covering the vast majority of the Advanced Industrial World since during the First World War for the participants and afterwards for everyone else.

Thus, there is much discussion of Markets versus Government in the public debate over the stimulus that actually really misses the point.

The question in the United States since at least the 1920's really has not been whether or not the Market or the State should allocate economic resources, but rather an allocational choice of whether resources, including capital, should be allocated by the bureaucracy of a Privately Owned Corporation, or the bureacucracy run by the appointees of elected officials who are insulated at the employee level by civil service protections and that in toto we call the government, or the bureaucracies of various non-profit institutions who are accountable to... I can't tell in the case of colleges, although the maximization goal seems to be administrative over-head and the leisure of the staff on the basis of casual empiricism.

The key in all these bureaucracies is the agency question, and it is now terminal in character.

The agency question is the question of how one gets people to do what they are supposed to do: presumably maximize profits for share-holders of a corporation, maximize the welfare of students in a University, maximize the welfare of the citizenry.

I submit that within at most 30 months, but probably a lot sooner, it will be patently obvious that all three types of institutions have suffered a total collapse.

Why?

Because Privately Owned Corporations have run amok with the Agents of Senior Management wrecking the capitalist system for short run gain.

That is a dead order now, as they now have zero credibility.

Why?

Because the federal government is about to trigger a hyperinflation and a dislocation of what is left of the Price Mechanism in its attempt to combat the economic problem.

The federal government is bankrupt in an inter-temporal sense, it has a net worth of minus $30 trillion, and its response to the crisis is to print money and spend like it is going out on a drunken Keynesian orgy.

Why?

Because of the banruptcy of the federal governmental, said  government is now being stalked by Great Powers who are undergoing their own collapse. This is why subs and satellites are crashing into each other a lot lately; Great Powers Colliding, Shape of Things to Come.

That is why the economic crisis will become political  in character shortly, because the national security bureaucracies are golems, with Big Fangs.

As to the proof of the collapse of social institutions, the University, what Veblen derisively referred to as the Ultimate Depravity, (his publisher told him to dial it back and just use sarcasm when calling the University the Higher Learning) has missed this entire unravelling, because none of the social scientists that were supposed  to train people in the organizational Nirvanna of the future know what is going on, because they have been institutionalized, because they are mentally ill in effect without realizing it, presiding over measures that they mean to help, but will actually be fatal in character.

The general proof?

In a dynamic systems theoretical sense, if a system is controllable, which is to say dynamically stable, one can predict as closely as one likes the effect that a given cause will have, which means that small causes have small effects.

When dynamic systems are unstable, one cannot say what the effect of any particular cause will be, because there is not a stable relationship between causes and effects. Small acts can have dig consequences and lead to phase changes/new attractors/Sarajevo moves to world war and world revolution.

The world economic system is clearly dynamically unstable: look at the price of oil.

Yet the fearless leaders of our populist bureaucracies promote ever greater actions economically, socially and politically; since they cannot by definition in general know the consequence of what they are doing, they must be randomizing their acts in an unstable system orbit, which means that, with Probability One, the system must collapse.

QED.