Divergence; Dow Skyrockets and Wages Stagnate for Decades

 It was remarkable when President Obama compelled Democrats to renew the Bush II tax cuts, and only Bernie Sanders voted against it. Social Security is set to become insolvent in five or six years, and politicians are paralyzed regarding fixes. Making everyone contribute a proportionate amount of income would fix it, yet the rich are effectively exempt. The populace has become used to not taxing the rich proportionately or even progressively and instead letting public debt accumulate — and that does not even make up for the loss of tax revenue.

The Dow has risen more than 1,566% since the end of the Cold War, while U.S. median income has risen only about 30%. Wages are largely stagnant or even in relative decline, while the concentration of wealth has reached levels not seen in human history — except perhaps in the British Empire at its peak.

A nation needs its rich to participate with an egalitarian spirit politically. Sharing the economic burden should be a privilege for the rich. The ancient Spartan system that Plato and Socrates so admired — which they saw as a model for the Republic, with a few tweaks such as placing a pair of philosophers as kings in the ideal society — was remarkably egalitarian.

Capitalism does value individual enterprise, yet lacking public egalitarianism and realism, it promotes accumulation beyond a rational level, even to the detriment of a nation’s economic well-being and that of its citizens. It is not a guaranteed “basketball Jones” that makes a virtue of greed. There is no formula that exempts the citizenry from having an adequate level of economic realism, such as pure greed for its own sake asked Gemini about that-

Gary- Could the Dow be over-valued? I recall when it was at 3000-5000 just before the end of the cold war. Now it often reaches 50,000, yet wages haven’t gone up an order of magnitutde to keep pace. How has the Dow become hyper-inflated while wages have stagnated adjusted for inflation since the end of the Cold Wat and for men in the U.S.A., since the 1970s?

Could the stock market crash without the economy crashing. A downward adjustment to 25,000 would be regarded as a crash yet it would seem more of a rectification to me.

Gemini-The divergence between the Dow Jones Industrial Average (DJIA) and typical American wages is one of the most significant shifts in modern economic history. While the Dow has climbed from around 3,000 in 1990 to nearly 50,000 today (an increase of ~1,566%), real median household income has grown much more slowly, rising from roughly $64,000 in 1990 to about $84,000 in late 2024 (inflation-adjusted, ~31% growth). 

Why the Stock Market Outpaced Wages

Several structural factors have caused the Dow to "hyper-inflate" relative to labor earnings:

• Capital vs. Labor: Since 1980, the return on capital (stocks, real estate) has consistently outstripped the rate of overall economic growth, while the link between worker productivity and pay has largely severed.
• Global Corporate Profits: The Dow tracks 30 large, multinational corporations. These companies can increase profits by expanding into global markets or cutting domestic labor costs—actions that boost stock prices even if U.S. wages remain flat.
• Monetary Policy: Decades of low interest rates and "money printing" (quantitative easing) have driven investors toward stocks to find returns, inflating asset prices.
• Declining Labor Power: Factors like globalization, automation, and the decline of unions have reduced the bargaining power of workers, particularly men in manufacturing and trade sectors since the 1970s. 

Could the Market Crash Without the Economy?

Yes, it is possible. A "stock market crash" is a sudden, sharp decline in stock prices, while an "economic crash" (recession) is a decline in actual production and employment. 

• The "Rectification" Scenario: If stock prices have become detached from the underlying earnings of companies, a major drop (like your suggested move to 25,000) could be seen as a "valuation adjustment" or "rectification".
• Historical Precedents: In 1987, the Dow fell 22.6% in a single day (Black Monday), yet the broader U.S. economy did not enter a recession immediately afterward.
• The Wealth Effect: However, a massive crash often triggers an economic slowdown because it reduces consumer confidence and makes it harder for companies to raise money for expansion. 

Comparison: Dow vs. Real Wages

Metric	Late Cold War (c. 1990)	Current (April 2026)	Approximate Growth
Dow Jones (DJIA)	~3,000	48,185	+1,500%
Real Median Household Income	~$64,000	~$84,000	+31%
Real Median Male Earnings	~$47,000	~$60,000	+28%

Note: All income figures are adjusted for inflation to current 

Gary- P.S. (edited by Grok) With the world increasingly splitting into competing economic blocs amid sanctions, wars, and shifting alliances, the Dow — which has risen dramatically on the back of overseas investment and globalization — may face a significant downward rectification. A correction toward the 25,000 level is conceivable if multinational profit streams shrink and supply-chain costs rise under deglobalization pressures. At the same time, a more secure-border, domestically focused U.S. economy could see genuine improvements: tighter labor markets potentially lifting wages for many workers, reshoring of manufacturing, and broader economic realism that reduces reliance on public debt and overseas leverage. Whether this decoupling occurs smoothly remains uncertain, but the era of easy global gains for asset prices while median incomes stagnate appears to be ending. A nation that encourages its wealthy to share the economic burden proportionately would be better positioned for sustainable prosperity.

Prospects for Continuing Ukraine War Upgraded with Orban's Loss in Hungary

 Hungary's Prime Minister Viktor Orbán is out after 16 years in office. The opposition party has won a super-majority, and a new Prime Minister is taking office: Péter Magyar (whose surname means "Hungarian" — "magyarok" is the Hungarian plural for Hungarians/Magyars). The people who have lived in Hungary since approximately 896 A.D. are known as Magyars. The populist Orbán was defeated by a rival populist with a different cultural spin.

Viktor Orbán was a supporter of the Russian position in Ukraine and blocked a €90 billion (roughly $103 billion) EU loan to Ukraine that was intended to buy weapons and sustain the war effort for a couple more years. In recent months, Ukraine had been reluctant to repair the war-damaged Druzhba pipeline carrying Russian oil to Hungary and Slovakia. In March 2026, President Zelenskyy stated he would prefer not to restore it, citing the dangers of Russian attacks on repair crews and questioning why Ukraine should prioritize a pipeline benefiting a hostile actor. Hungary and Slovakia accused Ukraine of using the disruption as blackmail. Under pressure and through European Commission mediation, Zelenskyy later agreed to complete repairs by this spring with EU assistance, though he noted he could not guarantee the pipeline's safety from future attacks during the ongoing war. With the change in Hungarian government, Budapest is now likely to drop its objections and give its assent to the EU loan.

With the price of oil currently rather high — about $102 per barrel — Russia will continue to see increased revenue from selling more oil to Europe once flows resume.

Western European diplomats are the fundamental problem in reaching a conclusion to the war. Instead of loaning €90 billion for more destruction and death in Ukraine and Russia, settling the war directly — with borders largely in place except for a Ukrainian withdrawal from the Donbas — and investing that €90 billion in rebuilding Ukraine and Russia with new technology would be far preferable. Western European leaders, however, believe that Russian control of former Russian Imperial then Soviet areas in Ukraine (seized since 2014 when Russia was relatively stronger, not in 1991) is so advantageous that they are willing to spend at least a trillion dollars and risk World War Three to secure it, station troops, and deploy hundreds of thousands of AI-equipped drones on the western Russian border.

That paradigm is illogical, especially given the opportunity cost: the loss of peace, prosperity, and swift ecological-economic reconstruction of the region if forward-thinking eco-economists and ecologists are given real input.

Patch Paradigm for 2033 Social Security Insolvency

 A patch made by Gemini and I today; Social Security is heading toward a "cliff" in the early 2030s. If we do nothing, everyone—including the poorest seniors—faces an automatic 23% benefit cut. Most politicians argue over a binary choice: slash benefits for everyone or hike payroll taxes on every worker.

We’ve been crunching the numbers on a third way. By combining surgical "means testing" with a lift on the high-earner tax cap, we can protect the most vulnerable and buy the system at least 30 more years of solvency without raising taxes on the middle class.

The 4-Pillar Strategy

Our plan moves away from a "one-size-fits-all" entitlement and toward a system that prioritizes those who truly rely on it to survive.

1. The "Success Cap" (Means Testing at $50,000)
We propose a hard income cutoff. If an individual’s annual income from all other sources (pensions, IRAs, investments) reaches $50,000, their Social Security benefits stop for that year. While this only affects a small percentage of high-wealth retirees, it ensures the fund isn't subsidizing those who already have a comfortable private safety net.

2. Reducing Benefits for the Top 30%
The current benefit formula is already "progressive," but not enough. We would adjust the "bend points" to slow the growth of monthly checks for the top 30% of lifetime earners. This generates significant long-term savings by focusing payouts on the middle and lower brackets.

3. Lifting the Payroll Tax Cap
Currently, income above $184,500 (for 2026) isn't taxed for Social Security. We would lift this cap, applying the 6.2% payroll tax to all earnings. Crucially, to maximize savings, these extra taxes would not result in higher benefit checks for those high earners later on. This is the "engine" of the plan, closing over half of the funding gap on its own.

4. The "Poverty Floor" (20% Boost for the Most Vulnerable)
We don't just want to save the system; we want to make it better for those at the bottom. We propose increasing monthly benefits by 10% for the poorest 20% of retirees. This ensures that while we ask the wealthy to step back, we are actively lifting the most vulnerable seniors out of poverty. Social security is a social insurance program rather than a direct savings account.

Does the Math Work?

By combining these four measures, we create a "Progressive Rebalance." While increasing benefits for the poor costs money, the savings from the $50k means test, the top 30% reduction, and lifting the tax cap more than offset it.

The Result: This plan likely pushes the "insolvency date" from 2033 well into the 2060s. It isn't a permanent 75-year fix (which would likely require a small 1% tax increase for everyone), but it is an approximate 30-year patch that keeps the promise of Social Security alive for the next generation without touching the paychecks of average working families.

The European Union Doesn’t Sympathize with American Concerns About a Nuclear Iran

 The European Union hates President Trump. Apparently he isn’t enough of a malleable unit to their liking, and so they wish they had Joe Biden or a reasonable facsimile as President. The EU hates the Iran war because it makes oil prices rise. Even though the administration and Israel have real concerns about Iran developing nuclear weapons, the EU doesn’t care. They just want cheap oil and hate Donald Trump.

So I asked the well-known world geopolitical strategic analyst Dr. Hyrim Pinkerstrom what the likely outcome of the Iran war fallout between the U.S.A. and the EU will be.

Wasabi Tabasconi: Will N.A.T.O. remain a strong bulwark against Soviet Russians?

Dr. Pinkerstrom: No, not at all. The U.S.A. will no longer defend Europe from anyone—not even nuclear threats.

Wasabi Tabasconi: Winston Churchill said the only thing to fear is fear itself; are you afraid of the EU losing that courage? Cynics have commented that the only danger to Europe is Europe itself.

Dr. Pinkerstrom: Of course not. With the United States gone from interfering in continental affairs, the world will become a more peaceful and prosperous place. Germany and Japan will develop nuclear weapons and France will increase its stockpile, transforming from a force de frappe to a force de défense active. A number of peace agreements between Germany and France, and Britain and Japan, will assure responsible use of nuclear weapons in case of insult to the security interests of the greater co-prosperity sphere.

Wasabi Tabasconi: Germany and Japan were once enemies of the United States. To this day, many Americans oppose them having nuclear weapons just as strongly as they oppose Iran getting them.

Dr. Pinkerstrom: Some Americans harbor prejudice against Germany and Japan possessing nuclear weapons—racism still lingers in high places. The world would actually be far safer with a more multi-polar distribution of nuclear bombs. No one would feel jealous or underprivileged.

Wasabi Tabasconi: The former enemies of the United States that are regarded as American allies now are becoming alienated and siding with Iran in the present conflict. The media and deep establishment of the United States have regarded Russia and China- former allies, as enemies today. Where is the logic of trying to be consistent regarding positions of 'nembranes' flowing in different relative directions?

Dr. Pinkerstrom; You must be joking. Differential calculus of AI has solved that problem in Hilbert Space

Wasabi Tabasconi: I suppose Iran will be allowed to develop nuclear weapons too in order to increase the balance in favor of peace?

Dr. Pinkerstrom: That would be the best way to keep the peace globally. Iran, Pakistan and India are the leading edge of peaceful nuclear programs. Wars occur only through failures to recognize that Europe has need of cheap oil, as British P.M. Starmer commented recently: ‘I am sick of Donald Trump’.

Europe is in the Middle of Confusion Without Clear Goals (Besides Expansion)

The Trump administration should realize that Iran and Ukraine both stall for time, using that interval to seek political leverage and acquire additional weapons.

Europeans often appear as a confused lot, struggling with a diluted sense of national identity that leaves them uncertain about what truly serves their long-term interests as Europeans. Historically accustomed to conflicts with fellow nations, they seem to have elevated that pattern through the structures of the European Union. In effect, President Clinton handed Ukraine over to Western Europe, yet Western Europe shows little willingness to release it or share it with Russia—its rightful owner in this view.

The American left similarly seems adrift, lacking coherent leadership or a clear vision for the future. What it pursues as a rational agenda often resembles treason in practice: prioritizing foreign interests over American ones, or aligning with the political goals of European leftists at the expense of U.S. priorities. Democrats and Governor Newsom appear ready to tolerate a Mexico influenced by drug cartels rather than firmly defend U.S. borders. They frame basic measures like requiring a valid state or federal ID for voting as “voter suppression.” Ukraine and Iran, in turn, skillfully exploit these internal divisions and anti-Republican reflexes.

Europeans, one might reflect, fail to grasp that they themselves have become a primary force of division in today’s world. By contrast, America has achieved relatively good race relations in recent decades, with equal opportunity and wages largely normalized—yet partisan animosity persists. European leadership prefers to direct its hostility toward Russia rather than pursue a pragmatic sharing of Ukraine. Driving a wedge between the West and Russia risks isolating Europe and the United States from deeper BRICS economic integration, while encouraging the growth of a parallel rival market.

Recent European efforts to restrict Russian oil tankers—potentially blocking access through the North Sea, English Channel, Black Sea, and Mediterranean—illustrate this confusion. Such measures could easily backfire, leaving Europe itself more vulnerable to energy shortages by cutting off its own supply routes. Uniting Russia, China, France, and Spain in opposition to the United States and Western Europe hardly seems like a strategic masterstroke. This outcome stems largely from Western Europe’s reluctance to compromise on Ukraine, perhaps along approximate Dnepro boundaries.

It remains possible that, in a future crisis, the United States might withhold support for European defense and opt for neutrality rather than risk entanglement in a World War Three on the continent. Letting Europe burn and not rebuilding it with another Marshall Plan would confer economic advantage onto Americans rather than Europeans.

Alternatively, a more circumspective path—sharing Ukraine equitably, renormalizing relations with Russia, and fully integrating it into the Western economic sphere—could offer the surest route to lasting peace in Europe and beyond. Deep economic interdependence provides a powerful form of transparency and deterrence: it becomes far more difficult to conceal war preparations when potential adversaries are daily business partners. History shows that rhetoric against a designated foe often escalates dangerously in the absence of such ties, as seen in German propaganda leading up to Kristallnacht and the Holocaust.

Bringing Russia into comprehensive economic integration with the West would likely serve as the strongest bulwark against renewed Muslim terrorism and any Chinese adventurism toward Taiwan. After all, China’s leadership appears foremost concerned with raising the living standards of its citizens. Detached somewhat from both Russia and the West, Beijing would be far less inclined to gamble its economy on a high-risk conflict over Taiwan.

Europe Chooses Iran's Felony Edge Over Strait of Hormuz Instead of Rule of Law

Iran’s selective closure of the Strait of Hormuz—allowing passage only to nations that pay a tribute of $2 million per ship and/or are allies or not regarded as supporters of the United States’ and Israel’s war on Iran—is testing the willingness of the world’s nations to enforce international maritime law. So far, except for a few nations including Israel, the United States, and a few Persian Gulf allies, no one seems interested in enforcing it.

It is illegal under international law for any party to stop civilian ships from passing through the Strait of Hormuz. With Iran on one shore and Oman on the other, Iran holds a clear geographic advantage. Oman tries to remain neutral out of fear of Iranian invasion, as Iranian positions are just 30 miles away. Since Oman would be the natural, logical location for gun emplacements (think The Guns of Navarone) to keep the strait open for non-Iranian vessels—by threatening to blast Iranian positions with modern artillery—it will be challenging for Oman to stay truly neutral. Perhaps Saudi Arabia will eventually buy Oman.

European unwillingness to enforce gross violations of international maritime law is an indicator of their preference to pay tribute to—or cooperate with—Iran rather than enforce laws as a matter of principle. Europe is like the merchant that pays protection money instead of funding law enforcement. Europe’s choice is like the “defund the police” movement in the United States. They feel safer by paying tribute to nations able to control key global waterways rather than fighting to keep them free. The United States could have let Germany win the First and Second World Wars and Communist China take South Korea by remaining neutral, if it had wanted to follow Europe’s example. Europe may tolerate Chilean gun emplacements to control the Strait of Magellan, Moroccan artillery and mines to control entry to the Mediterranean Sea, New Guinean control of the Torres Strait with help from China, Indonesian tolls on the Strait of Malacca, and joint U.S.-Russia and Canadian control of the Northwest and Northeast Passages as Arctic ice continues to melt. Europe has shown callous disregard for U.S. and Israeli security and believes the United States should have allowed Iran to develop nuclear weapons and missiles to attack Israel and the United States.

It does seem that the world is largely choosing to ignore international law when it is convenient to do so. The issue of war does not entitle a nation to unilaterally stop free passage of shipping through international waterways by force, except perhaps against opposing force vessels. Here are the reasons why Iran’s practices of mining the Strait, charging a toll, and attacking neutral civilian shipping are illegal. Europe’s preference to attack or seize Russian vessels or ships of other nations carrying Russian oil to market is consistent with the principle of rule of force, piracy, and fealty to perpetrators.

Gemini-"Blocking international waterways like the Strait of Hormuz is illegal under international law, specifically the UN Convention on the Law of the Sea (UNCLOS), because they are recognized as essential straits used for international navigation. Under international law, such straits are governed by a "right of transit passage," which guarantees that ships of all countries have the right to freely navigate through them, meaning coastal states (like Iran and Oman) cannot legally close or suspend this passage.

Key Reasons for Illegality:
UNCLOS Articles 37-44: These articles dictate that all ships and aircraft have the right of transit passage through straits used for international navigation.
The Law of the Sea: While territorial waters extend into the Strait, the right of passage cannot be suspended for innocent transit, and blockades are not permitted in international straits.
Economic Impact: The Strait of Hormuz is a critical global artery, with roughly 20% of the world's oil consumption passing through it, making its blockage a violation of international economic stability.
Prohibition on Threats: International law prohibits the use of force or threats to block or harass commercial ships navigating these crucial waters.

While bordering countries like Iran can regulate navigation for safety or act against threats within their waters, they are restricted by this international legal framework from closing the strait to international traffic."

As of April 2026, Iran is restricting the Strait of Hormuz by forcing ships into a "tollbooth" system, demanding passage fees, conducting vessel inspections, and creating navigational risks with alleged mine laying. These actions violate international law, specifically the UN Convention on the Law of the Sea (UNCLOS) article on freedom of navigation and transit passage, by disrupting the movement of roughly 20% of the world's oil. 

Actions Violating International Law 

• Imposing Illegal Tolls: Iran is demanding payment for passage through the strait, which experts state violates maritime law and customary freedom of navigation.
• Forced Rerouting and Inspection: Iran has established a "tollbooth" system, forcing vessels, particularly those departing from the middle of the strait, to deviate to its Larak Island for inspection and extortionate, forced "service" charges.
• Laying Sea Mines/Attacks: Iranian Revolutionary Guard Corps (IRGC) have been reported to be laying mines and attacking commercial vessels, creating an insecure environment and restricting transit.
• Limiting Daily Transit: Under a self-imposed "ceasefire" arrangement, Iran has restricted the number of vessels permitted to pass through the waterway daily. 

Legal Violations Explained

• Freedom of Navigation: The actions violate the principle of "transit passage" and "innocent passage" for ships that do not threaten coastal states, as established by UNCLOS.
• Right to Transit: While Iran has not ratified all parts of UNCLOS, it is bound by customary international law regarding the right of innocent passage.
• Military Action: Striking commercial ships and restricting civilian traffic is illegal, as international law limits a nation's right to defend itself to military targets. 

These actions, taken in response to the war with the US and Israel, have created significant global economic disruption and blocked critical supply routes

 

Preponderantly, Western Europe Doesn't Support of Defend Rule of Law Over Strait of Hormuz

 Western European nations don’t support the rule of law over international waters. The Strait of Hormuz is an international strait and it is illegal to force ships to pay protection money to pass it. Western European nations; especially France, are willing to pay tribute to Iran to let their ships pass, rather than to make the least effort to defend the rule of law that would also be convenient for them in this case.

Iran's ten point 'peace plan' is loaded with criminal propositions that make it implicitly void. It is interesting that the media and governments seem to be ignoring the illegality of Iran's document. Illegal contracts are invalid. Iran can't charge tolls over international waters.

Gemini summarized the rule of law paradigm for the Strait of Hormuz…

Gary-Isn’t the strait of hormuz supposed to be free to transit according to international maritime law?

Gemini-Yes, under international maritime law, the 

Strait of Hormuz is considered an “international strait” that should be free for transit passage. However, this legal status is currently at the center of a major geopolitical dispute involving differing interpretations of the law. 

1. The Right of Transit Passage (UNCLOS)

The primary framework is the United Nations Convention on the Law of the Sea (UNCLOS), which established the Transit Passage regime. 

• Non-Suspendable: Unlike “innocent passage” in other territorial waters, transit passage through international straits cannot be suspended by coastal states, even during armed conflict.
• Unimpeded Access: All ships and aircraft enjoy the right to continuous and expeditious passage without needing prior permission.
• Prohibition of Tolls: Article 26 of UNCLOS explicitly prohibits states from charging fees for mere passage. 

2. Iran’s Legal Counter-Argument

Iran’s position challenges this global consensus based on its specific treaty status: 

• Non-Ratification: Iran signed UNCLOS in 1982 but never ratified it. Tehran argues that transit passage is a “quid pro quo” for treaty members only and does not apply to non-parties.
• Innocent Passage vs. Transit Passage: Iran maintains that only the more restrictive Innocent Passage regime applies. This would legally allow them to:
  • Require prior authorization for warships and submarines.
  • Temporarily suspend passage for national security reasons.
• Wartime Justifications: Recently, Iranian officials have argued that ongoing hostilities (the 2026 Strait of Hormuz crisis) allow for “wartime rules” that supersede peacetime treaties. 

3. Current 2026 Crisis Developments

As of April 2026, Iran has taken several steps that most legal experts from organizations like Just Security and TRT World view as violations of international law:

• Selective Passage: Iran has reportedly blocked ships linked to the U.S., Israel, and their allies while allowing “friendly” nations like China and Russia to pass.
• Transit Tolls: Reports indicate Iran is drafting legislation to charge tolls (reportedly up to $2 million per transit) for “maritime security” services.
• Naval Mining: Allegations of naval mining have surfaced; while not strictly illegal in war, mining an international strait in a way that blocks neutral shipping is widely considered a violation of the San Remo Manual and Hague Convention.