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Fiat News in Action

Summary:
It wasn’t enough for ProPublica to do actual news reporting by publishing these tax records. The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax No, they had to tell you how to think about their news reporting. They had to turn news into Fiat News by constructing a metric of “true tax rate” based on unrealized capital gains, because … you know … the actual true tax rate just wasn’t damning enough for ProPublica’s purposes. To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.We’re going to call this their true

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It wasn’t enough for ProPublica to do actual news reporting by publishing these tax records.

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax

No, they had to tell you how to think about their news reporting.

They had to turn news into Fiat News by constructing a metric of “true tax rate” based on unrealized capital gains, because … you know … the actual true tax rate just wasn’t damning enough for ProPublica’s purposes.

To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.

We’re going to call this their true tax rate.

What is Fiat News? It’s the presentation of opinion as fact. It’s an interpretation of factual events projected with the same authority as the factual events themselves.

Fiat News (in this case the opinion that wealth in the form of unrealized capital gains should be taxed) is to hard news (in this case the tax filings of the very wealthy) what fiat currencies are to hard currencies.

We write a lot about Fiat News. Here’s the money quote from the note that started it all, Fiat Money, Fiat News:

There’s really no such thing as “real money”, i.e., gold and silver as a medium for exchange or a store of value, in existence in the world today. That used to be the meaning of gold, but those days are long gone. Today fiat money completely and utterly dominates all global commerce and exchange. Why? Because it supports the existential aims of government: taxation (sovereignty), price control (stability), and liquidity provision (growth). Without the invention of fiat money, global GDP today would be at … I dunno, maybe mid-18th century levels? Something around there, I’d guess.

Fiat news serves exactly the same existential aims of government, just in a less overt (but more powerful for being hidden) fashion. There’s just too much at stake for status quo regimes, what with modern referenda like Brexit and national elections like we just experienced in the U.S. and are forthcoming this year throughout Europe, for regime institutions to do anything other than double-down in their embrace and promulgation of fiat news.

Ten years from now we will be awash in “news” to a degree that we can hardly imagine today. That’s what happened with fiat money, and that’s what I think happens with fiat news.

The exponential growth in fiat news is still ahead of us, not behind us.

Gresham’s Law: bad money drives good money out of circulation.

Hunt’s Law: fiat news drives hard news out of circulation.

— Ben Hunt | June 8, 2021 | 9:42 am

About Ben Hunt
Ben Hunt
He is the chief investment strategist at Salient, a $14 billion asset manager based in Houston and San Francisco, and the author of Epsilon Theory, a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators read Epsilon Theory for its fresh perspective into market dynamics.

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