Stupid drives out Smart

Gresham's Law declares that "Bad-money drives out good".

The mechanism for that is pretty simple. Bad money policy causes the local currency to lose value. There is too much "nominal" currency and not enough assets and economic activity to support it. The typical scenario is that the mint creates more money to maintain the illusion of prosperity which further dilutes its value.

Ultimately, the government starts confiscating assets to prop up the currency. They also confiscate or prohibit the movement of assets, including foreign currency, out of the country.

Rich people are often intelligent enough to see which way the winds are blowing. They pre-emptively move their cash and tangible assets out of the country before prohibitions are enforced. Less tangible assets like stocks are "moved" into trusts administered in less restrictive countries.

Stupid drives out Smart

Consider the latest news about large drugstore chains getting hammered by employee walkouts.

Management is under pressure to improve financial performance in the wake of law-suite settlements following prescription opioid addictions and the subsequent O.D.s.

Bottom-lines are further pressured by massive amounts of theft in certain communities while politicians pressure management to NOT close those outlets.

Management responds by increasing pressure on employees. Full-time employees (with benefits) are pressured to work sixty-hours-a-week. Employees unwilling to do that are dropped to part-time status and lose their benefits.

Stores are understaffed. The manager is required to do their job as a manager AND cover for the absent employee.

The less productive employees often have a "card" they can play so they are not disciplined or separated from the company.

The pressure on the productive employees is relentless and keeps increasing.

The pressure ratchets up as the smartest, most productive employees see the handwriting on the wall and leave which dumps the actual work on the remaining, productive workers. Then, they too leave.

The same, identical dynamics are working in large hospitals, especially those in legacy sites in large cities. Staffing issues have become critical.

It impacts at the state level

It is even happening at the state level. California probably has more conservatives within its borders than Texas but has approximately zero representation at the State level.

Policies favor the stupid and the short-sighted.

Productive families are picking up their bags and leaving.

Nations

Copied from HERE

There is a scatter-chart making the rounds on the internet that shows the average IQ of various nations and their per-capita-domestic-product.

The first-order analysis is that the two are highly correlated. Low intelligence makes poor countries and high intelligence makes rich ones.

Something interesting happens after the IQ passes 90. It may be that a critical mass of people has been reached that can grasp concepts like compound-interest. Stupid policies compound. Smart policies compound. The only difference is direction.

If you look more closely at the chart you might notice that the data is not a straight line but is a "hockey-stick". That suggests that something else is at play.

It might be that if you have an I.Q. of 120 and you live in Addis Ababa, Ethiopia that it might behoove you to move to Berlin or London or Myrtle Beach. With an I.Q. of 120 you have more options than your neighbor with the I.Q. of 85 and you likely can compute the economics of moving. This applies quadruple if you are not a member of the ruling, Kleptocracy family and times-ten if you are a woman.

The United States benefited HUGELY from this phenomena. Many of the scientists who worked on the Manhattan Project, for instance, were not born in the United States.