Yves here. The hostility that Richter describes against Twitter in San Francisco is real. I got an earful from my website designer a month ago. She had the misfortune to rent an apartment in what she described as a working man’s neighborhood, as in not at all tony (she had similarly lived in the Lower East Side in Manhattan long before it became gentrified and cool, meaning when it was grungy and had little in the way of services). Twitter got tax breaks to occupy a building down the street from her. Tons of Twitterati rented space in her building as crash pads, driving her rent through the roof with no improvement in building services.
By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.
A new era has dawned: there is now a consensus that this is a stock market bubble. We’re back where we were during the last bubble, or the one before it, though the jury is still out if this is February 2000 or October 1999 or sometime in 2007. How do I know it’s not just some intrepid souls on the bleeding edge who are claiming this, but a consensus?
Bubble data keep piling up relentlessly. IPOs so far this year amounted to $51 billion, the highest for the period since bubble-bust year 2000, the Wall Street Journal reported. Of them, 62% were for companies that have been losing money, the highest rate on record. Follow-on offerings by companies that already had their IPO but dumped more stock on the market amounted to $155 billion, the highest in Dealogic’s book, going back to 1995. And throughout, the DOW and the S&P 500 have been jumping from one new high to the next.
It’s even crazier in the land of bonds, where issuers are dreading the arrival of higher interest rates – which have already arrived. And they’re pushing everything possible out the door while prices are still high. So far this year, $911 billion in bonds were issued, also a Dealogic record. Emerging-market bond issuance hit $802 billion, a notch below their all-time record last year, but emerging-market bonds went into tailspin during the summer taper-talk, which slowed things down temporarily.
These ominous clouds have been billowing up on the horizon for a while, but nothing is a bubble until enough people say it’s a bubble. And today, shortly before 10 a.m. Pacific Time, it officially became one.
I heard it on the last place where you normally hear this kind of thing, on KQED Public Radio in San Francisco, on Forum, a local show. Host Michael Krasny was chatting with New York Times writer Nick Bilton about Twitter as part of Bilton’s book tour. This isn’t exactly Max Keiser’s whiplash-inducing Keiser Report. This is soft-spoken public radio.
Twitter’s IPO shook up San Francisco. People are waiting for the tsunami of money. Everyone talks about it. And everyone talks about their gift to Twitter. Like all good corporate citizens, Twitter got a huge tax break from San Francisco, and that money is currently being extracted from everyone’s pockets.
In April 2011, the Board of Supervisors voted to give Twitter and other companies that would relocate to Central Market Street or the Tenderloin – not the most polished areas of town – a six-year exemption from San Francisco’s 1.5% employment tax. Twitter had threatened to leave and do whatever, if it didn’t get it. Voilà. Corporate extortion works every time. Only new hires would be impacted. At the time, the gift was estimated to be worth $22 million.
So Twitter moved into its new digs, and the headcount jumped, and salaries went up, and there has been some turnover, and now the gift has grown to $56 million – and continues to grow. Twitter too has become a corporate welfare queen.
But not everyone is happy, given the hoopla of the IPO, the billions involved, and the soaring rents in San Francisco as newly hired employees of startups with no revenues stand in line to rent whatever is available, rent not being much of an issue with their inflated salaries. Like Twitter, these companies are under no pressure to make money. So evictions jumped 38% between March 2010 and February 2013, the last period for which data is available; “Ellis Act” evictions – named after the state law that allows landlords to evict tenants when they want to sell their property – jumped 170%. Housing has been booming!
And people are being pushed out of the city. So on Thursday, as Twitter’s valuation settled on $31.7 billion, residents of San Francisco, who not only have to pay for Twitter’s gift, but are now facing ballooning rents or eviction, demonstrated in front of Twitter’s headquarters. “People over profit,” a sign said. “No to evictions,” another said. Or “$56 million in tax breaks – Are you Twittin’ me?”
This conflict too – between the fake money that pushes up prices, and long-term residents who can no longer afford to live here – is a sign of a bubble. San Francisco has been there before: in the late 1990s. It popped spectacularly.
“Why is Twitter not a total fad perpetuated by yet another financial bubble in speculative tech stocks?” a caller asked Bilton toward the end of the radio show. This sent Bilton off on a tangent, away from promoting his book. There were “bubble companies” that made you wonder “how on earth” they would be “worth so much,” he said.
Pinterest in San Francisco, an internet message board for images with 50 million monthly users, got $225 million in a round of funding that valued the company at $3.8 billion – though it has zero revenues. That a big chunk of the funding came from mutual fund company Fidelity, instead of venture capital funds, raised even more eyebrows. Or messaging app developer Snapchat in LA is stewing over an investment that would value it at $3.5 billion, and it doesn’t have any revenues either.
“I absolutely” – emphasis his – “believe that we’re in another bubble,” Bilton explained. “And it is going to pop,”
Companies like Pinterest with sky-high valuations and no business model or revenues – what are they going to do? Well, they either would have to be sold, which you can’t do easily at these valuations, he said, “or they’re gonna pop.”
That, on KQED, made it official.
I remember very well: in late 1999, everyone knew it was a bubble, and the word “bubble” had become a common term, though strenuously denied by Chairman Greenspan and others at the Fed, and by other official mouthpieces of Wall Street, but those in the market knew. They were just riding the wave, and the wave was too magnificent to get off. Money was being fabricated. IPOs were flying off the shelf, doubling and redoubling. Everyone was planning to get off the wave in the nick of time, ahead of the rest of them. And everyone was happy.
Well not everyone. Not the poor souls who were driven out of San Francisco because they couldn’t afford to live here anymore. Not the folks who lost fortunes when it all blew up. Not the Fed that claimed afterwards that you can’t see bubbles when they’re inflating – which made the Fed look really stupid.
But this time it’s different. Money is being fabricated. Investors are riding the magnificent wave for as long as possible. And they’re all planning to get off the wave in the nick of time, ahead of the rest of them.
After five years of QE, and $3 trillion in new money floating around, risk is no longer priced into anything. In fact, it has disappeared as a factor. And the Fed is publicly fretting about it. Read….. Watching The Fed Marinate In Its Own Artfully Concocted Pickle
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The more things change…..quelle surprise!
exactly! late 90’s may have been bubblemania for that region, but the real estate impact was happening as early as 1993 if not earlier.
taking real estate classes at that time, the traditional 3x salary envelope was already being pushed to 5 to 7 times the median, simply due to influx of highly paid knowledge workers. how can ‘normally paid’ people, like teachers, dental hygienists and such compete with that? they couldn’t then, and it has only gotten much, much worse.
signed, a Bay Area economic refugee
I agree we’re in a bubble, but I’m interested in this attitude toward “corporate welfare.”
So what do you think the correct response to Twitter’s demands should have been? They demanded tax breaks or they’d leave SF.
So you would… what? Call their bluff thinking they wouldn’t really leave? Or just not care if they left? Or somehow prevent them from leaving?
I can understand not being happy about it, but I don’t see the alternative… cities are in competition to attract businesses. Is that welfare? Is undercutting my competiton’s prices consumer welfare?
If a company extracts more than it contributes, why do you want them? This logic of chasing corporations is often more expensive than it’s worth. It’s often graft to real estate interests, who then donate to the pols who gave the tax breaks. I’ve seen this again and again: New Big Box company comes in. It gets all sorts of real estate tax breaks. It builds a new building, which provides some revenues to local developers and some extra short-term construction jobs. But in aggregate, it does not add jobs, since it kills local businesses. It’s job transfer rather than job creation, and those new jobs are often at lower pay than the old ones. So this is not income or wealth creation in the community, it’s wealth transfer, and the tax reduction leaves the community worse off (I could take you through some more detailed math in several local communities where that proved to be the case).
So you are basically pedaling corruption and reduction of the local tax base as virtuous.
It’s been unhealthy competition for the last few decades as it mostly revolves around easy money.
The goal is to build up a firm as fast as possible, wait for the bubble in the sector or lobby for it so you can sell or spin it off.
or leverage it while pocketing part of the proceeds.
The USA has devolved from the land of opportunity to the land of low paying corporate jobs. It is ironic that Bush talked about an “ownership society” – and yet promoted policies that made small business owners employees of the big box businesses that put them out of business. Regardless of party affiliation, the game has not changed since.
Washington state is finding out what years of tax breaks catering to Boeing buy you. They buy you a complaint that you’re not a right to work state like South Carolina. Washington needs some kind of formula to tell us the precise point in time when the legislature should start taxing the hell out of Boeing since they’re leaving anyway. It is out last chance for payback. At some point San Francisco should turn the tables and tax the hell out of Twitter. I am sure all of the talented people who work at Twitter will love the new headquarters in Stockton.
That one is a doozy– 9 billion in incentives. Is it also dependant on the machinists ratifying the crappy contract too?
I read one state representative voted against it. Good for him, but I’m sure the opposition will make hay of this during the next election season.
I sometimes think that the greatest transfer of wealth goes on at the state and local level, especially in light of the fact that states and municipalities cannot run deficits.
“I sometimes think that the greatest transfer of wealth goes on at the state and local level”
Yes. This gets way too little coverage, likely because of the effort still involved in documenting it. It’s not like your “local” Gannett chain rag has the time or funds to send a reporter to cover all city council meetings and comb the municipal archives inbetween.
It would be great to see Omidyar and Greenwald supporting a network of locally based muckraking reporters. Small town and small state papers don’t want piss off the business and law enforcement communities, and the reporters and researchers who are motivated to dig up dirt are too busy trying to get by.
I am always perplexed by Federalist types who push devolution to the states. I lived in New York almost all of my life, on Long Island, buried in the Republican fiefdom of Nassau County. Anyone who doesn’t understand that NYS and Nassau County are cesspools of corruption and insider dealings, completely unresponsive to the citizenry, was and is a fool. And I can’t imagine it’s better in Washington State or Alabama or Arizona for that matter. I think the scrutiny Washington DC gets probably keeps the dealings more honest than at the state and local level, which are almost always in the pocket of one or two industries, the DA, the cops, and the real estate speculators.
From all I’ve ever been able to tell, local governments are as corrupt as anything that exists. Probably not universally so. There’s just a powerful tendency. Those who rail especially against the federal government don’t strike me as opposing corruption as much as not being left alone to do things “our way”.
I live in WA state, worked in the state senate for a few years. It’s fairly decent but suffers from typical pol idiocy and corporate BS. We’ve maintained a large Dem majority (read: lesser of two evils with a better-than-average group of fairly progressive dems) and the gov for a long time, except last session one dem state senator jumped ship to caucus w/ repubs on the budget, giving Rs a majority and resulting in budget gridlock ala debt ceiling fiasco, w/ two extra special sessions (at great expense) to get a crappy budget deal at the last minute. Boeing rules the roost and gets ridiculous tax breaks, now offering a contract to workers for new 777 so insulting its criminal. Worst thing is no income tax, high sales + B&O taxes, most regressive state in nation for taxes. Mention the I-T word, you’ll never get elected dog catcher here. Could be worse. Could be better too.
Without all these incentives though and protectionism, one has to wonder if we would be producing anything whatsoever in North America.
Until wages are equalized worldwide and ALL countries are equally leveraged, I don’t see anything but arbitrage.
The next place is Africa… no debt… lots of room to lever up.
No, for manufactured goods, direct factory labor is between 5% and 15% of total product costs. Raw material costs and marketing are a much bigger items, generally speaking. For autos, for instance, it’s only 11% or so.
The savings in factory labor are offset by:
1. Increased managerial costs (more coordination).
2. Longer time to market (goods in transit, often 2 ways if they are using US/North American materials like wood). That results in:
– More finance costs
– More transportation costs
– Greater inventory risk (overstocking, obsolescence, transit damage due to more loading and unloading. You are talking truck or train to ship, ship to train or truck. 3 loads/unloads versus one). If just in time was the greatest thing to happen to manufacturing, why does this make any sense? It’s the reverse of just in time, with more costly goods
3. Greater coordination/communication/general fuckup risks due to extended supply chains
I’ve had numerous execs say the case for offshoring at their company was not compelling or depended on cooked #s. It’s basically a transfer from factory labor to execs. When there is a bona fide increase in profits, it’s at the cost of increased risk, no different that Wall Street levering up. It looks great short term but you have more costly and more frequent tail events.
I agree with all your points. I’ve been arguing those for more than a decade but companies still outsourced.
Just like everyone jumped into the real estate bandwagon thinking their house would make them rich, firms jumped onto the outsourcing one.
And I can’t help think that without incentives, our economies might have been gutted even faster.
The whole thing is a slow moving train.
Standard practice in Texas. Governor GoodHair has never met an economic stimulus package not worthy of a business handout. That’s why the property taxes for average homeowners continue to march higher. It’s also why the public education system continues to be strained. Corporations would rather hand out a few well-publicized donations and/or hidden political favors than contribute their fair share to they system that supports them.
These deals are becoming worse and worse. There is absolutely no justification for them now that they are down to eliminating city income taxes or rebating employee withholding.
City officials are especially enamored of tech though.You think its bad in SF? I’m pretty certain that it is ten times worse in any second tier city if my town is representative of this mindset. The pols are really played for rubes. Anyone with half a brain can see the whole reason for existence for most of these companies is to get bought out by a larger firm. That’s it. And they don’t add too many jobs. So the tech sector incentive packages seem especially bad. But council keeps handing out the welfare with visions of creating a second silicon valley (there are already plenty.) If you’re not adding payroll taxes you’re left with spouting some pretty fuzzy reasons for offering these bribes.
I guess the next question is whether Twitter is an asset or a liability.
I don’t need more tweets in my life but then again, maybe they are a link to a technology that will revolutionize our lives.
In many cases it is all a hustle. Company evaluates the numbers presents it to the locality gets all kinds of breaks for six years and then moves out to the next locality.
The U.S. is the land of the hustle and it is that because the American people are conditioned to be naive and radically unhip or to put it another way they are primed to be suckers, marks, chumps and so on. Mark Twain would recognize this country.
Yes let them leave if they choose.
It’s a carpetbagger company. Twitter produces nothing, nada, zero, vapor. Their GDP contribution is merely a flat liner new arrangement of the deckchairs.
They’re not going to get off the wave because the wave will never end since socialized losses will last forever.
Only in America.
I hope.
We are still in the “American Century” and thus the hustle-meme has spread everywhere. The difference is that most countries had criminal types who stole and committed fraud–but they knew they were hustlers and criminals and so did the citizens because they are armed with a new ideology and mythological framework carefully crafted in the PR world in the U.S.A.
No. It’s not just in America.
Google cut a similar deal with Ireland for the site of its European HQ.
It channels most of its European revenues through Ireland (tax rate 12%).
Still, it pays precious little tax in Ireland because Google siphons off most of the declared profit by charging Google Ireland a license fee for using Google(Bermuda?)’s Intellectual Property.
Neat.
Really obvious question, but…what happens when the wave ends?
Put another Bush in the White House and inflate the housing bubble by lowering interest rates . . . oh nevermind
Don’t blame the Fed for this.
Blame the anti-Keynesians. Blame the market monetarists.
The thing about bubbles is, they get much bigger, and go on much longer, than reasonable people can believe. No one in power wants this one to pop…
The only way the Fed knows to “generate growth” is by asset inflation. I suspect they’re not anywhere near conceding that it doesn’t work, because the alternative would have to be (GASP!) redistribution. And REALLY no one in power wants that.
Redistribution can be pinned on someone. Asset inflation is more stealth.
It’s interesting how short-termism keeps on accelerating. IMO, Twitter fits right in. Just when I thought communications could not get any shorter or noisier, we get Twitter… what’s next?
As for the markets, I also believe we’ve hit the bubble point but these things always last longer than we think. Markets don’t usually tank until corporate profits to GDP take a nosedive and they are still up in the stratosphere. See page 22:
http://research.stlouisfed.org/publications/net/
Correction: p.21
What’s next? 7 Minute Abs…
Thanks for your insightful observation, Jon.
Our focus on short term fixes that don’t get at fundamental structural issues and effectively even precludes such conversations has been carefully engineered and disseminated, including a prevalent “Blame the Victims” meme.
This bubble economy is, I believe, more robust than the last which depended on one BIG bubble. This seems to be a series of small bubbles.
Since 2008 various institutions, the FED, IMF, central banks around the world, and the myriad of official and unofficial international and regional institutions have all become more integrated and are now used to working more closely due to the 2008 crisis. No, they did not resolve the crisis for the betterment of mankind, but they did try to bring a measure of stability and coordinated policies that would stabilize the major markets. Not to say this has operated smoothly, there is still tension between Wall Street/City of London and others but the situation, as I understand it, appears to be more stable than it was.
The IMF, soon after the crisis, counselled publicly that we would/should enter into a period of austerity which was not called simply to impoverish people but to discourage too much speculation–if the future was bleak the hustlers in the markets would have to cool it and just play on the edges and work out smaller hustles which they did in fact do. QE was kind of cheating but allowed for the U.S. because it was and is the “essential” country because of the dollar and the fact the U.S. guarantees military security in the world which nearly all countries have agreed (even China) should be the case in order to guarantee trade routes and stability in the ME and other places. This explains the counter-intuitive move in Europe towards austerity, btw. Remember we live in a globalized system where nation-states have limited sovereignty.
Now what we see, because of the whole QE regime, is a series of managed bubbles. Bubbles are in the cultural DNA of the United States and stimulate growth–that’s how we function in this country. I’m not sure of the mechanism but I believe that policy makers believe (reading the tea-leaves of officialese) they have the bubble problem in hand for the short and medium-term. I believe, also, that their long-term view is bleak. Not because their policies are misguided (they believe) but because American society is crumbling and the social contract may break down at some future point. The Tea Party rebellion I think has scared them all because they now see that that bunch actually wants to destroy the U.S. as a centralized state which would spell disaster for main faction of the oligarchs.
The best course for all is to see the growth of a new populism on the left starting with a rejection of austerity for the middle-class and poor and boom years for the rich which could happen IF a faction of the oligarchy signals its interest in that sort of thing to the propaganda organs and then we may find a way through this mess.
So, therefore, I don’t see a serious threat from these bubbles at this time. The financial policies, unlike other policies, are still stable and in the control of “responsible” people which to most here means responsible to the financial elites only and, indeed, that is their constituency. It’s not their fault the American people are so passive and so militantly ignorant of what is going on around them–but that too many change and shows signs of changing.
With due respect to your intellect……
Put that diatribe or yours between two pieces of (hopefully) bread and try to feed the hungry with it….
Just saying…..
You know, I’m just into realpolitik–that’s how the situation is as I see it. One of the chief problems I see in my country is the obsession with fantasy and comic book views of the world (bad guys and good guys).
If you want to feed the hungry (means more than just food) then articulate an ethic that allows that to be something people consider important so others will join in.
You’re “just into realpolitik”?
Oh really?
I think people in the realist school are hardly making declarations like this one these days:
What you are regurgitating here is neoconservatism, not realism, realpolitik of course being a subset of realism.
I think you miss the mark here–I’m describing not advocating. Realism is very different from neoconservatism in that it describes things as they are not how they ought to be. The world elites do regard the US as the guarantor of their security–are you saying they don’t? I really don’t understand what you are getting at.
BTW Hans Morgenthau was a mentor to my father when he was at the U of C so I grew up with quotations from him like “all relations are power relations.”
Well you may be “describing not advocating,” but what you are describing is the neocon wet dream, the make-believe world of the neocons. The world you describe exists only in your and their imaginations, and nowhere else. It is pure neocon Disneyland.
Statements like “world elites do regard the US as the guarantor of their security” is unadulterated, fact-free neocon nonsense.
And being that you live in such a defactualized world, I suppose it’s understandable that you “really don’t understand” what I’m “getting at.”
Well try this on for size, from one of the leading lights of the realist school:
I can’t be certain, due to my ignorance, but I believe that what Banger describes he means as description of what’s really happening, free, as much as possible, from ideology. Hence he calls it “real-politic”. You call what he’s attempting “realism”, but claim he fails by preaching neo-conservatism.
But isn’t Banger just trying to describe what he perceives as the current reality of international relations? He may be wrong about it. I’m not informed enough to know. I can just say it rings true to me. Isn’t neo-conservatism prescriptive, to say that we should approach the world in a certain way? Banger, if he’s describing a neo-conservative world, he’s just claiming, if inadvertently or not worrying about whether or not it’s neo-conservative, that that’s how international relations currently operate. That doesn’t make HIM a neo-conservative, even in his post.
But what Banger is describing is not “what’s really happening, free, as much as possible, from ideology.” It is not “how international relations currently operate.” It is not realism or realpolitik.
Quite the opposite, what Banger is describing is the world as seen through neocon glasses. It is reality grotesquely distorted by an ideological taint. It is worth recalling what Irving Krisol, one of the leading neocons, said: “What rules the world is ideas, because ideas define the way reality is perceived.” This is why the neocons believe they can create their own reality. All that is needed is sufficient will to power and will to truth.
Why can’t Banger see the world as it really is? For instance, why can’t he see it as Immanuel Wallerstein sees it?
Or, perhaps even more significantly, why can’t Banger see the world as the super-hawk Zbigniew Brzezinski sees it, as he explained a few weeks ago at a conference at the Johns Hopkins School of Advanced International Studies?
Instead, what we get from Banger is a ficticious world as seen through the eyes of a bunch of neocon nut cases They are feckless dreamers in love with the Napoleonic vision of world domination.
at the risk of coming off an even larger kook-head than I normally do, I believe the major issue is that many here have with his posts is that there is a strong undercurrent of “this is the way it is. it is inevitable. you -lefties- have failed, and this is the world that we have. suck it up. neofeudalism, and all that entails, is coming. the people are ignorant and wallowing in their own sh!t and calling it Petunias. abandon hope all ye who enter here.”
in other words, the major underlying message that at least I have obtained from almost every single one of his posts, that he casts as ‘realism’ is that nothing we say here will make any difference. wake up and realize the bed we’re all lying in, kinda thing.
dunno, could be very wrong. but that is the common thread that ties nearly all of his posts together. except where he talks about coming together and expanding consciousness and stuff, which to me sounds like what would happen after the 7 stages of grief were gone through in as much time as possible (Shock or Disbelief – Denial – Anger – Bargaining – Guilt – Depression – Acceptance and Hope), except append after Acceptance “escape” into alternate realities and focus on the near and dear, since we’re all going down the drain together.
which, now I think of it, smacks as a kind of nihilism in a way.
‘as little time as possible’
as I say, it’s been a spoonerish day for my thoughts. and I can’t even say I had the pleasure of getting drunk to get here!
Right … blame the victim not the rapist. It’s not the rapist’s fault; it’s his nature; he’s a natural born predator, and she, hey, she shouldn’t have been so gullible and, well, succulent and defenseless. “Yeah, that’s it, it’s her fault, dammit, she made me do it, and in her militant naivete, she made me hurt her too.”
“It’s not their fault the American people are so passive and so militantly ignorant…”
Sorry, your moral relativism is a bit over the top here.
And the alternative is…? What?
I’m not blaming anyone here since militant ignorance is built into the culture in order to avoid contradictions and trauma and this tendency is shared by the rich and the poor. Yes, the ruling elites conditioned the current mind-set but all the information to deconstruct the illusions has been available to us all and we need to take responsibility for ignoring the facts and falling for all the myriad of con games played on us. The left is no better–most people fell for the Obama fraud–time to take responsibility for not seeing through the obvious PR BS.
But I understand, at another level, the criticism you bring. You want to view the world as a comic-book, i.e., there are “good guys” and “bad guys” rather than understand the fact we are in all this together and all share some culpability. Until we can do that and look in the mirror no effective action can be taken. Unless you know something I don’t know. People on the left have been complaining about things for over a decade yet lack an effective plan of action other than fantasies.
My plan of action, which I will struggle mightily to accomplish until my last breath, is very simple: organize workers and consumers to build living-wage, sustainable economies at the local level. I know this can succeed because we have managed to establish a real, powerful living-wage movement in Tompkins County upstate, and out west the workers in SeaTac Washington now enjoy a $15 minimum wage. The Tompkins County Workers Center gets calls every day from local employers asking about the process of becoming certified as a “living-wage” employer. The TCWC works together with the local Alternatives Credit Union to update the wage based on a careful survey of local rents, child-care, transportation, healthcare costs etc. Nearly 100 businesses are now certified LWEs. It has become a real competitive disadvantage for county businesses to lack this certification.
Even a huge multinational like Sodexo was unable to resist the strength of this living wage movement in Tompkins County:
http://talkingunion.wordpress.com/2011/07/27/under-student-pressure-sodexo-agrees-to-pay-ithaca-college-dining-workers-a-living-wage/
Down here in the mean streets of the city our push to organize and raise wages for fast-food workers has also gained some traction: http://fastfoodforward.org/
I know that union leadership isn’t always the best, but I was very encouraged a couple of weeks back when my old Teamsters Local 251 in Rhode Island voted out the entire incumbent slate of complacent cronies and replaced them with a great group of militant young activists– eager to reach out to workers who don’t yet enjoy the benefits of union power:
https://www.tdu.org/news/united-action-slate-scores-rhode-island-victory
Excellent.
Sodexo may not have been a good example… They just informed ALL their employees, those in Ithaca included, that they instituted a new definition of “part-time” and all the formerly fulltime – during the school year – now “new” part-time workers have lost their Sodexo-suppied health insurance and now must buy from the ACA pools. So much for a “living wage”. Many of these people are spouses – husbands or wives – that took these jobs primarily for the insurance benefits and not the pay (even 25K to 30K a year doesn’t go far in Ithaca, it’s a very expensive town to live in, far more expensive than most of the surrounding area).
Their new definition is that a worker must work an average of 40 hours per week over the entire year, not just the school year. That may work out for a decent number of Sodexo employees at Cornell, but I imagine not so many at Ithaca College, or many of their other smaller college customers where they do not now, nor ever will if they can help it, pay a living wage.
As for Banger’s statement that many in the U.S. are “militantly ignorant” which seemed to touch a lot of soft spots here, the militantly” part may have been a little harsh, but accurate in a way.
I have many friends across multiple industries and economic strata that I discuss a lot of these issues with (some even live in Ithaca :), and most are not ignorant at all as to what is happening around them, but they insist on hoping that “it will all work out” while they continue to shovel what they can afford into their 401’s, make excuses as to why the ACA is good step forward, and express hope that the Fed Reserve knows what it’s doing, etc. and most also insist they they can pull out before the next bubble pops.
They also insist on not rocking any boats if they can help it and I often hear them blame the poor, the blacks, the latinos, and/or the muslims for the main problems of the system even though they will admit privately that they know better.
That strikes me as being “militantly ignorant”.
JCC says:
Well again, you’re doing exactly the same thing Banger and jonboinAR do on this thread, jonboinAR for instance when he says:
And again, there’s a word for this insidious practice that you, Banger and jonboinAR are engaging in. It’s called stereotyping:
I will try to think about what you’re saying. Banger struck a nerve with me. I have been irritated for a long time by my compatriots severe (to me) lack of interest (for the most part) in current events and the public process.
@ Banger
Proclamations like yours — e.g. “I’m not blaming anyone here since militant ignorance is built into the culture” or “It’s not their fault the American people are so passive and so militantly ignorant of what is going on around them” — are exeedingly elitist.
But you’re hardly alone in your elitism. We got the full elitist treatment on this NC thread the other day:
But despite all the allegations of the ivory tower and inside-the-beltway “best and brightest” set that the post was above the understanding of the poor, ignorant, stupid proles, my perusal of the comments said something very different. The proles know exaclty what’s going on, and their comments conveyed this simple fact.
Someone like me who spent their career in small business, and not the ivory tower or inside the beltway, and who are actulally held accountable, knows this. I’m an engineer and was once trying to explain, using a lot of technical jargon, to a client why a system didn’t work. He cut me off abruptly and said: “I’m not interested in all that. I just want the thing to work.”
It’s worth remembering the words of John Kenneth Galbraith:
People may be in a quandry as to what do do about it, but they sure to hell know they’re being screwed.
Easy for you to say. I’m not sure what elitist means but in the old days it meant someone who did not believe in whatever line the leftist organization you were in was spouting.
We live In society that prizes illusions and fantasies because the reality is rapidly becoming too ugly to live with. Militant ignorance is a sane reaction to the situations we face–but it is still what it is and you are unable to refute that. People know, in other words what is going on but don’t want to face it so they fall prey to memes like Obama is Socialist Muslim or whatever and turn to the right not the left. Should the left in the US reconstitute itself there is a chance this situation might change–but I will take time and demand the repudiation of most of then Democratic Party and be the result of cultural change, i.e. moving from a culture that values individualism over society to one that recognizes we are all connected.
• Banger said:
Well I’m not sure what you’re trying to say here, but if you’re trying to say the left is elite-free, or the antithesis of elitism, I think you’re mistaken. The left has more than its share of elites.
Also, I’m not opposed to elites per se. I’m not making a blanket condemnation of all elites. What I am opposed to are those elites who are either 1) the lords of capital or 2) the paid liars and bumsuckers of the lords of capital.
Much more on the left-wing elite sellouts here:
• Banger said:
You’re the one making the claim of “militant ignorance,” not me. Ever heard of Occams Razor? Where is the evidence that the great unwashed are ignorant of the fact that they are being screwed?
I don’t see it. What I see are ordinary folks who know full well they’re getting screwed like heel-tied goats. They may be undecided as to what to do about it, but they sure to hell know they’re getting screwed.
• Banger said:
There’s a word for the types of over-genrealizations you employ, your trying to paint all Americans with the same stigma of a few nut cases. It’s called stereotyping.
The reason people are turning to the right is because the left has become so morally and intellectually bankrupt.
Why do you believe it is that rank and file Americans are only given two options, a choice between two right-wing reactionary parties?
There are so many reasons why people are moving to the right, one of them being that the population is getting older.
Most decent people understand that we are currently basking in multiple shades of grey. Most decent people do not believe in shoving their beliefs down other people’s throats. Since they have no clear solution, they close their eyes and do nothing. And while they do nothing, the ideologists take over because they have no qualms about trampling other peoples’ rights.
I guess you had to be there. In left wing discourse back in the day “elitist” was an epithet hurled at those whose ideology was not pure enough so it brought back memories.
Again, people may have a sense of being screwed but I say they don’t want to face the causes because it would be painful and because it would require action and going up against what appears to be awesome power.
Well, some may be too chicken or lazy, as you imply, but I suspect many are also harnessed to the plow — too preoccupied with surviving. Those toiling in the fields don’t have the time you do to deconstruct a rather sophisticated propaganda matrix as you have. Do you really think the solutions are so obvious?
Furthermore, the powers they face don’t just “appear” to be awesome; they are in fact awesome and deadly. Look what happened to occupy in a coordinated attack; look what happens to whistleblowers and to insurgents in places like Egypt and Libya. There’s very little that “little people” can do without you out front, rallying the troops and carrying the flag of truth. But they can certainly do without your disdain and absence of empathy.
“You want to view the world as a comic-book, i.e., there are “good guys” and “bad guys” rather than understand the fact we are in all this together and all share some culpability. Until we can do that and look in the mirror no effective action can be taken.”
Oh lordie, who’s this “WE”, qui no sabe?
Mistakes were made
We’re all guilty
Can’t we all just get along
Let’s not point fingers (except at the victim)
Let’s look forward not backward
“Lean forward” (MSDNC)
“Rise above” (CNBS)
And now … “we’re all in this together and all share some culpability.”
Yup, come to think of it, IIRC, it was deadbeat minorities and liar applicants that contributed to the last bubble. And on their behalf, the IMF, the “Fed” banking cartel, and “the myriad of official and unofficial international and regional institutions … did try to bring a measure of stability and coordinated policies that would stabilize the major markets.”
And, as for austerity, “the IMF … counseled publicly … [for] austerity, … not … simply to impoverish people but to discourage too much speculation.” Right, austerity for real people and QE for Wall Street, PE slumlords, and connected MIC cronies is designed to reduce casino speculation, not to enrich the already filthy rich. (Yup, as from Mexico would say, “QE-MMT for me; austerity for thee!”) $110 million an hour, 24/7 for five years; a totally pretend balance sheet almost five times above any historic precedent, and all to reduce speculation. Sure, that makes sense. After all, these aren’t sociopathic, power-mad predators; these are “responsible people”, the same people who brought you NSA, ObamneyCare, and soon TTP/TTIP, all for your own good.
Okay, so “QE was kind of [sort of] cheating but … [it] guarantees military security in the world … in order to guarantee trade routes and stability in the ME and other places.”
Hey, pass that bong, dude; that must be some really good sh*t!
“Now what we see … is a series of managed bubbles. Bubbles are in the cultural DNA of the United States and stimulate growth–that’s how we function in this country … So, therefore, I don’t see a serious threat from these bubbles at this time. The financial policies, unlike other policies, are still stable and in the control of “responsible” people.”
Right no bubble to worry about. Again, don’t Bogart that bong, dude.
Don’t listen to irresponsible people like David Stockman, Marc Faber, Wolf Richter, John Hussman: A Textbook Pre-Crash Bubble, or former “Fed” member Andrew Huszar: Confessions of a Quantitative Easer. Nothing to see here. Buy the dip; hit snooze.
In my comic-book world, this bubble is so enormous (Stockman, Faber, Hussman, Richter, Huszar), we just can’t see it. It so dominates our field of vision, it’s like standing four inches away from an elephant. It’s just a tree, until it stomps us. Anyone whose salary — or bonus, or home equity, or 401K — depends on their not seeing it, can’t. Or they think they’re clever enough to grab a chair before Bennie’s music stops.
———-
Yup, come to think of it, IIRC, it was deadbeat minorities and liar applicants that contributed to the last bubble.
———-
What he’s saying, I think, is that line you wrote, taken literally, not sarcastically the way you meant, is what many American’s are buying into, because it’s easy. As long as that remains the case then, yeah, to some extent they deserve what’s coming. We know the truth is not just out there, but fairly close to one’s fingertips. American’s really need really soon to not just figure out that they’re being screwed, but how and by whom. Otherwise the solution is what? Shrink the federal government?
I also think that’s what Banger is saying, that Americans deserve what’s coming because they willingly consented to date the rapacious banksters, out of willful ignorance, laziness, and cowardice. And banksters and lying politicians are only doing the rational thing in exploiting that. I just strongly disagree. If Americans share any blame in their rape, it is so fractional as to be negligible.
I warn my kids not to play in the traffic.
When they ignore me, I punish the kids, not the cars.
Do your kids exist in a political, social, cultural and “scientific” structure that requires them to play in the traffic in order to survive?
Touche! That reminds me of the kids in Mexico who scramble to wash your windows — and you’re not parked, just stopped in traffic. Chinga me! How can you not empty your pockets and seethe at the Chilango chingaderos that cause this. And here we are whipping the kids, while defending the sociopaths that imposed such cruelty.
A LOT of people did not have to buy bigger houses or put in granite and stainless
did you?
shall we go around gauging worthiness by style of appliances purchased, now?
like choices in the market are based on what people actually NEED or WANT. not quite!
wants are created by the fashion/ad. industry, and needs are fulfilled by what the corps can get away with selling you that maximizes their profits.
at least stainless steel lasts a long time. retry your complaint when people rip those things out in favor of the Newnew fad, whatever that will be. otherwise, I guess they’re keeping that crud for a looong while.
For some reason, I thought the real estate market in the US was unsustainable and would collapse. I think the same thing is happening in Canada with a lag.
When I bought my house, the purchase was based on the lowest salary and the second income was gravy. This meant buying in neighborhoods that were not in our “social standing”. I’m a gen-x and from my early 20s, I’ve had this feeling that it was not wise to follow the boomer path because I was not a boomer. Another reason was that I knew I would not be able to stand the soul crushing corporate world for long, so I needed to be debt free ASAP so I could start my own business.
It was tough because I was ridiculed by everyone around me for being cheap, paranoid and negative. I did start my own business and even changed cities to change my environment.
So I’m the first to know how dehumanizing going against the crowd can be. Why me? I don’t know. Probably because I’m one of those at the tail end of the bell curve on some sort of personality measure. As a woman who studied in math, I’ve always known I was odd. I knit too. It keeps me grounded with nature.
When I do my hobbies and crafts, it makes me realize how out of sync our lives are with nature. You know… when you drive a few km to get that liter of milk… no one seems to think about how much energy is expended to get a few calories.
Yes. I do judge peoples’ lives on how much energy they consume because I believe it will be our downfall. Am I perfect? Far from it. I’ve tried to cut on a lot, but our system is made to consume. So I do my fair share of burning energy but one thing I do know, is that I burn a lot less than most with my wealth or income.
I am the first to admit that our problems are systemic. But I can’t pin everything on the 1%. I know a lot of nice rich people who just happened to be at the right place, at the right time with the right package. I know a lot of nice poor people who were not as lucky. I know a lot of rich and poor jerks.
There is a significant percentage of disenfranchised people who do not have choices, so I give them a pass. But there is still a top 30-40% group that still has choices, yet this group is still making the wrong decisions which will further gut the middle class. If we want things to change, it’s up to them.
I think we are consuming too much energy and resources per capita. Do I think it will change? Probably not until we are forced to.
this is an interesting response, and we could probably analyze all day why that is so. I don’t want to dissect you under a microscope, but surely you realize by your own experience just how ‘out of the norm’ your stance is.
this question of ‘choice’ for the upper 30-40% is a big one. one I’ve clashed here with Banger on. as you say, the problem is systemic. if those upper 30-40% had not been buying a big house and putting in stainless steel, how would that behavior ever become able to be ‘sold’ to the masses? in other words, people wanted their homes to look like something out an of Ethan Allen ad., and all they knew was, they worked hard and were making money and could ‘afford’ it (some more, and some less but that right there is the point). the status of it all, the assurance that we were entering a new period of productivity, and that people were earning money through their own expertise and so on was alluring, from the top on down.
here’s my own anecdote (with all the warnings that come with that). I call it “A Tale of Two Couples”, and how their fortunes have varied. two similar SES couples, from similar barely-middle class backgrounds, obtained schooling and began their careers in the Bay Area in the late 80’s, early 90’s. these two couples did almost nearly all of the same things: they rented massively expensive homes (not by choice–location, location, location!), always drove new-ish cars, obtained advanced degrees to keep their skills current, bought homes, travelled to Europe, etcetc.
one of these couples borrowed to get their advanced degrees which were absolutely necessary to career advancement, experienced periods of unwilling unemployment and career transition due to -normal business cycle stuff- mostly beyond their control, bought at the top of the RE bubble in the Bay ARea what would have beena modest, middle class home in a basic, stable neighborhood 20-30 years ago, but due to simple inflation and typical RE madness is now considered upper MidClass semi-luxurious (they have tREES~!), experienced more downsizing and closure and transition, remodeled their kitchen, kept getting newer cars and all the tchotchkes that their colleagues expected of them, experienced bankruptcy and now live with one salary instead of two in an underwater home from which they may never escape (which they love, and it is nice) unless the bubble reinflates.
the other couple did nearly exactly the same thing. the only difference was, they did it slightly out of step with the cycle of what was going on in the world around them—they didn’t buy at the top, they were able to ‘choose’ when they wanted to be unemployed, otherwise both worked. they always drove newish cars (including high-priced brands), they ‘kept up with the Joneses’ since one worked in tech. and had all the toys in their garage to prove it. they didn’t experience bankruptcy and were able to time their degrees to better mesh with when they were alternately sitting out the working world by choice. in other words, they did EVERYTHING right, didn’t experience bankruptcy and will likely retire early to full 401ks, etc.
what was the difference between these two couples? striving? borrowing? intelligence? timing? luck?
I have no idea to this day what combination of factors was definitive, but I think it shows something. these people were all ‘smarter than me’—more educated, had skills in-demand, etc. and yet they ran with the wolves (they both conformed to the norms of their age) and one came out winner and the other loser. i’m still trying to figure it out.
There are times when the victim is a little to blame. I think that this is one. We, Americans, as a group, are freakin’ maroons, and, as Banger says, militantly so. We don’t HAVE to buy their bullshite, but choose to. So there’s a sense that we, with the power of the voting booth, deserve what we get. For cryin’ out loud we elected Ronnie Raygun, seemingly because he could deliver John Wayne-like lines in a cheesy but somehow effective way. He promptly (man, I forget exactly what) deregulated the media in a way that screamed for them to be taken over by corporate interests, and here we are.
which nearly all countries have agreed (even China) should be the case
Rulers of vassal states who don’t think that their states ought to be vassal states soon end up as ex-rulers of vassal states, and for the most part as late leaders of vassal states. (cf. Allende, Boadicea, etc…)
“The best course for all is to see the growth of a new populism on the left starting with a rejection of austerity for the middle-class and poor and boom years for the rich which could happen IF a faction of the oligarchy signals its interest in that sort of thing to the propaganda organs and then we may find a way through this mess.”
why does this sound suspiciously like “we can return to the gold days of Business as usual. we simply lack the will”?
should we launch into “Happy Days are Here Again”?
http://www.youtube.com/watch?v=iL0Qt7IF8Q4
Banger said:
What you are regurgitating and fawning over here is the neoliberal manifesto, to which I could not disagree with more.
While the bubbles the Fed is blowing may indeed “stimulate growth,” that growth is only in the ficticious financial economy and not the real productive economy.
Furthermore, while the policy makers may indeed “believe they have the bubble problem in hand for the short and medium-term,” an examination of the actual performance of the Fed over the past century or so flies in the face of this conclusion. They also believed they “had the problem in hand” in 1929 and 2007.
So when you make statements like “I don’t see a serious threat from these bubbles at this time” and “The financial policies, unlike other policies, are still stable and in the control of ‘responsible’ people,” you betray your fealty to the cult of neoliberalism.
Concur… veiled apologetic.
skippy… better to accept the small dildo and move on with life…. than fear the big one left out for public display.
Yes, that “bubbles are the culture of the US” is crap.
2 big bubbles (dot com and the GFC) and it’s suddenly part of our culture. The 1980s stock market bubble and crash doesn’t count; that was driven entirely by Milken’s raiders (even Goldman said so in 1987 pre crash).
There was a change in the economic model in the US from one driven by wage growth to one driven by increased consumer leverage and asset price appreciation to mask wage growth.
Comparatively few Americans own stocks directly (as in they hold them in retirement plans and can only move them between a very short list of funds once a year), and of those, plenty aren’t speculators. And people do NOT like speculating with their homes.
This is pure unadulterated garbage.
Bubbles *were* the culture of the US in the 19th century, though. Really. I’ve studied it enough.
This is just another example of “undoing the New Deal”.
What is the underlying economic rationale for “Repeated Bubbles” policy (the “Why”)?
Who makes the decision to blow another bubble and What is the institutional framework that enables these decisions to be made and implemented without any checks and balances, oversight, or even questions by our legislators or federal regulatory agencies?
And What are the detailed market mechanics of How these massive bubbles are blown — including the clear coordination of Money flows, massive Market manipulation, and corporate Media concentration and persuasion? With respect to this third question, I expect a detailed analysis would include the second and third derivative roles of particular HFT firms, hedge funds, private equity firms, et al.
Once = Stuff Happens
Twice = Golly, What a Coincidence!
Three Times in 13 Years = A Pattern
Surely we can do better than this.
We certainly could if there was an interest by the majority of the American people to find out what is actually going on behind what the propaganda organs pump out minute by minute.
It has already been explained to you why people who are worn out from survival and have no time are not able to do what you condemn them for choosing not to do.
Oh, no they’re not. I am one of those people. I live with those people. I work with those people. My relatives and friends are those people. As employees, they’re fine. As parents, they’re decent. As friends, they’re great. As informed and effective voters, they, in the aggregate, are a bunch of ignorant, useless, shiftless, lazy, extraordinarily easily manipulated bums. You cannot say enough bad about the efforts of the American public to educate itself.
I’ll say it again. To a certain extent they deserve what’s coming because they choose ignorance and cheap entertainments. I myself don’t start to do enough, and I’m WAY more informed than ANYONE I know. I can’t quite comprehend how most of you know what you seem to. Is studying this stuff all you do?
Say what?
So Banger is helping cure ignorance with all the fact-free neocon and neoliberal nonsense he spews on these threads daily?
And people “choose ignorance”?
People don’t choose ignorance. They have their own little area of expertise, and outside of this they must rely on experts.
We live in an exceedingly complex world that requires experts in highly specialized areas in order to make sense of it all and to make it work. But expert opinion is like the Tower of Babel. And people don’t know which expert to believe. One experts says one thing. Another expert says just the opposite. Many experts talk out of both sides of their mouths. Experts change their minds over time.
One of the best rejoinders to the culture of technical control I’ve run across is this by Joan Roughgarden:
http://thesciencenetwork.org/programs/beyond-belief-science-religion-reason-and-survival/session-3-3
Do you expect people to know all the science of how the engine in their car works? Their cell phone? Or all the science involved in making the light bulb come on when they flip the light switch? Of course not.
Get a life.
you may not like me, but this comment is 100% correct in my experience.
I think the university professors cut their own necks when they retreated into jargonese, instead of making it their public duty to educate the populace about their findings. yes, I know they have deadlines and grant apps and must write books (if they can get a publisher) and so on, but really the public has been suffering in ignorance for too long.
free education—we should all try some.
Yup. Me, too. I have a lovely life with the people that surround me—-until they open their mouths about politics/religion/economics/foreign policy. It is astonishing. I feel, every day, that I am living in the Twilight Zone.
Look man, I’m saying that no one, practically, that I know, pays even the minimum, to my mind, modicum of attention. What’s odd, that I can never figure out, is the few that do pay a bit of attention, are all tea-party, eliminate federal government types. I’m the only commie. I keep wondering if they know or understand something I don’t. This is among the working class that I know. The rest don’t appear to give a shite. It’s been that way my whole 30 year working career. They just act cynical and say it’s all rigged. They’re simply lazy. I have no respect for them as citizens beyond the fact that they support their families and aren’t criminals. These are my friends and family.
Banger’s right. It is partly their fault. Politically, economically, they grease their own bungs, bend over, and say “Please do me.” They don’t need to complain about what’s happening to them now if they’re not going to bother to study enough to determine who’s doing it, how, and what’s a good first step to end the rape. Unless you think referring to Obama as a Kenyan socialist/muslim plant is a good approach. Crap! One guy, a military retiree, I think a major, wanted to beat me up because I wouldn’t accept his contention that Obama’s ultimate goal is to turn the US Muslim. That’s what he’s flippin’ worried about! The &^%$ corporations are EATING US and these maroons are convinced that Obama is either a secret Muslim or a communist! That that’s what we need to worry about with regard to Obama and the direction he’s leading us in. And you think I should give that kind of intellectual effort respect? I’ve stopped talking to anybody out of fear of making enemies in my own community. I can’t afford to do that. I’ve gotten nowhere. Just made people mad. I have to figure out my approach and I’m a poor arguer.
I have noticed that I’m the type who can bag all day on my friends, family, compatriots, but I don’t want you to. I’ll have to think about what you’re saying regarding stereotyping. As far as Banger’s neo-conservatism, I don’t have the knowledge to speak to it. I’m one who appreciates the exerpts you put up and find them edifying.
Twitter et al. They produce nothing, users supply content and personal data without paying for anything and potential advertising (and marketing data) is the sole source of future revenue. These are advertising businesses and advertising spending is finite, allocated by companies as a budgeted item.
How much different would the optics be if these ad companies were identified as such? “New Ad Media Company Goes Public.” One after another, day after day, each of these companies gets a multibillion valuation. Would it be any easier to suspend disbelief and ignore the obvious that THIS IS INSANE?
We will never know because the words “Social Media” have made everyone blind, deaf and dumb. Exchanging messages with one anther is seen as revolutionary in this context. Nothing of consequence is produced to improve the quality of anyone’s life yet these clumsy methods of communication are rewarded beyond measure because they are the ultimate vapor ware and no real value can be ascribed to them making them the perfect speculative tool.
If you say “social media” three times fast, the law of supply and demand does not hold any more. It’s magic.
HI5 Klassy!
It took me a while to figure out what H!% meant. Slow on the uptake…
HI5
Twitter, as an advertising medium, must be a good deal less valuable than the data generated by users. Imagine all that data: millions of users, “expressing” themselves,s with little to no filter, succinctly, often times directly in relation to corporate marketing campaigns, and highlighting relevant themes all the while.
Jeesus, no wonder it went higher than Facebook. Much more manageable.
Money: The Emergency Broadcast System
As you can plainly see, capital employs money to create artificial crisis, polluting the countryside to drive urban density. A depression, brought on by prohibitive regulation along the diminishing returns curve, is just the last leg of fiscal and monetary policy in a positive feedback loop, driving artificial real estate price inflation and deflation. Corn is just the latest scam baking pollution into the price of food for the so-contained masses.
From the perspective of labor, money is employed as an early warning system. When government refuses to live within the means allotted, increase your distance, by discounting empire money in your private life. Its value depends upon the difference between your value system and the counterparty value system, along the people-property-income prism.
By now, you should have a p/t public job, a private business and access to natural capital. To the question of whether you want to live in poverty or join the military exercise, the answer is neither. No one of consequence seeks war, the drones can be turned on their keepers at will, and a bomb to end any war can be designed at any time.
Labor raises its children to seek their own lives independently, hoping they will come back for a visit. Middle class raises its children to replicate. And capital raises its children to control replication. You are not born looking backwards. With age, automatons look back with increasing frequency, responding to expected stimulus with conditioned habit in shorter and shorter loops. America is no more responsible for the Middle East sh-show than vice-versa.
Labor doesn’t work for debt, or gold bought with debt; corporate has consumed its entire economy with increasing price on decreasing quality; and the Fed is printing all corporate payroll to simulate a tax base, paying each social class to steal from the one below it, with make-work misdirection.
All the automatons know is that money temporarily relieves their mal-adaptation anxiety, and they are just one digital transaction from bankruptcy, if they do not comply. Money begins as training wheels, becomes a scam, and proceeds to addiction, until it becomes a bomb. Silicon Valley simply globalized the system electronically, hiding it further from view.
Look at the dot.com IPO graph of gravity over time. Amazon isn’t a book store, with a magazine rack for advertisers. It’s a distribution system built by cannibalizing the book business. Amazon sells advertizing, to grow the keep-up-with-the-Jones, middle class consumption, and it is already on the heels of Wal-Mart, at the limit of marginal utility. Capital rolls out and IPO in hopes that the gravity will suck in people to solve automaton problems.
Twit is the Hail Mary as the clock winds down in a game already lost. Empire advertizing is in a contracting closed loop, desperately seeking teenagers as seed to grow the ponzi economy. Every time it thinks it has a solution, it doesn’t. Twit is all promise and no business, and the kids are already increasing their distance, again.
Capital is cannibalizing itself playing a game of cat and mouse, with kids who are playing demographic deceleration, in a world of capital control, early childhood education and electronic spying, which is why the middle class finds itself in a liquidation trap, revealing ongoing capital insolvency. Capital grows a middle class to close out labor in the short term, all it knows, only to accomplish the opposite, closing itself out, over the long term, simple physics.
Empire is a self defeating system, proceeding step by step to the limit of diminishing returns, no marginal utility of legacy capital. Cancer is a function of short-circuit replication, and the empire treatment is always another short squeeze. Germany may see 95% of America and America may see 97% of Germany, but neither is relevant to your future. Labor doesn’t act as a union to the end of cartel.
Wages only have meaning when they are considered relative to some object. Only the middle class thinks it makes sense to accept debt as money in payment for service, falling further and further behind real estate price inflation. If you look at the momentum of gravity, you will see that the dot.com ‘paradigm’ has run its course. Labor mirrors stupid, until it doesn’t, and stupid blows up.
This planet replaces the critter at the top of the food chain on a regular basis. Empire money is a simple extension of planetary gravity, an artificial construct serving as an early warning signal, a timing device. The answer to the chicken and the egg problem is neither; time is a perception. Most of the boomers mismanaged their inheritance. It happens, on a regular basis.
The empire blows itself up attempting to micromanage marriages to the end of its own replication. All you have to do is place your resistors beyond its horizon. This planet is awash in sunk cost real estate. Recycle to propulsion, with a transmission made for the purpose. Discount bank interest from price.
When Buffet talks about the value of money, what he is talking about is hindsight, the time value of delay. He’s a bankruptcy judge, as are all judges. He employs a replaceable middle class to do his dirty work, to pave his way. A last-to-lose politician is of no consequence to labor. Labor doesn’t require a rear-view mirror; it’s an option.
Define your self, moving forward, and raise the bar as you go. Life is who you take on the journey, not what. Labor recognizes labor, whether it dresses as labor, middle class or capital. You can only choose your mate. Choose human.
“I will give you back your health and heal your wounds.”
Life, the tree of faith, is quantum and indeterminable, adaptive intelligence. Death, the tree of knowledge, is incremental and deterministic, artificial intelligence. University is an artificial construct turning artificial constructs, making make-work. It cannot fix itself, because it is a prisoner of its own contrived past. There are babysitters, and there are architects, who appear to be babysitters. That is the economic choice.
The kernel is a circle with a choke, creating a clutch, separating closed and open systems. What you do with it is up to you. Making contact is a leap of faith, ruled out by empire.
A new era has dawned…
The usual people are getting richer…the stock market is a money machine…
This is no bubble. It is the future, munificently whispering its secrets into the ears of the true believers and making them wealthy beyond their wildest dreams.
“The pace can go on. The physics of the Information Age is a sure bet. Chips are headed towards infinite speed at zero cost. So is bandwidth. The radical new software and e-commerce business models that will follow in their wake can only be guessed at. But their arrival is a sure bet. Zany zooms in the underlying power are locked in.” – Thomas Frank, One Market Under God: Extreme Capitalism, Market Populism and the End of Economic Democracy, quoting Rich Karlgaard, the publisher of Forbes
All the crazy economic euphemisms that are “frolicking open-mindedly through the economies of the world, chasing the best return…”
[“Investors are riding the magnificent wave for as long as possible. And they’re all planning to get off the wave in the nick of time, ahead of the rest of them.”]
But for the rest of us, something has gone drastically wrong…
More than a decade ago, Frank gave us a warning:
“[It] was never as much about the return of good times as it was the giddy triumph of one America over another, of their New Economy over our New Deal.”
“As the free money dries up and the euphoria cools off, as the commercials get pulled and the websites are disconnected and the high-flying shares settle down for a 30-year flat-line… we will look back on this long summer of corporate love and wonder how it was that we ever came to believe this stuff.” – Thomas Frank, One Market Under God: Extreme Capitalism, Market Populism and the End of Economic Democracy
A little history. Walter Shorenstein is a big Democratic donor and helped put Feinstein in office. He is a major owner of downtown real estate, to and including the Bank of America Tower.
His son owns the old block square Merchandise Mart building where Twitter is located.
He bought it really cheap because of the huge quantity of homeless bums that have turned that part of Market Street into a guantlet of urine, begging and filty–all promoted, excused and possible thanks to the Homeless Industrial Complex, which has spent well over a billion tax dollars on services to out of town drifters that come to San Francisco. Shorenstein and his fellow cabal members are big donors to the various charities that facilitate the homeless.
They convinced the poodle mayor, Ed Lee, to push for the Twitter exemption, which instantly raised Shorensteins building’s value. Now that there is a tax exemption, all the Twitternaires do not have to pay the 1.5% city payroll tax on their instant billions, in addition to the property tax waiver.
The parasites are feeding on what’s left of america. What will it take to drive them out of our nation?
The great lie about bubbles is that they are difficult to impossible to spot in advance. We have been talking about the bubble in stocks and commodities for nearly three years now. The housing bubble was seen anywhere from 2 to 6 years out, the dot com bubble probably three years out. A bubble must by its very nature be big enough to have sizable, even systemic, effects. That means it has to be so large it can be seen years ahead of its bursting.
But we live in a kleptocracy, so there is no incentive to head off bubbles in advance or penalize those who blow them. As we saw in 2008, the rich lost money in the meltdown, but they recouped their losses through government bail outs. And because the rest of us, the rubes, did not, the share of the wealth (and along with it the power) held by the rich increased. This is why the rich do not fear bubbles. Their looting makes them rich. Bubbles make them more powerful.
Buy stock in companies that incur net losses! What will they think of next on Wall Street?!?!?
Dear Fed,
Just keep the interest rates low and everything will be fine.