Amerika

Posts Tagged ‘economy’

Dot-Com 3.0 Collapse Is Here And Will End Western Economies

Thursday, July 6th, 2017

As mentioned frequently here before over the past few cheerfully oblivious years of manic investment in technologies of dubious value, the great collapse has finally gone mainstream:

Last month Robert Bouroujerdi, chief investment officer at Goldman Sachs, and most definitely someone who does remember the last dotcom boom, published a report in which he cautioned of the growing risks presented by the meteoric rise of the Big Five tech behemoths: Apple, Amazon, Facebook, Alphabet and Microsoft.

Bouroujerdi noted that in the year to the start of June, these companies added a total of $600bn of market capitalisation – the equivalent of the gross domestic product of Hong Kong and South Africa combined. Parallels to the 1999-2000 crash are becoming increasingly evident, he said.

…Tech companies are deeply intertwined: when one falls it often takes scores of others down with it and often psychology dictates that the more a stock falls the more likely it is to fall further. Imagine rats scuttling for the exit on a sinking ship. No one wants to be caught inside a cabin and sink.

In other words, it is like a really successful strike when bowling: you hit the middle pins hard enough that they knock the outer pins down. Already we are seeing second- and third-tier tech companies quietly shutting the doors and sending everyone home, and a resulting mass exodus of those who lost the employment lottery in California to other states. But that is nothing compared to what is coming.

Bubbles in the market — huge wealth booms created between the time when the herd becomes fascinated with a New Thing and the time when they realize it is worthless — are classically compared to houses of cards. If any structural piece is removed, or the top crumbles, the whole thing falls in the classic domino effect where the fall of each piece triggers the instability of others.

On the other hand, bowling is an invisible dependency. There is no obvious link between the other pins and the central four. Yet when those pivotal pins go flying, the others go down like bystanders hit by shrapnel during a suicide bombing. Silicon Valley is a giant invisible dependency, not only within itself, but because much of our interlinked economy depends on Silicon Valley:

In 2014, Silicon Valley innovation workers produced $225,000 in added value per employee annually, according to an analysis by Collaborative Economics of federal data. The next closest in productivity was New York City, where tech workers produced an average of $205,000 in added value per year.

This creates tragic conditions where the economy cannot sustain a massive loss in value in Silicon Valley:

As a proportion of GDP, American corporate profits are higher than they have been at any time since 1929. Apple, Google, Amazon and their peers dominate today’s economy just as surely as US Steel, Standard Oil and Sears, Roebuck and Company dominated the economy of Roosevelt’s day.

…The McKinsey Global Institute, the consultancy’s research arm, calculates that 10% of the world’s public companies generate 80% of all profits. Firms with more than $1 billion in annual revenue account for nearly 60% of total global revenues and 65% of market capitalisation.

…The number of listed companies in America nearly halved between 1997 and 2013, from 6,797 to 3,485, according to Gustavo Grullon of Rice University and two colleagues, reflecting the trend towards consolidation and growing size.

And so we come to the ugly word consolidation. This happens when markets are dying, not thriving: the margins on what is being produced shrink as time goes on and the newness of the product fades, and since the big profits are no longer there, companies merge and acquire one another so that a few market-dominant firms can absorb whatever wealth is left in using ten-year-old or twenty-year-old ideas to churn out a product by rote.

We have seen radical compression of the markets over the past few years. The closing of American malls. The domination of the internet by Google (and technically non-profits that serve Google goals like Wikipedia). The tightening up of supply chains like Sysco. Grocery store mergers, and the simultaneous reduction in the number of big box store brands and increase in their territory. Everything is Walmart or Costco now.

With consolidation comes the bowling-pin effect. Hit any one of these sectors of the economy hard enough, and odds are that it will careen into another, and that into another. Hit a big enough sector and they all go down. Are you scared yet? Let us travel down memory lane to the last time that a giant bubble popped, namely the government-created housing crash of the early 2000s:

His most successful effort was to impose what were called “affordable housing” requirements on Fannie Mae and Freddie Mac in 1992. Before that time, these two government sponsored enterprises (GSEs) had been required to buy only mortgages that institutional investors would buy–in other words, prime mortgages–but Frank and others thought these standards made it too difficult for low income borrowers to buy homes. The affordable housing law required Fannie and Freddie to meet government quotas when they bought loans from banks and other mortgage originators.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007. Despite Frank’s effort to make this seem like a partisan issue, it isn’t. The Bush administration was just as guilty of this error as the Clinton administration. And Frank is right to say that he eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was too late.

…By 2002, Fannie and Freddie had bought well over $1 trillion of subprime and other low quality loans…As a result, in 2008, before the mortgage meltdown that triggered the crisis, there were 27 million subprime and other low quality mortgages in the US financial system. That was half of all mortgages. Of these, over 70% (19.2 million) were on the books of government agencies like Fannie and Freddie, so there is no doubt that the government created the demand for these weak loans; less than 30% (7.8 million) were held or distributed by the banks, which profited from the opportunity created by the government.

There are two parts to this disaster: the bowling ball, which was a relatively minor mortgage meltdown, and the pins, which were the vast investment by government and the many for-profit companies helping it. That ball was going to hit hard regardless, but the pins were set up to fall and so they took down other parts of the economy as well, stalling out the whole thing.

Imagine if that recession were a multiple of the one that is coming.

Just for fun, let us look at a true disaster scenario, the Great Depression:

This was a period when the American public discovered the stock market and dove in head first. Speculative frenzies formed in both the real estate markets and on the New York Stock Exchange (NYSE). The lead-up to October 1929 saw equity prices rise to all-time high multiples of more than 30 times earnings, and the benchmark Dow Jones Industrial Average (DJIA) increase 500% in just five years.

The NYSE bubble burst violently on Oct. 24th, 1929, a day that came to be known as Black Thursday. The following week brought Black Monday (Oct. 28) and Black Tuesday (Oct. 29); the DJIA fell more than 20% over those two days. The stock market would eventually fall almost 90% from its 1929 peak.

In other words, it was a typical bubble. The markets seemed to take off, and the herd rushed in for an orgy of rampant speculation just like they did in the California Gold Rush in 1848. But just like in that feeding frenzy, most people were losers and only a few walked away with the gold, and the ones who did best were the ones who got out early and transferred that money to other investments.

In the new California digital Gold Rush, you will most likely see the same thing: the 1% of 1% who are real winners here will be the people who got in early, grabbed the easy money, and then got out and put that money into something tangible and self-renewing like real estate, industry or agriculture. They do not mind that these new investments are not high yield; they are stable, and Silicon Valley is not.

The old Gold Rush made San Francisco a major city; the new Dot-Com mania has made it the center of the world, or at least its inhabitants think so.

Now let us consider some of those outer pins. There are several debt bombs looming. The first is the welfare/consumerism debt bomb, followed by the pension debt bomb, the entitlements debt bomb, the government debt bomb, the education bubble, the consumer debt bomb and the demand-side economics bubble.

With the “Me Generation” set to clock out and trigger a 50 megaton airburst of retirement obligations for government, there is no way our economy will survive. The wealth boom of the victorious Allies in WWII is going to come home to roost in 2020-2040 as the Baby Boomers die off, and since all of our wealth since has not matched it, the markets are going to re-adjust the value of the false wealth through a recession.

Add to that the fact that we are dependent on debt, both in public and private, to international banks and foreign nations, many of which are unstable, and you can see how there is a layer of bowling pins behind the bowling pins of our economy. When we go, they go. When they go, everything goes.

The best part is that almost no one understands how our society works, and so they are all oblivious to the actual risk we face:

It seems that that never have so many known so little about so much. In areas where most of America resides, no one gives much if any thought to the seamless integration of so many moving parts that allow them to transport themselves to the grocery store, and get food – to utilize a myriad of appliances, utilities, technologies, and conveniences independent of their skills, education, resources, etc.

Most people, it seems, do not ever think about what would happen to their ideology and lifestyle after about ten days if the trucks, trains, and airplanes were unable to deliver untold tons of everything like clockwork. Look at the behavior of the people in the face of a few days’ disruption because of a snow storm.

So we have prime conditions for an apocalyptic market endgame. Our debt was borrowed to fund worthless stuff, just like the housing bubble. Our products are aging and no longer good for high margin returns. Markets are consolidating to a few big actors, and they are often dependent on government. Individual consumers have over-invested in these scheme and taken on a huge debt load. The entire structure is propped up and waiting for just the right strike to disintegrate entirely.

On the plus side, we have known for years that modernity was not sustainable. Modernity began with our notions that we as individuals were more important than social, natural or divine order. That creates the groundwork for the trends, fads, and panicked stampedes that create this market boom-bust cycle just like in the Great Depression. Not to mention consumerism, vapidity, mountains of landfill, environmental holocausts and a growing sense of existential dread. The death of modernity will be painful, but a blessing in disguise.

Let’s go bowling!

We Cannot Waffle Between Different Types Of Social Order

Friday, June 30th, 2017

Economics is not everything, but it is a useful indicator. In this case, it seems that the failure to Brexit is costing the UK as its economy slows:

GDP grew at just 0.2 per cent in the first three months of the year; down from 0.7 per cent in the previous quarter, and confirming previous estimates, the Office for National Statistics reported.

This means that the UK economy, which had held up better than expected in the immediate aftermath of the Brexit vote, is now lagging behind all of the other countries in the G7 group of advanced nations and all other European countries.

We are looking at two different types of social order here.

With Brexit, the UK swings to the right and lessens or eliminates its social welfare, focuses on results-based decision-making, and aims to assert strong national identity and culture instead of bureaucrats and their endless pamphlets about not smoking, being anti-racist, having safe sex with feeling-sapping condoms, and reporting your neighbors for not having the television tax paid.

Without Brexit, the UK follows mainland Europe into the Soviet-style welfare state debacle, namely spending itself into abyssal debt while having no plan for the future except to tax the heck out of the dwindling reserve of normal people who are funding all of these greedy, wild-eyed, clueless dependents.

The one thing you cannot do, UK: waffle. Pick one or the other, and the market will adapt. Obviously, the markets expressed the most confidence in Brexit, as it is the option closer to sane economic, political and social thinking, therefore means that the value of UK products, services and companies will be greater.

How To Spot A Bubble That Is Ready To Pop

Tuesday, May 9th, 2017

The last thousand years in the West have been a prole party. Liberated from the chains of natural order and natural hierarchy, the proles have run amok and in doing so, destroyed the West. It is over, and we are living in the wreckage.

A consequence of the prole party is herd behavior. Having no direction of their own, people are dependent on the Crowd for guidance, and so the herd finds itself rushing toward one gold rush or the other, leaving destitution in its wake.

Consider the Great Depression. People invested too recklessly, assuming that the stock market was a magic slot machine that just produced winners. Even worse, in an attempt to seem intelligent, they all copied one another, creating over-investment in properties that produced “false value” based on demand-side value instead of production value. As a result, the economy had to recapture that false wealth, creating a crash as massive amounts of value were simply deleted.

History repeats itself. The new cycle can be seen through an inversion in one measurement of fear in the markets:

Wall Street’s “fear gauge” has tumbled to its lowest level in more than two decades after the expected but welcome French election victory of Emmanuel Macron helped vaporise US stock market volatility.

The Chicago Board Option Exchange’s Vix index — which measures the expected short-term turbulence of the S&P 500 implied by stock options — closed at 9.77 on Monday, the lowest level since December 1993, as markets jumped over the geopolitical hurdle posed by Sunday’s French presidential victory. The gauge has only been lower on three days since its inception in 1992.

This tells us that, at this point, value is based in the confidence of buyers instead of the actual value of what is being sold. As a result, we have a bubble, which is what occurs any time the herd rushes after one investment or another and, in doing so, devalues it through greater demand than it is worth.

A correction is coming.

In trends, a few innovators get there and seize the gold. Everyone else, hearing about this down the line from newspapers or pub chatter, then rush in and imitate what the successes did. This is encouraged by the first few waves, who just want to buy something low and sell it high, escaping the inevitable crash.

The least savvy investors are the ones who end up holding the worthless investments. In the case of post-collapse West, the smart money has moved on to the future, while the brainless herd continues chasing yesterday. Dumb investments include anything demand-based or vested in the current social and political system.

So what are the smart investments? To know that, we have to ask, “What is coming?”

Clearly the current system was never designed to last. Like its architecture and consumer products, it is disposable. Its governments have spent themselves into debt, imported people who hate them, and generally sabotaged every institution possible. Its people, without guidance, have wrecked everything else.

History does not follow a pendulum pattern of swinging from extremes so much as a cyclic pattern where a working state is degraded by human entropy and then gradually restored. The future belongs to this restoration. This includes a focus on what is national and local, and therefore capable of being measured by productivity instead of demand.

Smart investors are currently looking for, instead of the “one big score” of Google or Apple stock, partial ownership in concerns which will always be vital because they create products necessary for local consumption.

An Economic Argument Against Equality

Tuesday, April 18th, 2017

We know that there are practical arguments for the failure of equality on a biological level, namely that it eliminates striving for improvement and creates a downward pressure — averaging — instead. If we look at equality on an economic level, we see that this problem replicates itself in a different form.

Equality means that mediocrity is equal to superiority in terms of social value. This makes mediocrity more efficient because it requires more work and attention to achieve superior results. If the outcome is the same, choose the approach that requires the least amount of work; through this mechanism, the mediocre becomes superior to the superior, at least as far as the individual is concerned.

This economic efficiency explains the soft drinks, fast food, junk mass culture, mediocre appliances, inept bureaucrats, mentally lazy voters and other aspects of the blighted modern landscape: when no one is interested in quality, people do not lose jobs or income for being mediocre, and since that gives them more time for themselves, they become active apathists who deny reality.

At a mathematical level, far below the delayed consequences to biology and social order, equality prioritizes the efficiently bad. Whatever is easiest to do wins out over quality; quality, in fact, becomes an impediment, because it is an unreturned cost. Equality is a bias against quality.

With this thinking in mind, it makes sense to replace food with rehydrated soy product, and to serve people carbonated sugar water instead of real beverages. The simple, repetitive song becomes more important than the symphony. Easy-to-understand lies are more effective than complex, less dramatic truths.

Our civilization has undone itself with the idea of equality. However, through this economic analysis, we also see why individuals choose equality: they are guaranteed acceptance, inclusion and validity without having to prove themselves, which means that for them they achieve greater efficiency through mediocrity. Do the minimum, and reap the full reward.

Over time the efficiency of this approach breaks down because it reduces the value of social participation. A dying society where every person is a selfish promoter of mediocrity has little to offer, but once it was a thriving civilization, and then its carnies, snake oil salesman, sycophants, priests, neurotics, parasites and enemies joined together to leach out its value.

Much of human activity for the past several centuries has involved concealment of this simple logical fact. When there is no distinction for doing things the right way, you get less done the right way and more — across the board — done to a minimum standard. This naturally causes social order to unravel and makes people bitter, hateful and prone to take all they can and give nothing back.

As we come out of the centuries of spaced-out delusion, we can again face these simple but prevalent truths about equality. At that point, our only decision is whether we want to encourage mediocrity or superiority. There is no other option.

The Three Valid Purposes Of Money

Wednesday, October 26th, 2016

karl_marx_has_aids

Most people out there will tell you that money sucks – when other people have it. A Gab.Ai user named Duke Norfolk who I chatted with this morning reminded me of how badly most people misunderstand money.

Unfortunately most people never understand the real underlying truth about the cause. Talk of monetary policy and the Deep State just goes right over their heads as their eyes glaze over. Instead it’s all emphasis on symptoms: stagnating income, rising educ/healthcare costs, etc.

Money, quite bluntly, is a tool. Take a decent course in money and banking and you will learn that it does three jobs.

  1. Medium of Exchange. As a medium of exchange, money allows producers and consumers to avoid the transactions costs associated with barter or forced redistribution. This allows people to find what they need when they need it and to easily pay for what they want or to accumulate wealth.

  2. Unit of Account. A rich and powerful Alpha Male made the following comment about money:

    Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.

    Denominate all securities, all bank accounts and all prices in one currency, and you have comparability. It solves the information problem, as long as you believe in the prices and valuations. A universally accepted currency improves the quality of decision-making across the board.

  3. Store of Value. A well-designed money is supposed to hold its value. You put your wealth in dollar-denominated account, and you can get it out ten years later and still have as much money. Oh wait… Saving.org uses the officially reported CPI and claims that a person who stuck $10,000 in a bank in 2006 now has $12,018.55 in purchasing power. I’m amused. They are claiming an adjusted rate of return of r=1.86%. Not good, but also probably not accurate. This is in comparison to an annual inflation rate of 2% a year, which would imply a nominal rate of return of 3.86%.

Yet it is entirely possible that most consumers don’t experience anything like 2% CPI. John Williams of Shadowstats calculates CPI based on how it was previously done in 1990. This gives an approximate rate of inflation as 5%. This gives us something on the order of r=-1.14%. This “allows” you to put $10,000 in a bank in 2006 and retrieve $8,685 in 2016.

If you haven’t been bemused quite yet, let’s examine what happens if we use the 1980 formulation to estimate CPI from 2006 to 2016. We get a CPI of approximately 10%, for a real rate of return = -6.14 %. Bank $10,000 in 2006, and you get a stored value = $5,306. And all of this is before we calculate state and federal taxes on the 3.86% interest.

Just what sort of Dickensian bank takes in $10,000 in deposits and then allows you maybe $5,300 back? An Amerikan one. The dollar is not fulfilling all three fundamental purposes that a currency really should. This is why we hear the whispered talk of a dollar collapse. I don’t see it going down in a day. Why should it? It goes down a little at a time every day.

The dollar, like most of the rest of our once great culture, is getting sucked into the soft apocalypse. This debasement of our money to pay for a deficit we could never manage under normal circumstances only taxes you a little at a time. Then you wonder why in the heck your salary and your savings can’t afford to buy you anything much at decent value.

Once you understand what money is supposed to actually do, you understand how Amerika’s chosen money only partially fulfills the job order. Like everything else in Amerika it is a substitute for the real thing designed to force you into servitude, and it’s getting worse. It will do so until we all wake up one day and wonder what in the heck happened. That’s the incidious danger of a soft apocalypse.

The Liberal Democracy Bubble Pops

Tuesday, October 25th, 2016

commodore_pet

Some of us have felt for a very long time that democracy, like the Mongols, simply arrived with such excellent timing that its success far outpaces its capabilities. In particular, liberal democracy arrived in the West just as the industrial revolution was getting off its unsteady feet and starting to run.

This has made it nearly impossible to oppose liberal democracy. Not only does it have all the appearance of good like Jane Austen’s Mr. Wickham, but it also seemed to be succeeding. The numbers kept going up as did the power, and when enemies like those evil Nazis arose, we could beat them back with our industrial might, much as the Russians crushed them with excess population.

However, signs point to a slowing of this “bubble” existing between implementing democracy and seeing the failure of its intent. The industrial wealth-blast may have been temporary and, under assault from Leftist behavior, it could be further sliding into oblivion.

The most worrisome sign is that productivity has slowed:

There’s general agreement about the factors that improve productivity. Investment in machinery and equipment increases production levels and quality. Education and training improve worker skills. New products, technologies, organizational structures and work arrangements – in other words, innovation – raise efficiency. A healthy climate for entrepreneurship and competition encourages the creation of faster, smarter businesses.

Unfortunately, there’s also general agreement that productivity gains are flatlining. In advanced economies, productivity growth has fallen below 1 percent annually, significantly lower than the 3 to 4 percent common in postwar decades and even less than the 2 to 2.5 percent of the last decades of the 20th century. Similar trend lines are beginning to appear in developing nations.

An alternate theory goes thus: once we were a vital people with a strong culture. Then we adopted liberalism. Technology, which increases over time by its very nature, brought great wealth which enabled Leftists to implement many of their plans because previous plans “seemed” to have succeeded.

Degradation came not swiftly but slowly. People became less competent and more likely to rely on social cues for their thinking and government for their life-plans. Equality programs forced the workforce to swell and social order to dissolve. Over time, people became more helpless as they came to depend on government and society more, and simultaneously saw the futility of resisting the crowd.

By the second half of the twentieth century, people lived in existential misery. Life was a hamster wheel and any acts of significance or beauty were ground down and replaced with the angry mass culture of the proletariat crowd. Good people were ignored, while the criminal but flattering were advanced. All public figures were idiots.

Without hope of goodness, the Western people basically collapsed. At this point, the Leftists brought in new people who were less prone to existential despair or really, existential thoughts at all. They just did what they always did, and people assumed that with the right laws and education, these people would become exactly like the old ones.

Then the computer boom hit. Everything got more efficient, it seemed. But starting in the late 2000s, it became clear that this too had stalled. For every productivity increase, we added more nonsense and made people more miserable. The talented dropped out, leaving only those who were happy with the hamster wheel.

Now productivity is dead. The reason why is that the talent that built the West is either loafing through entry-level jobs or living in a van down by the river. The people who could not have built the West are in the positions of power and influence, and their decision-making ability is mediocre at best.

The immense gains in education and skills over the last 50 years may not be repeatable.

What we refer to as education and skills have failed to demonstrate their utility. We have educated more people to be computer programmers, but few of them can write effective code, so it is constantly glitching and breaking. Many of these skills add nothing to the economy, but keep people employed in jobs that are legislative or civil rights creations.

In the meantime, people have the lowest sense of commitment to their national economies of any time. Where once there was loyalty, now there is an adversarial relationship: the nation is that which threatens to get one fired for the wrong opinions, and enforces endless taxes, delays, red tape and other soul-killing tedium upon the citizen. Not surprisingly, people want to see their nations — represented by government, media and academia — destroyed.

The experts, who are themselves incompetents who advanced because they drove out the sane, will come up with many clever reasons for this drop in productivity, but none of these will have any relation to reality. Instead, the decline will continue until all the smart people are living in shacks in the country and the cities survive only on taxes.

Even worse, the idea of the economy may be fundamentally dead:

Even if productivity growth could be revived, it’s not clear those gains would have as much of an impact on living standards as in the past. Simply being able to make more stuff isn’t terribly helpful in an era of excess capacity and also weak aggregate demand. Many innovations actually eliminate jobs and depress wages. They allow a few creators to capture large benefits but don’t aid the majority of the population.

When populations have nothing in common, behavior falls to the lowest common denominator. That means that relatively few things are done in any significant number, and everything else falls off the scale. This means that a few large companies will dominate most of the economy, and everyone else will work in a support role which will be eliminated eventually by standardization.

Without Leftism, this would not have happened. Society would have structure and a balanced economy not based on consumerism. More activities would occur, at a higher level of pursuit of quality of experience, which would mean a proliferation of local companies instead of large corporations. And with fewer regulations and lawsuits, companies could make decent money without having to make cheap products sold at a high cost.

It seems that the wealth bubble was short and, thanks to Leftism, we have squandered it. This is always what happens when the mob is given the power of leadership. It chooses the things that make it feel good, and these generally consist of reality-denial. Then, after a bubble before those consequences arrive, the end comes swiftly.

Make-Work

Sunday, October 9th, 2016

make-work

This is a typical event for the modern consumer:

He needs a service — given that there is great confusion between “want” and “need” — so he signs up for it. He then finds out that it does not work with his existing technology, a common type. There is a work-around: he can use another gadget, but it will be so cumbersome as to render the whole process inefficient.

He goes to the website of the service provider. There are separate websites for sales and service. He logs into sales, then goes to service, where they ask him for a customer number. He has not been given one. For this reason, he cannot login to the service he needs to explore other options, although by looking at what others have written, he can see those do not really exist anyway.

This leaves him scratching his head in wonder. Why is it that the service is so bad, and yet still popular and profitable? Does the company know its website does not work? Why do they not provide the service on the type of gadget he has, just as many hundreds of millions of others do?

Our society retires people because after forty years of observation, they know the workplace jive too well. The people who are advanced to the top are the Hillary Clintons of the world: good at the type of questions they ask in school, smugly self-serving and ready to justify their actions in terms of good intentions.

Let us look at the company that our hypothetical consumer has encountered.

At the top is a businessman. He knows he has a product that people will buy, and they buy enough of it that he can afford to hire a bunch of idiots. He hires idiots because they will not threaten him and take his company from him. He does not care about the quality of the product.

Below him are chattering women and flabby men. These are the middle management layer. Their job is to neurose. For example, when they considered expanding their service to another type of gadget, the people here Did The Right Thing, which was to send off for an exploratory study, a consultant, a feasibility study and a prototype. They hired many people out of the office and generated eighteen metric tons of memos, reports, studies and white papers.

They will not make the service for a new gadget because their experts tell them that it is a bad idea. The experts make money by being contrarian, or telling people that what is true is what is contrary to obvious common sense. The people in the business want to avoid taking risks, but since any action is a risk, this means they want to avoid action. Instead they want to spend their time on the process of being at a job, instead of trying to achieve anything.

To keep the process of the job alive, they will insist on the most mind-numbing tedium possible. They will call many meetings. They will have paperwork requirements for every activity. Every task will become formalized, awash in process and procedure, and will reference at a least a dozen books stating the obvious. To do even a simple task will take months.

For example, they will eventually roll the service out for the other type of gadget. After the exploratory and feasibility studies, the planning and budget meetings, the buy-in by all of the divisions, the marketing and legal sniffover, and then soliciting for bids and choosing vendors, it will take them a year to get the process started. Then, because no one will have thought about the practical dimensions, half of the necessary decisions will be unmade. It will take another five years of back-and-forth between the company, its vendors, and its internal meetings to even get a prototype ready, and at that point, the market (and our hypothetical consumer) will have all but moved on.

The point of jobs is that one must rationalize. The worker must be at a job, so that is good. Then they must succeed at the job. Herein is the problem of equality that guarantees that all jobs will be make-work: when all people are equal, no one is considered for his unique abilities, and so any failure is considered “equally” independent of what he was trying to achieve. This is why the do-nothing working who never does more than just act out the process of the job will always be promoted, but someone who takes a risk by attempting something more than just acting out the process of the job may get fired.

After a few years, the only people left at jobs like these are those who are fascinated — downright excited! — by tedious and inconsequential make-work, or work activity designed to show conformity to the process of the job and therefore, “good work” according to other minds hampered by egalitarianism observing them. They drive away the competent and select for the useless.

This is why the website is broken. The people involved at the time knew it would not work, but knew that they were taking a career-ending risk by mentioning it, so they said nothing. The email address for complaints goes to someone who left the company three years ago, and piles up in her inbox.

The IT guy knows that if he says something, he can make enemies in the company of those who will now have to sort through the email. So he says nothing and simply increases the allotment of space for the account when it fills up. Customers write complaints, those go nowhere, and no one “notices” the broken web site because to do so is to take on risk.

At a job, taking any risk is bad because under egalitarianism, any failure is presumed to be a fatal failure. We cannot look at someone and say, “Sure, Charles hosed that website launch, but he is smarter than the rest of that group and he usually gets good results.” No, in order to placate the herd, who might rebel at any time, we must crucify him.

We destroy people in this society. It is our pastime, since we no longer have a goal and have not for many centuries. We all demand attention, which is why if someone steps out of line, we smash him down. He has threatened the stability by which we all receive attention and/or paychecks. The expectation has become reality because at this point only the very brave or very crazy take risks, knowing the intolerance that failure receives.

The Soviet Union also had this problem. Those who failed to deliver were shot. Since they were often given impossible tasks, they were frequently shot. The end result was that anyone sane refrained from taking any risk possible. That means that if you have a fire risk in your factory, you ignore it, because it is greater personal risk to try fixing it and fail than it is to have a fire. That can always be blamed on the capitalists, anyway.

Jobs are jails. Most of what makes them jail-like is that they are not oriented toward goals, but conformity to the process of work and avoidance of risk-taking; in other words, appearance matters more than reality. Obedience matters more than achievements. And so, people check out. Blatant errors are not noticed. Incompetence and ineptitude rule the day.

As we gather to write an epitaph for post-democracy Western Civilization, itself an epitaph of Western Civilization after it went individualistic after giving up on the ability to get consensus for another Golden Age, we should not forget to note the many ways that this time has failed us. Jobs and incompetent services seem small until you consider that these take up most of most days for the average person.

When it is said that our society died of a spiritual disease, this is true. People have no hope of anything except going along with the conformity and hoping for a regular paycheck. The thought of ambition has died, except in the narrowest sense of piling up money, as has the ability to be noticed for competence, intelligence or other inner traits. In the name of including everyone, we have created a hell on earth.

It won’t be good when we all buy a clue

Thursday, January 7th, 2016

There are some very smart, truly ruthless people who get that Amerika is on fire. Aaron Clarey explained the process above. The nicer ones will tell you quietly and privately that our economy is dying of leprosy. They are making their discreet plans and subtly edging their way towards the exit.

They aren’t quite ready to yell “Fire!” yet. They’d rather have you believe it’s just unseasonably warm because of El Nino and Global Climate Change. But what happens when the slower ones catch on? At that point the resulting confusion should be more amusing than Father’s Day in Mobile.

You’ve heard of Bitcoin, but probably haven’t read up on SETLCoin. SETLCoin is how Goldman Sachs firewalls itself off from the economy upon which it feeds like a vampire. I’ll fill you in on the details.

On November 19, the United States Patent & Trademark Office (USPTO) published Goldman, Sachs & Co.’s patent application 20150332395 or “Cryptographic Currency For Securities Settlement.” Described are “ […] methods for settling securities in financial markets using distributed, peer-to-peer, and cryptographic techniques ” using a cryptocurrency named SETLcoin. The application lists Paul Walker and Phil J. Venables as the inventors of the technology.

Paul Walker is the co-head of technology at Goldman and a member of the Board of Directors of the Depository Trust and Clearing Corporation (DTCC). According to Nathaniel Popper’s book “Digital Gold” and his adaptation for American Banker, “When Goldman Sachs Began Flirting with Bitcoin,” Walker led a panel to educate the banks clients about virtual currencies. Popper writes that Walker, “indicated that the bank was taking a hard look at how the blockchain might be used to change basic things about how banks do business.”

Maybe a few of the Sheeple have elected to awaken and are fearing the wolf that is gorging on their economic future. The DOW is off 400 points to start off our brave new trading year, and the Chinese stock exchange had to shut down automated trading after 7 minutes.* The same guys patenting their backdoor currencies tell us to pay these omens no mind.

It’s more drama than data. Mid-east geopolitical conflict driving a lot of today’s moves. Stocks & bond yields down. Gold & dollar up. — Jeffrey Kleintop (@JeffreyKleintop) January 4, 2016

Jeffrey Kleintop may be accurate. It could go right back up the rest of the month. It may be that every other currency on the globe sucks compared to the dollar and it may be that we remain the finest battle charger in line for the glue factory. As long as the US of A can export the impacts inflationary bubbles in the form of our currency, we get to have our cake and eat it too. However, the reasons we saw the sell-off may be more durable and more profound. It could be that an awful lot of rubes have figured out how worthless their assets have become and are now in a race to cash them out while somebody else still thinks they have some intrinsic worth.

Would it be “Mad Max?” Would it be “1984?” To quote one idiot on YouTube, it could even turn into “Marshal Law!”** Well no. At first, it will turn into Argentina instead. Things will just gradually stop working. It will fall apart at the rate at which entropy functions. You just lose functionality 1 system, 1 machine, and 1 location at a time. But this isn’t fun. My opening paragraph promised a good, amusing wreck. What I’ve described above is worse than watching a 500 mile NASCAR race and not seeing a single Redneck hauled off on a stretcher.

The fun starts when people no longer believe that things will all work out OK. Amerika is a faith-based economy. They laugh at me for believing in Jeebus Da Sky Fairy, but then tell me that The US Dollar is the world’s reserve currency and therefore does not have to be intelligently managed or adequately collateralized to be an effective store of value. When Thomas logically disbelieved in The Holy Ghost, Jesus could put up rather than shut up. He was totally prepared to let Thomas see the nail holes in his hands. Am I an apostate for holding Paul Krugman or Janet Yellin to a similar skeptical standard?

The real collapse and secular version of gory scenes from The Revelation will occur when about 300 million people decide the US Dollar is only is as good as the full faith and credit of the United States Government. At that point they ask themselves if they would logically trust either George W. Bush or Barack Obama. How you answer both of these questions should allow you to make a logical estimate of how long it is before Amerika dies in the ditch like the banana republic it is increasingly becoming.

None of us know the hour or even the day upon which the male bovine scatology gets completely disbelieved. But we do have a pretty good idea of the timescale. The timescale is not much longer. The milestone event that future historians believe constitutes the official fall of The United States of America will undoubtedly occur during most of our adult lifetimes.

* – That doesn’t ever happen because people are doing too well.
** -My hands and face are not big enough to adequately facepalm this. The term is Martial Law.

How sending women to work scuttled our economy

Sunday, November 24th, 2013

jobs_are_jailsThe right fears theory because it is accustomed to the arbitrary abstractions of clever people who work very hard to justify the herd-instinct and its source, the individualism that conceals a fear of insufficiency.

However pure theory is often the best way to argue, because unlike facts, it cannot remain “spun,” or adjusted by the context of its presentation from logic to a “talking point,” or verbal meme that resembles a logical argument but is in fact rhetoric.

To start thinking logically in that way is against all that you’re taught. Opinions are opinions, but facts are real. Except that fact is often buried within the presumption of a certain ideological spin, so facts aren’t even facts.

One area to which we should turn our brains is the ongoing instability of our economy. For most of the modern era, the economy has been unpredictable and sometimes, it turns on us. A factor in this unpredictability is our leadership and tendency toward social trends, but another looms larger.

When we started sending women to work, we began doubling our workforce. This is great in theory but for employers only. More workers devalues the cost of any one particular worker because there are more alternatives. But then the question is what type of job is filled.

Every business can separate its employees into two general categories. There are those who serve a role in the production of the goods or services that make the business money, and then there are those in administrative or bureaucratic roles.

For example, if my company makes widgets, the factory workers, engineers, truck drivers, managers and purchasers directly contribute to the widget-making. However, the people filing paperwork, paying salaries, processing employee complaints, and ensuring compliance do not.

That is not to say that some of those staff are necessary. However, with more regulations, we need more of them.

When women were placed into the workforce, most of them took jobs that were not already filled. A good portion of these were administrative; not coincidentally, this category has swelled dramatically in the last fifty years.

One reason a category swells is because it can since there are not only people who take those jobs, but people who will depend upon them. Thus it seems cheap at first to hire more, and then more.

If you wonder how we got to the point where most jobs involved four hours of actual work per week, and 36 hours of attending meetings, filling out inconsequential paperwork, reading email, being on conference calls, etc. this is the source: the jobs themselves aren’t important.

When women entered the workforce, we needed to find a way to hire all these new people who would need the income. We diluted job roles in order to make room. This in turn made jobs boring, except for people who enjoy the social aspects of the job, which are all of the non-work parts of the job.

By insisting on this universal participation, we’ve changed jobs from having purpose to being a process of attendance and compliance. Even further, this has diluted productivity. We have made most jobs or most of jobs fully extraneous.

The result is that industry moves more slowly, and has a higher cost in those jobs which are not related at all to the production of widgets. This is the new norm, and most people are afraid to criticize it.

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