Archive for the ‘Business’ Category
OK, Facebook’s much hyped IPO was a flop, shares are now selling for less than what they were originally offered for. This means that anyone who ran out and bought Facebook stock as soon as it was offered is feeling mighty stupid now, which most definitely does not include me. There are already claims of improprieties about the whole deal, which may or may not be true. For my purposes this is a lovely little example of how the American financial system is rotten to the core. (A major theme of my last post, I’m on a roll.)
The first thing, and the thing that I would have thought would be obvious, but what, exactly, does Facebook do to make wealth? Well, nothing. They have no products, farms, factories, mines, etc. Facebook doesn’t produce a damn thing, it is merely a vehicle for siphoning money out of millions of people’s pockets via advertising and its unseemly host of related gold mining schemes. Facebook is purely a middle man, and it’s not even an original middle man, it replaces smaller middle men at the very best. It’s what I call a purely parasitical industry, it creates nothing of its own and sucks money from other parts of the economy. Now this is not necessarily a bad thing in and of itself, it’s that it was touted as some great new stock, as if it was going to be some prime part of the new economy. An online social network? Really? As far as I can tell, I’m one of the few people who is pointing this out. There was a time in the USA when a prime stock was in a company that actually produced wealth: Auto companies, oil companies, and even on through computer companies, great stock was in company that had a great product. Now a stock seems to be mostly valued by how much it can go up in price. This isn’t value, it’s gambling.
It gets worse. Doesn’t anyone remember what stock used to be in the old days? In the 1960s and before? The stock market, as it was originally conceived, was a way for companies to attract investors so that it could expand its operations. And by ‘expand its operations,” I mean build things, hire people, and just generally be a productive part of the economy. This was how it worked, this was capitalism, and it was a wonderful thing. This isn’t how the stock market works anymore. For one thing, it can’t, because the wealth of the country is owned by a tiny handful of families. Capital can’t be raised by selling stock to the masses anymore, because for the most part the masses don’t have any money. And what was Facebook going to invest all the money it raised in? Nothing, the whole idea was for the stock to rise rapidly in value, and a tiny handful of people would have become fabulously rich. Again, this isn’t capitalism, it’s gambling.
Except of course in most gambling, the game isn’t rigged. There’s one more gambling example. Ever heard of day trading? That’s where people buy and sell stock over the very short term and try to make a profit. Think about this, how, exactly, does it benefit a company having someone own some of its stock for a few hours? It doesn’t that I can see, and this is a perversion of what the stock market is supposed to be. And who profits from this? The brokerage houses that handle the buying and selling of stock. In fact they make a profit no matter if the day traders win or lose. And the day traders are gamblers, make no mistake about it. So basically the people running the stock market turned it into a casino. This is madness. And this is the sort of mind set that came up with ever more complicated financial shenanigans that made the people at the top wild wealthy on paper, and destroyed the economy and gutted the poor and middle class in the process.
And this all happened slowly, over decades. Even as a teenager I remember when all of a sudden in the early 1970s Savings and Loans sprung up on every corner. And I couldn’t help but think, gee, these are some expensive buildings, who is paying for this? And it’s gotten worse since, and it’s clear who is paying for it. The only thing that I wonder about now is when the American people are going to wake up and realize that they’ve been had by both parties for decades.
I hope I’m here to see it.
(The above image is from Wikipedia and is reproduced under a GNU Free Documentation License. It’s a casino. And Wall Street. At least in casinos they don’t pretend its anything but gambling. The rise of legalized ambling is also part and parcel of the rot infecting America, topic for another post there for sure.)
I know I have discussed many of these before some of them at great length. There are several aspects to this list. For one thing, each of these ten items is something that has occurred since or was a radical departure from America in the 196os. An America whose schools, infrastructure, health care, and middle class were the envy of the world. And each of these things has been an epic fail, something that has cost the nation staggering sums of money and/or blood while simultaneously making the situation worse. And lastly, it’s the sum total of all of them that is alarming. Any one of them is a national calamity, with all ten of them (and likely a few more I didn’t cover,) its beyond me how the future can be anything but bleak. In no particular order, and there is some overlap:
1. The War on Drugs. Hundreds of billions of dollars spent, whole police forces, armies and even governments corrupted by drug money, countless lives ruined, tens of thousands dead … and drugs are as cheap ana available as they ever were. In fact the only drug that has seriously declined in use since this prohibition madness began … is tobacco. Americans in the 30s were able to understand that prohibition was creating more problems than it solved, not so much today apparently.
2. Public Education. In the 1960s the USA’s educational system was the envy of the world. It was actually possible for people to work their way through college. And the whole point of the educational system was to produce well rounded peopl who would be enlightened and productive citizens. Now it produces standardized tested drones designed to be cubicle workers for corporate America.
3. Prison Policy. California illustrates that nicely. In the 1960s CA had an incredible prison system that concentrated on rehabilitating prisoners. And the recidivism rate was the envy of the world. Since then California has gone to a prison policy of “punishment only,” and the results are predictable. Prisoners are dehumanized by prison, and completely unprepared for society when released. So the recidivism rate has gone through the roof, and huge numbers of people are imprisoned at vast public expense. It’s literally insane.
4. Afghanistan and Iraq. Trillions spent, tens of thousands of Americans dead and maimed, and the only thing we have to show for it is we are more hated than ever. Even ARVN (South Vietnamese) troops didn’t kill our GIs, Iraq has allied with Iran, and our Afghan allies kill and wound our troops almost daily. And Obama with a straight face says both invasions are both “victories.” Right.
5. Health Care. France provides its citizens, every one, with cradle to gave health care that is the envy of the world for about 11% of their GNP. The USA spends 16% of its GNP on health care and provides its citizens with the worst health care in the developed world. Not only are Americans paying through the nose for the shittiest health care in the developed world, many of them are deluded into thinking its the best health care in the developed world.
6. War on Terror. Staggering sums of money spent, the largest expansion of government since the 1930s, government power to intrude on American’s lives expanded and still expanding … to defend against a threat that is so small it is statistically zero. That’s right, an American’s chances of being killed by terrorists have remained the same forever, essentially zero. As threats to our lives terrorism is not even on the radar.
7. Infrastructure Fail. Again, in the 1960s America’s infrastructure was the envy of the developed world. And since then spending has been diverted into the military, and what spending does get made on infrastructure is so rife with corruption that mind numbing amounts of money get spent to accomplish very little. And we are now two trillion dollars in the hole.
8. War on the Poor and Middle Class/Upwards Transfer of Wealth/Legalized Corruption. This is a big one, in some senses the biggest one of all. From the end of World War Two until the late 1970s rising tides did lift all boats, and the American middle class was the most prosperous the world had ever seen. Since then the rich have gotten richer while everyone else has lost ground, and this has been very deliberate and systematic. This is trillions of dollars that has been taken out of circulation an invested in offshore bank accounts, if such a word like investment can properly be used.
9. War on Science. In the 1950s and 1960s everyone knew that science and scientists were one of the core things that had led America to greatness. Not so much anymore. And a huge percentage of our science infrastructure is now devoted to military research, or simply devoted to subsidizing corporate research in what were once public colleges and universities. This has impoverished us all from any number of perspectives.
10. Theocracy in America. I don’t know what else to say, a significant minority in the USA is bent on turning the USA into a Biblical Theocracy. This is crazy on so many levels, the first of which is that biblical prinicples fail as any sort of social policy. In the Bible punishment and prohibition are the only social policies, both of which are demonstrably the least effective social policies.
I could go on. And these all tie together in horrible ways. One of the most obvious is that there are powerful institutions and forces working very very hard to make sure that none of the above change. The prison lobby isn’t interested in rehabilitating prisoners for example, they want as many prisons and prisoners as possible. And they’ve succeeded, with 5% of the world’s population we have about 25% of the prisoners. A staggering waste of money and resources when it comes right down to it.
That’s the crux of it: staggeringly wasteful spending that doesn’t create any wealth whatsoever, but it enriches a tiny number of people who fund powerful lobbies to keep it so. Often with horrific unintended consequences on the side as well. This is no way to run a nation.
And most Americans are oblivious. Or worse.
(The above image is claimed as Fair Use under US copyright law. It’s not being used for profit and is central to illustrating the post. It’s from the History Channel program Life After People, a show that I heartily recommenced and encourage people to watch.)
I was planning posting a post about the Iraq War today, but alas it’s not finished. And it’s a post I want to be fairly polished before publishing, a war only ends once so I have to get it right. So … quick random burblings about whatever comes to mind in the hour before I have to head out into the rain to fix people’s plumbing. It’s going to be easy, becasue the world is going to hell in a hand basket, lots of bad news to choose from.
Things are going from bad to worse in Afghanistan. Hard to decide what is more disturbing, the media and government completely misrepresenting the situation, or the republicans almost gleefully using it to score political points against Obama. If chortling over American deaths can really be called scoring points, the republican party didn’t lose their moral compass, they are using it backwards. We may be forced to leave soon, it’s becoming clear that they all hate us, we didn’t have South Vietnamese troops turning their guns on Americans in Vietnam (not that I recall at least,) but it’s almost a daily occurrence in Afghanistan now.
Moving right along, the Republicans as part of their “abandon all morals ye who enter here campaign,” have more or less declared war on women, introducing new and increasingly misogynistic laws on almost a daily basis now. It’s about putting women back where they belong, in the homes breeding and raising children. Newt even just came out and said that women who use birth control are sluts. Same ol same ol, a guy who sleeps around is a stud, a gal who sleeps around is a slut. There’s even a holocaust denier and former American Nazi Party member trying to get on the Republican ticket in one state, though at least so far the Republicans aren’t going that far. Small comfort.
North Korea has agreed to stop enriching Uranium, allow international inspections of its nuclear facilities, and stop missile testing in exchange for food aid. It’s a good sign. I suspect the USA will put so many other preconditions on the deal that nothing will come of it, but who knows. I keep thinking that maybe somewhere in the primitive lizard brain that is now Washington is the dim perception that we can’t afford to police the whole world and that we need to actually dial back some of our overseas confrontations. What can I say, I’m the eternal optimist.
Syria is basically close to civil war at this point, peaceful demonstrations having given way to armed insurrection. Again as in Afghanistan, what a mess. Like all dictatorships in nations that don’t have a real national identity yet (it takes more than just drawing a line on a map to make a nation,) the rulers are very much all from the same religious and ethnic faction. So it’s as much a fight for the majority trying to get their share of the pie as it is a fight for freedom and democracy. I’m not even going to guess as to how it’s going to end, but I think it’s safe to say it isn’t going to be pretty.
And I’m pleased to end on a good note. All those bailouts and the stimulus plan have worked. Yes, the stock market is back to where it was before the crash! Isn’t that great, the people who destroyed the economy by accumulating ever higher piles of funny money at the top of the pyramid have all gotten their money back. And of course with the rich being super rich again, surely the trickle down theory will finally kick in and they will re-invest this wealth in America and we will all have good paying jobs again soon! Yes, the American dream still lives.
(The above image is claimed as Fair Use under US copyright law. It’s all over Facebook so I think I’m good. I don’t know who holds the copyright but the speaker is Anne Hathaway at the 2008 Human Rights Campaign Dinner. YouTube: http://www.youtube.com/watch?v=jZuIdQVEVY0. I posted it because it illustrates a point about the gay marriage “debate” that numerous judges have now based their rulings on, the only objections people have to gay marriage are predicated on Biblical teachings. Prejudice is not a valid reason to deny people their rights. If gay weddings bother you, don’t go to them when invited.)
Image brought to Doug’s Darkworld inspired by the Oklahoma Senate, which just passed a bill claiming that a fertilized egg is a human being. We live in an interesting age, but when one tries to enforce a bronze age morality on a 21st century nation, the going really gets weird. Bottom line: It’s OK for people to have sex for reasons other than procreation. Really, try it some time, you’ll be surprised. As soon as we get that settled, the sooner we can go about sensible ways of making sure that every child is a wanted child, but sadly the evangelicals are never going to give up on sex. It’s how cults control people. It would be like a government giving up taxation, aint gonna happen.
Whitney Houston died. Whitney who? This story got vastly more press than it deserved, but that’s the corporate fawning media at work, real news get short shrift, dead celebrities get top billing. Yes, the mainstream media is now little different that the celebrity magazines by the checkout counter at Safeway. The state of New Jersey is even going to fly its flags at half mast for Whitney, so yes, it can always get weirder. Some aren’t exactly thrilled by this, who can blame them?
The UN has condemned the Syrian government and asked them to step down. Yes, an organization touted as being a way for states to avoid conflict with each other is now simply the enforcer of western hegemony, the US and its allies get to decide what a legitimate government is. The usual burblings about it being about human rights, like the bloody sores that are Iraq, Afghanistan, and Libya were. Only tyranny and discord can be imposed on a country from outside, freedom can only be had when a people chose to be free … which of course is what the west is so freaking terrified about in the Middle East. They aren’t afraid of terrorism, that’s to distract the rubes. The real fear is powerful sovereign governments running their countries in their own best interests. Can’t have that, it makes it almost impossible to exploit them for their resources.
Speaking of fake scary again, Iran made its heralded nuclear announcement. Which got zero news coverage because they announced that they had installed their first domestically produced fuel rod in a reactor, and that they had made a breakthrough in medical radioisotopes. All under constant western supervision of course, since Iran’s peaceful nuclear program is carefully monitored as per its obligations under the NPT. Iran being a peaceful responsible player isn’t part of the crazy mullahs meme, so I doubt anyone even saw this in the news. No, just the stories about purported amateur Iranian plots to kill Israeli diplomats, stories so fishy one has to hold their nose while reading them.
Greece. What a mess. My current understanding is that the crux of the whole Euro thing, is that everyone borrowed beyond their means on the assumption that the world and national economies would continue to grow forever and outpace the debt. Yes, basically every nation in the west acted like a crack head with a credit card, and now the bills are coming due. All in collusion with the bankers of course. If people really understood that, capitols would burn. So instead a fall guy has been found, Greece. If the bankers can just get the population of one county to agree to be serfs to pay off the bankers debt, maybe others will follow. I don’t think it’s gonna work, people may be sheep, but they are going to notice if serfdom is brought back.
One would hope so at least. Have a great weekend everyone.
(The above image is claimed as Fair Use under US copyright law. It’s all over the Internet, I have no idea who to attribute it to. Redefining reality to promote social control, that’s religion in a nutshell.)
Despite the veritable bullshit storm of nonsense tossed about by the corporate media (owned by the very people who are being protested, go figure,) the philosophy of the Occupy Wall Street movement is very simple and can be explained in six one syllable words: End the war, tax the rich. Not complicated at all, not hard to remember. Easy to explain to liberals and conservatives alike, easy to explain to anyone who still thinks the mainstream media or the two parties represent the interests of Americans. Anything else is a distraction and a diversion.
And no, they aren’t saying we should surrender to Al-Qaeda. They are saying that spending more money on our military than the rest of the planet combined is insane. That waging counterinsurgency war in half a dozen countries is madness. (You’d think we’d have learned that one in Indochina.) The best way to support our troops is to bring them home, they are dying overseas for nothing. We have enough nuclear weapons to flatten any nation that dares attack us, there’s no need to spend endless American treasure and blood trying to force democracy down the throats of tribesmen on the other side of the planet. When their people are ready for freedom, they will seize it, as the Arab Spring is showing us as I type. There are better alternatives to endless war and limitless military spending, trust me.
And then there’s “tax the rich.” A quick review: The USA has gotten vastly wealthier since the mid 1970s. Virtually all of this new wealth ended up at the very top of the pile. Through rented politicians giving the rich tax cut after tax cut, to rented politicians gutting depression era regulations intended to the prevent the sorts of financial shenanigans Wall Street used to steal trillions of dollars. I’s been more than thirty years since Reagan sold Americans on the cool aid that if the rich get tax breaks, they will run out and hire people. The so called trickle down theory. Well, guess what, turns out if one gives the rich tax breaks, they put the money in an offshore account and start pleading for the next round of tax breaks. Reaganomics has failed, it’s time the rich to start paying they same share of taxes as the rest of us.
The media is of course doing their best to discredit, ridicule, and trivialize the OWS movement. The want people to think that it’s all about a bunch of incoherent pot crazed hippies causing trouble for the sake of causing trouble. That the media is going to all this trouble shows just how scared the establishment really is, since virtually always they simply ignore protesters. Sadly it may work, there’s still tens of millions of Americans still convinced that the Republicans or the Democrats are going to somehow save the situation. By doing what, exactly? Neither the Democrats nor the Republicans have made any serious changes in America’s foreign and fiscal policy in decades, and look where that has gotten us. At war with half the world and up to our eyeballs in debt. And, you know, the recession.
One definition of insanity is doing the same thing over and over and expecting a different result. Every USA election since 1984 (at least) has been nothing more than a stage magic show to make people think their voice still counts. No, it doesn’t. And if Obama with his “Bush on steroids” foreign and domestic policy hasn’t made people realize the folly of thinking their vote counts for something, I don’t know what will. Hell, the stolen 1980 election should have woken people out of their torpor, but Americans have been softly screwed into a coma for decades.
Some of them are finally waking up. Occupy Wall Street. Stop the war. Tax the rich. Pass it on.
(The above image is claimed as Fair Use under US copyright law. It’s not being used for profit and is arguably an historically important image. It’s all over the web, but I couldn’t find the copyright information, if someone supplies it I will be glad to post it. I chose it because it’s one of many images that show this movement has wide spread support. Tomorrow, I will expand on how we could conduct our foreign policy and defend America without endless deficit spending or waging war around the world.)
And no, not another 9/11 post. Thanks for all the thoughtful comments on those, there’s a even a few I haven’t responded to. Granted, I don’t get around to responding to every comment, but I try to respond to many or most of them. I get a lot of international comments, not terribly surprising, I’m a rare breed in the USA, an intellectual. I’ve known that since the 80s when we met some German brothers in New Zealand. Later they hitchhiked across the USA and visited us in California. One of their questions was, where are all the intellectuals? I couldn’t say.
I digress, the topic of today’s blog, fracking. Fracking is a method of drilling oil out of low grade oil deposits like oil sands and oil shales, of which the USA has in abundance. During the last gas crunch a few years ago, some wags tossed fracking around as a solution to our oil problems. The Bakken Formation was a favourite example. Experts in the field pointed out that we were decades away from being able to commercially exploit these deposits in a large way. My own considered opinion was that the experts were right.
Well, apparently I was wrong. So were the experts. The technology is here, now. Fracking wells have become commercially viable, and are sprouting up all over the place. It’s entirely possible that in a decade or less the US could produce its own oil, or even become an oil exporting nation again. This is a pretty big change from the peak oil scare a few years back, apparently peak oil has been put off a few more decades. This is all good, right?
No, not necessarily at least. There’s three points that make this an interesting topic, the first of which is, who knows? This is a wonderful example of how things can change very quickly on the world stage. For decades the exploitation of oil shale and oil sand deposits have largely been a pipe dream. They aren’t any more. This is a huge change. And when the equation changes, all sorts of things can fall out. So this is an important development that might change everything, so people should be aware of it.
Secondly, even if fracking really does produce copious amounts of oil and natural gas, the environmental consequences appear to be non-trivial. Fracking is short for hydraulic fracturing, which basically is pumping heated fluids into the ground to fracture rack and allow oil and gas to flow out. Um, what heated fluids? And um, isn’t there groundwater down there? Who knows, and yes. This is why fracking has been outlawed in a few minor jurisdictions. Like Queensland, Quebec, France, and several US states. At best it’s safe to say there are future unknown costs, possibly significant, due to environmental concerns.
Lastly, are there geopolitical implications? Yes, yes there are. One would think it would be a good thing, but anything is possible. My fear is that this will fuel American militarism abroad for a few more decades. And at our current rate of enemy creation, that means we will be at war with the entire world in a few decades. Yeah, that will work out well.
(The above image is of the burning Piper Alpha oil platform. It’s claimed as Fair Use under US copyright law. It’s not being used for profit. It was a disaster that was a classic disaster, a whole string of events led up to it, and it’s a study in disaster prevention to this day. A bunch of guys died. I chose it to illustrate that the exploitation of oil and gas involves costs, sometimes very human ones.)
Former Labor Secretary Robert Reich explains the problems with the economy in less than 2 minutes, 15 seconds. With illustration even, check it out here: The Truth About the Economy in Two Minutes. I highly recommend watching it now, especially as I will be discussing it in this post.
Basically his point can be summed up in far less than two minutes. Since around 1980, the rich in the USA have gotten richer, while the middle class has lost ground. So while the USA has far more wealth than it had in 1980, all the new wealth is concentrated in the hands of the very rich. And they have increasingly used this wealth to buy influence in congress, get their taxes lowered, and play the average American off against each other by placing the blame on poor people, immigrants, liberals, conservatives, whatever.
I don’t see anything wrong with his analysis. It’s a breath of clear air in a dank cave, that’s for sure. The current debt ceiling limit debate is a wonderful example of how political theatre has replaced real debate on the real issues. Almost everything I read about the “debate” has been stuff and nonsense. Neither “side” want to talk about the two biggest contributions to this mess: Our insane military spending and the insanely low taxes on the rich. Until and unless these are addressed, the whole debt situation is just going to get worse and worse.
Both “sides” of the “debate” use different, equally idiotic, talking points. The right loves to blame poor people, immigrants, and sick people for all our nation’s woes. And of course still sticking to the utterly demolished argument that giving the rich tax beaks will magically create jobs. And the left, among much irrelevance, often likes to claim that the debt is no big deal, and that the $400 billion a year in interest on the national debt is trivial. I’m pretty sure $400 billion a year could finance all sorts of things far more useful to the average American than paying bankers ever more money.
Although the point needs to be made, if the government was spending all this money on things that would eventually create wealth, the debt wouldn’t be such a big deal. Things like education, health care, and the nation’s infrastructure. This is how the government used to spend money, and up until the mid-seventies it made the USA the envy of the world. Since then spending on things like education and infrastructure has died the death of a thousand cuts, American’s public education is among the worst in the industrialized world, and the nation’s infrastructure is falling apart. Not to mention a national health system that is a sick joke. France spends about 11% of its GNP on health care, and provides everyone in France with what is widely regarded as the best health care in the world. The USA spends about 16% of its GNP on health care (the most in the world) and has a health care system that is dead last in the industrialized world. Yes, one has to go to second and third world countries to find worse health care than in the USA.
So it doesn’t really matter whether or not they raise the debt ceiling. Until we have a government that puts the needs of the nation and its people ahead of the needs of the hyper-rich … we’re all screwed. Don’t hold your breath.
(The above image is of a huge German tank that the Nazis were working on during World War Two. It would have been essentially invulnerable to other tanks and artillery. Unfortunately it would have been a sitting duck for aircraft … and completely unable to cross rivers. This is the kind of nonsense militaries’ come up with when they have too much money. The current US military being no exception, maybe some blog posts on that will come down the pike.)