"The bottom line is that much like in other areas of our lives, we are not perfect, we are not rational, and there are multiple hidden forces that shape our abilities and decisions. We can continue to assume that we are perfect, but this will only set ourselves up for more fantastic failures. If instead we were to realize where we fall short, where we fail, and try to do something about it, our future could indeed be brighter -– and not just in the domain of banking and salaries."SOURCE: TED Blog: Dan Ariely asks, What is the right amount to pay bankers?via feedly.com
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What is the right amount to pay bankers?
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Where Classical Economics (hence, blind Capitalism) FAILED: We're All Predictibly Irrational
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Productivity Dividends Permanently Denied
Don't like it? Move! That's the legacy of your 19th century industrial era capitalism. The U.S. is not and has not been the Supreme Society for some time now. Today, the Emperor is finally realizing that he's wearing no clothes. Take vacation time as just one example of resolutely denial-bound and unevolved U.S. culture; and remember, if you get sick, be sure to enjoy your vacation, puking your guts out, because that sick time is taken out of your paid time off (PTO), too. We don't even call it "vacation" any more because you're not entitled to any, whatsoever.Productivity Dividends: DENIED.If you're in the bottom 90% ... and, um, 90% of us ARE, we are to be grateful for our ever dwindling little pot of PTO. Vacation? Don't make me laugh. You want to become like those LAZY FRENCH people, I suppose. Yep, they look pretty LAZY to me.For centuries we've been taught in Economics 101 that technology improves efficiencies which yield ever increasing productivity and productivity dividends. Labor saving after labor saving devices and methods have accrued for hundreds of years, yet, there is no saving of labor's fate. Ever.We're not talking about people getting something for nothing, for heaven knows the permanent heirs of the American aristocracy will have none of that, we're talking about the people who created the dividends, sharing proportionately in the dividends.No labor saving productivity dividend is ever declared and distributed to shareholders: US. Such dividends are only ever hoarded and squandered by the top 5%, 2%, 1%. The smaller the percentage, the more pathological the hoarding. It is, ipso facto, clinically pathological, even functionally sociopathic when one measures the dire fate of so many as the direct consequence of the behavior of so few. A sociopath is a person, a psychopathic personality, whose behavior is antisocial and who lacks a sense of moral responsibility or social conscience.This will sound all too familiar to today's prevalent American 19th Century Industrial Capitalist Culture, which obliviously shrugs and says, "so?"Sociopathological cultures kill through the Invisible Hand of a twisted and brutal wage slave tyrant. Today the brutality is reaching all new extremes, but because it is the Invisible Hand of the almighty market at work, there is no one to blame when high school children in Palo Alto are killing themselves in packs, jumping in front of trains, as the pressures of conformity to this pathological culture of hoarding and false scarcity mount to all time highs. What more evidence do you need, America?You are literally killing your best and brightest youth. They know that they can't exist in such a soulless society. So they choose their only out. If they could move, they probably would; but their tragically heartbroken parents have become analogies for you, America. You probably truly do love your children. You probably have done your best. However, the Entire Environment in which you've been operating is Terminally Toxic.If the entire culture is not changed, nothing you do or could have done, will ever save yourselves or your children. I share the devastation of your loss.For those not so compassionate, no, the infinite iPods and PSP's were not enough to "satisfy the little spoiled brats" if that's the unconscionably cruel path of reasoning you'd like to take in response to this terrible situation; and I know you are out there, I've heard your conversations. You are poor and disenfranchised and bitter; told you are in the "middle class" even as you are numbered among the bottom 80% of Americans who scramble and claw to share just 8% of the economic pie in this country.Yet, those children are human beings, random victims of the fate of their births just, as are you. No one deserve such a fate. So while I identify with the bitterness of the bottom 80%, I do not condone twisted and cruel interpretations of such unthinkable human tragedy.There is, however, an abiding and ascendant message in the growing numbers of these situations: if we don't find a path to sustainable postscarcity, all the manufactured crap in the world will never save us. All of the hoarded and accrued wealth will never save us.We are literally crushing ourselves and our children under the weight of our own avaricious abundance.With nothing but the most crushing pain for those families in my own heart of hearts, I must honor the sanctity of those magnificent lives by stating that:Those trains are the very embodiment of the culture that created them, a nineteenth century culture that we continue to cling to with all the fervent faith of the most sincere Stockholm Syndrome devotee.SOURCE: MarketWatch.Perhaps this is just one empirical consequence of your pathological inbred hoarding of your mythological Productivity Dividend, America. Yet, when canonical publications like MarketWatch write that "Vacation-day allotment varies widely by country" and that "some workers enjoy eight weeks off per year; U.S. near bottom of list" the message in the title tag text is:"Want more time off? Move ..."That derisive, arrogant, corrosive credo is a hallmark of a McCarthy era religious fervor that still has it's grimy, oil-and-blood stained hands firmly on the levers of U.S. domestic policy and corporate culture. Those same hands are presently strangling the last gasps of life out of health care reform while whispering silently, the last words you'll ever hear:"If you don't like it, move."This is "MARE-ick-uh" mister, we don't compare notes with other nations that might have one hundred times the broadband at one tenth the price; we don't compare notes with other cultures that have found sustainable work-life balances; we don't compare notes with NOBODY.Don't like it? Move!And that's precisely what America's best and brightest have been doing and continue to do.
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How Wall Street Makes Billions Kiting YOUR Cash
http://capitalismplusplus.blogspot.com/2009/10/how-wall-street-makes-billions-kiting.html
Philip Greenspun's Weblog:So the money is just being shuffled from one Federal bank account to another, with each Wall Street bank skimming off $1 billion per month for itself? “Pretty much.”
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Modern Work is Mostly a Lie
http://capitalismplusplus.blogspot.com/2009/07/modern-work-is-mostly-lie.html
Modern work is mostly a lie.Especially in the so-called knowledge, information, or entertainment sectors, work has all too often become little more than an arbitrary hierarchy of stupidity fees, ignorance fines, influence peddling, and pathetic popularity plays. It's increasingly an unjustifiable waste of time to set up such pointless and counterproductive relationships in the first place. It's no wonder that increasingly, many of the most intelligent, creative, and educated simply opt out.Forget value judgments about whether this is Good, Bad, Indifferent, a vast Right-wing or Left-wing conspiracy; the fact that more and more modern work is mostly a lie -- tens of millions of make-work duck-n-shuffle experts at looking busy -- is simply a primary symptom of the overwhelming success of 18th and 19th century industrial era capitalism and the attendant cultural anomie typical of the evolution toward postscarcity.Take a typical knowledge work case: a consultant just upgraded six Wordpress blogs to version 2.8.1 in a total of about 20 seconds, thanks to automation, and billed clients for six hours. Why? Because the client has no idea of the level of automation available since the relationship was forged, years ago. The last the client knew, these updates could be "very risky" -- OMG! the website could go down! -- and "take a long time" to make sure hell doesn't accidentally freeze over. Multiply such norms by some X-hundred million similar seemingly insignificantly tiny transactions per day. Each time we engage in these behaviors, believing we are the only ones doing it -- okay, maybe a few others do the same, we exponentially understate to ourselves -- we simply fail to conceive of the aggregate effect.This is standard operating procedure for so-called service providers everywhere: find a client who doesn't know how easy you've made your work, convince them it's even more complicated than they imagined, and start the meter running. We've all seen this a thousand times. It's defended as monetizing the marginal value of efficiency. The thinking goes, "Hey, if the client needs something done and it's of X value to them, who cares HOW we get it done, right? If we're really efficient, that's our paycheck."Well, yeah, sort of. On the other hand, that's a complete make-work sham, isn't it? This is why so much of modern work is mostly a lie, perpetrated by small cliques who myopically believe they are the only ones getting away with this game, who are collectively addicted to and fearful of any change from the status quo, and who implicitly agree to cover for one another's fiddling about in cubicles all in the name of keeping the job trance intact. The job trance holds that a Calvinist industrial era hourly wage slave J.O.B. is the only conceivable moral Justification Of Being. This is not an indictment of the hapless humans enshrouded in this stultifying, anachronistic systemic miasma; rather, this is an indictment of a systemic group think that has failed to declare and deploy the productivity dividends born of the past two centuries of accelerating progress. This is to expose the obsolete, old world Centralized Capitalist organizing principle that is failing to serve us all as humans, as a community, as a nation, moving forward.In the entertainment industry case, everyone knows that the job or the part seldom goes to the best qualified or most talented applicant or audition. That's not An Efficient Market Objectively Allocating Resources, that's a popularity pecking order that is arbitrarily -- and often capriciously -- allocating resources that reinforce the dominant Central Capitalist Party Monarchy. Those who think that they see that game and can one day become king themselves, fully buy in and defend the monarchy, even though it's strictly against their own best self interest. Modern work is mostly a lie. That's why more and more of the brightest and best qualified people opt out. It's one of several off-balance-sheet explanations of why U6 total unemployment is already above 16.5% and empirically indicative of the growing Structural Unemployment that has steadily, relentlessly overtaken us in recent decades.Still need convincing? Maybe conjuring the Bloomberg brand will reopen a singed synapse or two:“We are going to have a huge pool of unemployed, second only to the Great Depression,” said Allen Sinai, chief economist at Decision Economics in New York. “It will be a big public-policy problem.”We're clueless about how to handle surpluses -- the most dangerous of which is cognitive surplus -- and the Old World Centralized Capitalist Party Bosses began embezzling our exponential productivity dividends long ago by providing myriad creative ways to soak up the first hints of the sociologically volatile stuff.But change kept accelerating faster and faster and faster and faster. Faster than ever dared imaginable by my very own great grandparent share croppers.So Industrial Era capitalism worked. It succeeded. It blew the doors off of history. It will continue to work and succeed for other civilizations that need to make that phase state transition from agrarian to industrialized. But it's utterly obsolete for America and today it is our existential obligation to define what comes next -- Postscarcity Agalmics. If we fail, then one industrial locomotive after another will simply run off the end of the same iron rails of fear and inertia we've run off.As a recent New Scientist article put itSo will we cling to scarcity just so that we can keep capitalism? Or will capitalism have to evolve into some new kind of digital economics? The question underlines many things - from music piracy to the woes of the newspaper industry to Google's efforts to scan all the books in the world. (via @agalmacist)
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Maryland's Millionaire Tax Dodgers
http://capitalismplusplus.blogspot.com/2009/05/marylands-millionaire-tax-dodgers.html
And you're BOASTING about it? Really? After being asked to pay their fair share:One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing.If the underlying contention of such notions is accurate, the writer is suggesting that because the wealthiest were required to pay their fair share, THEY DODGED THEIR LEGAL OBLIGATION. And this tax dodging is somehow both predictable and laudable?!Somebody needs to go look up the term Fail Whale as pop cultural indictment of all things moronic and laughable.
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Arbitrary and Emotional - Hallmarks of Capitalism
http://capitalismplusplus.blogspot.com/2009/05/arbitrary-and-emotional-hallmarks-of.html
Pricing Deals with charts, graphs, and the absurd voodoo of the 52 Week High. The Wall Street Journal:In other words, boards and bankers are just like the rest of us. They set aside their rational mind in favor of those anchors -- arbitrary and emotional points of concentration. You don't need Goldman Sachs to do this math. Dr. Phil will probably do the trick. Given, of course, the perfect symmetric information of economic mythology 101. So efficient. So impartial. Such an unbiased meritocracy. No room for foundational, existential restructuring here.
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Keep Trying or Drop Out? Case of the Brown v. Leary Economy
http://capitalismplusplus.blogspot.com/2009/05/keep-trying-or-drop-out-case-of-brown-v.html
Excellent post, David, although you are probably constrained by your bosses to toe the U-3 estimate line, only alluding to U-6 realities, while not giving the real U-6 forecasts which will likely be about double that 9.5% ... so call it 20% ... and anyone selling that number is essentially reduced to praying that it's a tad overstated; even though growing numbers of forecasts suggest otherwise.Also, a quick response to the idea of "skills atrophy." I'd suggest that only happens at the bottom of the barrel, not for the cream at the top.More commonly, only Charlie Brown keeps trying to kick the ball after more than two or three good yanks. The smart people all say, "no thanks" when the game is rigged against them and take their generally OVERACHIEVING skills to the sidelines and even out of the stadium. This isn't about "re-educating" Maynard James Keenan's "tidal waves of dumbfounded dipshits." Rather, one of the real tragedies of perpetuating Unsustainable Resource Skews is that WE LOSE THE BEST AND BRIGHTEST because they understand exactly what it means for them when 70% of the available net wealth is permanently hoarded by 5% of the population.The math of that situation simply don't work out, do it?
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Back To Normal
http://capitalismplusplus.blogspot.com/2009/05/back-to-normal.html
So you just want everything to go back to normal? Really?Click here to view if the Seesmic Embed keeps flaking out on you.Mad props to the one and only KDFA!
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Unemployment Skyrockets, So Do Stocks
http://capitalismplusplus.blogspot.com/2009/03/unemployment-skyrockets-so-do-stocks.html
Are we getting the message of the system they'd love to rebuild YET AGAIN? Are we all going to play the victim and fall for it all YET AGAIN? Probably. So sad.
03/07 Briefing.com Estimate 640K Consensus Estimate 644K Actual 654K
Actual Prior 645K Revised up from under reported 639K
And keep in mind, this is only the Freshly Discarded Humans (U3), which is about Half of the actual Total Discarded Humans (U6).
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It's Only a Greater Threat Than Terrorism
http://capitalismplusplus.blogspot.com/2009/02/it-only-greater-threat-than-terrorism.html
“Nearly everybody has been caught by surprise at the speed in which unemployment is increasing, and are groping for a response,” said Nicolas Véron, a fellow at Bruegel, a research center in Brussels that focuses on Europe’s role in the global economy.Modestly, it seems, "nearly everybody" hasn't included us. So far.Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.Unemployment in Britain is expected to rise to 9.5 percent by the middle of 2010, from 6.3 percent now, according to Peter Dixon, an economist with Commerzbank in London. Germany’s jobless rate could rise to 10.5 percent from 7.8 percent, he added.Keep in mind, all these numbers are often and regularly intentionally understated by around half (give or takebecause they omit the previously and long-term unemployed. Compare U3 to U6 and note correlations so helpful to understating the case with uncanny symmetry.On the other hand, some genius at JP Morgan is apparently helping to clarify the picture by exponential overstatement of the bubble collapse. SOURCES: New York Times, Nelson D. Schwartz; The Big Picture, Barry Ritholtz.
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It's Only a Greater Threat Than Terrorism
http://capitalismplusplus.blogspot.com/2009/02/it-only-greater-threat-than-terrorism.html
“Nearly everybody has been caught by surprise at the speed in which unemployment is increasing, and are groping for a response,” said Nicolas Véron, a fellow at Bruegel, a research center in Brussels that focuses on Europe’s role in the global economy.Modestly, it seems, "nearly everybody" hasn't included us. So far.Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.Unemployment in Britain is expected to rise to 9.5 percent by the middle of 2010, from 6.3 percent now, according to Peter Dixon, an economist with Commerzbank in London. Germany’s jobless rate could rise to 10.5 percent from 7.8 percent, he added.Keep in mind, all these numbers are often and regularly intentionally understated by around half (give or takebecause they omit the previously and long-term unemployed. Compare U3 to U6 and note correlations so helpful to understating the case with uncanny symmetry.On the other hand, some genius at JP Morgan is apparently helping to clarify the picture by exponential overstatement of the bubble collapse. SOURCES: New York Times, Nelson D. Schwartz; The Big Picture, Barry Ritholtz.
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The (Situational; Optional; Variable) Values Behind Market Capitalism
http://capitalismplusplus.blogspot.com/2009/01/situational-optional-variable-values.html
This is the World Economic Forum presentation most likely to reveal that fact that genuine, effective change will NOT be coming to any real life situation near you. We'll see, at 10:30 CET tomorrow. I'm hopeful, but not at all enthusiastic, considering this lineup of usual suspect:Tony Blair, Stephen Green, Indra Nooyi, Shimon Peres, James J. Schiro, Jim Wallis with Maria RamosThe high hopes are that people are surely not so gullible to swallow this old tired line yet again; the low expectations are based in a cursory understanding of Introduction to Behavioral Economics.
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Free Will: Predictably Irrational
http://capitalismplusplus.blogspot.com/2009/01/free-will-predictably-irrational.html
Industrial Era capitalism is inundated with irrational reliance upon irrational conventions and assumptions in the context of a post-information society.For instance, it's incontrovertibly obvious that NOBODY possesses anything even remotely resembling "Full Information," yet conventional economic theory is utterly dependent upon hosts of such irrational presumptions.In real life economic behavior, Ariely explains, "You rely on our own past behavior, to dictate your next behavior, without clearly thinking about it, until it just becomes a habit."When we do this over and over again with an entire economic system founded upon absurd and irrational assumptions such as Full Information and an achievable equilibrium, we are clearly setting ourselves up to FAIL time and time again.Dan Ariely quotations:"There's a level of compensation that actually undermines and replaces the original motivation; and that I think is a very very dangerous place.""One of the ways [companies capture the heart and soul of employees] is to obfuscate payment, by paying people monthly. Cash eliminates the long term bond between people.""You simply cannot contract motivation.""When people talk about markets, it's like voodoo belief: The Markets will fix things."Ariely says that when he meets entrepreneurs, they generally want to Improve The World and big cash payoffs from some other source to do something that they don't care about generally have little or no effect. My own observations and experience over the past 35 years completely validates this perspective."I actually believe that very little of innovation, creativity, entrepreneurial activity is happening because of economic incentives; I think we have these incredible drives for meaning and help and it's not about [cash] incentives."
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