When the tinfoil hat brigade says that our economy is a Ponzi pyramid, they're essentially right. After U.S. President Lincoln was assassinated (perhaps in part because he printed the Greenback; the people's currency), the banksters hijacked the system. "So it was a large fraud that was backstopped by a sort of over-fraud." - Ellen Brown. Cue the 20:25 mark to get the 30 seconds prior that provides context for that quotation. Where thinking people of conscience can legitimately differ is considering the matter of which form of social capitalism, or free market socialism, which mashup of an adaptive mixed economy to implement in order to address the resulting unsustainable resource skews, to provide sustainable currency circulation -- not distribution -- via a Basic Income, or similar program that ensures consistent, healthy, transpiration at the capillary level of the economic body. Regardless of what you might have been told by an abusive parent or others, you're smart. Probably very smart, or you likely wouldn't be reading these words. So, instead of spoon feeding you yet another forgettable Top 10, the subject of this post is your assignment: watch the full video. Do the homework. Write your list of the the top 5 Utter Fictions of Money and 10 Solutions that you discover in the comments here. We can do this. We can increment the system, raise it to a more sustainable, adaptive level without throwing out the baby with the bath water. That's the '++' of Capitalism++.
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Posted to capitalismplusplus.blogspot.com
5 Utter Fictions of Money and 10 Solutions
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Posted to capitalismplusplus.blogspot.com
Who's Stupider?
http://feedproxy.google.com/~r/capitalismplusplus/~3/k7e5GtWn7kc/who-stupider.html
“When I was a child, I thought as a child; when I became an adult, I put away childish things.” Transcript Excerpt >>the swaps market, which is where a lot of this leverage lives, has little to no capital requirements and exists in the off exchange with nobody clearing it. blaming greece for these problems is like blaming the subprime borrowers. greece stupid? yeah, you bet, they're real stupid. but they're also the size of dallas, texas. so who's stupider? greece, who was like, we'll take all the money, or the western bank regulators who said it was legal to give the greeks this kind of leverage? >> well, look at the swaps market. the swaps market is anywhere between $300 trillion and $600 trillion (CORRECTED) -- and the whole global economy, you know, its capital value, is not that much. it’s a fraction of that much. which means if rhode island fails, just the swaps on rhode island's debt is enough to take down the entire u.s. banking system and ripple across the pond. and that's exactly the problem. greece is like rhode island failing. >> that's the interconnectedness, and that's why you need not just financial reform in this country, but financial reform that has a global reach. >> absolutely. So, isn't it time to grow up out of our safe little fairy land and act like responsible grown ups? Isn’t it time to stop pretending that this bass-ackwards game of Railroad Tycoon that we call Vintage 19th Century America Industrial Capitalism is any more legit or inalienable than Tidily-winks or Parcheesi? Isn’t it long past time to fold up that tired old board game and get to work creating a scalable, adaptive world game that might be worth our kids inhabiting over the next couple of decades? Now, to be clear, nobody is suggesting some kind of expeditious transition to a global peaceful postscarcity scenario, here, right? I mean, who can afford the risk of a rational, diversified, mixed-economic model working in symbiosis with some kind of utterly pathetic socialist utopian crap? No, we simply MUST return to the Republican comfort of doing things the way we always have, bomb the living hell out of anything and anyone that we don’t understand or can’t utterly dominate and control, right? Or not.
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Posted to capitalismplusplus.blogspot.com
#OccupyWallStreet Official Demands, MLK on #BasicIncome: A Reasoned Response to Accelerating Structural Inequality #99percent
Per @OccupyWallSt, "The only official demands will be off our website and the GAs."
Though if you're more anxious for demands right now, MLK made them 45 years ago.
"We are demanding an emergency program to provide employment for everyone in need of a job, or if a work program is impractical, a guaranteed annual income at levels that sustain life and decent circumstance." - Dr. Martin Luther King Jr., Where Do We Go from Here: Chaos or Community? 1967.
Follow @Livable4All and @BasicIncome. We live in 2011, not 1811. Time to Break the Job Trance. If this is your first visit to this site, you have a LOT of homework ahead. If you are offended by this site, your assignment is to do the math. All of it. We can happily discuss after you've finished all your homework; which will be in about 3-4 years.
It's the Inequality, Stupid #Redux
It's the Inequality, Stupid
Thanks, Mother. Still, a hat tip might have been nice. #JustSayin
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Posted to capitalismplusplus.blogspot.com
Massive wealth redistribution as richest shirk responsibilities
Via TruthOut:One conclusion is clear and obvious: the richest Americans have dramatically lowered their income tax burden since 1945, both absolutely and relative to the tax burdens of the middle income groups and the poor.
Consider two further points based on this graph: first, if the highest income earners today were required to pay the same rate that they paid for many years after 1945, the federal government would need far lower deficits to support the private economy through its current crisis; and second, those tax-the-rich years after 1945 experienced far lower unemployment and far faster economic growth than we have had for years.
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Posted to capitalismplusplus.blogspot.com
The Future of Money & Technology Summit
Finally. The step function to the next increment (the ++) may be nearing readiness for implementation with The Future of Money and Technology Summit, February 28, 2011.
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Posted to capitalismplusplus.blogspot.com
How Social Capitalism Can Hedge Market Capitalism
Daniel Robles, The Ingenesist Project:Today, we have one of the most extraordinary opportunities in human history playing out before our eyes. Social Capitalism is no longer merely a band-aid for an amoral Market Capitalism, it is a new form of Capitalism in it’s own right. In the age of social media, many entrepreneurs no longer allocate land, labor, and financial capital as a primary means of production. Rather, they deploy social capital, creative capital, and intellectual capital to the production of a vast amount of “value” that is stored and exchanged in communities.
A new financial instrument is described which can be capitalized and securitized to form the basis of a fungible social currency to hedge the dollar. The net result could create a condition where Wall Street priorities are subservient to social priorities rather than social priorities being subservient to Wall Street priorities.
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Posted to capitalismplusplus.blogspot.com
Percentage of U.S. Adults at Work is Lower Now, Than Six Months Ago
NPR Commentator David Frum: Old assumptions equal a stagnant economy.
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Posted to capitalismplusplus.blogspot.com
We are Victims of our own Success
What does it actually mean to vote for or against extending unemployment benefits? In the context of seeking sustainable solutions, I'm afraid to say, almost absolutely nothing.
In practice, these stop-gap measures are indeed wasteful, as opponents cry, but only from the perspective of institutional denial of the fact that we are in the process of transitioning to the post Job Trance era.
Less than 65% of Americans (and dropping fast, due to ever accelerating increases in efficiency) current provide at least 100% of required goods and services for the entire economy. That means, 40% of Americans CAN'T BE IN THE WORKFORCE at all ... EVER.
We simply cannot, as bald pragmatic matter, let 40% or more of the population drift further and further into poverty and despair simply because of a deprecated, dysfunctional, nineteenth century industrial delusion about how the world used to work 100 years ago.
We suggest that it is time to open the floor to discussion and debate about economies as Circulatory Systems rather than distribution systems. Only hoarders and oligarchs amplify and defend the narrative of distribution, because it is their unsustainable resource skews that have gradually been the paramount unintended consequence of efficiency-addicted hyper-industrialization, thusly destroying the proper circulation of currency throughout the system as a whole.
In everyday practice, sustainable economies are like the body's circulatory system. We talk about how much currency is in circulation, not in distribution. It's time to open public solutions dialog on a subject that has been under careful study and analysis for decades: universal Basic Income, the most sustainable and adaptive means of maintaining a healthy Circulatory System, one that maintains the health of the capillaries of the economy first and foremost, where the transpiration of the real world economy takes place in everyday lives.
Without the exchange of oxygen, nutrients, and waste at the very fringes of our body's circulatory system, the heart can do no good whatsoever. To date, the measures taken to stimulate the economy have all focused on the wrong problem: shocking the heart to do more work. The moral problems and failures may be at the heart of the system, but the functional failures are at the edges and fringes of the system. Right here, in our everyday lives.
Let's be clear: nobody is demonizing free markets here; rather, we acknowledge that in the west, we are today a victim of our own particular brand of frenetic, neurotic success. As any alcoholic or drug addict who "made it to the top" will tell you, just because that dysfunction seemed to fuel success, doesn't mean that it actually helped. In sad fact, too often the very things that we thought were our best support structures can turn out to be the underlying cause of our greatest miseries.
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Posted to capitalismplusplus.blogspot.com
GOP: Decreasing Homelessness and Starvation Makes Economies Worse
Thankfully, it looks like we can still count on The Atlantic to provide a platform for intellectual honesty about such matters. Special thanks to Daniel Indiviglio for saying it plain:... the official reported unemployment rate should be reflective of labor market turmoil. In that sense, the unemployment rate as currently calculated more likely underestimates the struggle so many Americans face. The broader measure of unemployment was 16.5% for June. There are a lot of Americans who are so discouraged they have temporarily given up on finding work or can't get anything full time. The government doesn't consider them unemployed, even though they certainly are ... A Few Comment Excerpts: Timothy: All I have to say is what is wrong with these people ?! Do they think that what unemployment is giving us to barely survive on is great living to the point that one wouldnt want to look for work ? Are you kidding me ? I am not even getting by ! I have lost 2 homes 2 cars and demolished my credit and everything i have worked for my entire life ! So No I am not overjoyed about being on u/i. People are starving while [politicians] went on break and I find that very sad !
Jessica: The people that they are talking about, that left the work force, are those that have exhausted all their benefits. The real, live, unadjusted unemployment rate is well above 14-15%. They keep adjusting the numbers to see fit... but the people know differently. I think that it is great that all these people think that living on the unemployment benefits, are just living high on the hog.... wow the stupidity continues to amaze me...
KCSam: Now I've heard it all. Unemployment benefits boosting the unemployment rate? Aren't we blaming the victim here?
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Posted to capitalismplusplus.blogspot.com
From the CEO's Blog: Creating High Trust Organizations
By adopting and extending these principles, we simultaneously create high trust institutions and societies.
Whole Foods (WFMI) CEO John Mackey on Creating the High Trust Organization:
"We have the opportunity to create more conscious and higher trust organizations in the 21st century. To do so will require three major changes.
First, the organization must become conscious of its higher purposes. Without consciousness of higher purposes, organizations will not reach their fullest potential because the creative energy within the organization will not be fully expressed. Second, we’ll need our leaders to evolve to higher levels of consciousness and trust. We will not be able to create high trust organizations without more conscious and high trust leaders. Less conscious leaders will tend to hold their organizations back. Third, we will need to evolve the cultures of our organization in ways that create processes, strategies, and structures that encourage higher levels of trust. These will necessarily include the important ideals of teams, empowerment, transparency, authentic communication, fairness, love and care."
WFMI's Shared Fate Policy "We recognize there is a community of interest among all of our stakeholders. There are no entitlements; we share together in our collective fate. To that end we have a salary cap that limits the compensation (wages plus profit incentive bonuses) of any Team Member to nineteen times the average total compensation of all full-time Team Members in the company."
Salary Caps Work. Authenticity and Transparency Work. The neuroeconomics of Neurosociety awakens.
Not only can we chart a more adaptive future beyond the unsustainable resource skews born of fundamentalist 19th century industrial capitalism, we must do so. It is a simply matter of sustainability and survival. And so, we are doing so, as demonstrated by WFMI and other progressive companies like Nika Water, "by donating 100% of our profits to support clean water projects in impoverished countries, NIKA will provide the basic tools and critical assistance to help thousands of families improve their lives in a meaningful way and end the cycle of poverty. Mindful of our duties as stewards of the Earth, NIKA has been certified as CarbonFree® by Carbonfund.org through our investment in carbon offsetting program."
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Posted to capitalismplusplus.blogspot.com
Why do the Poor Protect the Ultra Rich from Taxes?
It's inexplicable.Why would any thinking entity do that? Do you really think that the majority of the people in the top 1%, 2%, 5%, 10% are sitting around thinking:"Gee, I wonder how I could create new jobs for my fellow patriots in the bottom 90%?"Really? Do you really believe that? Because, with every Tea Party you attend, you are voting to keep things exactly like this:Image: UCSCQuick poll: Raise your hand if you think this situation has improved, since 2007. Let's see, I count ... um ... let's look way back to the back for the room ... yeah ... there ... I count exactly ZERO hands.One volley on Digg put it this way:sleepwalker:"Without extended unemployment, I guarantee that a hard worker like yourself would have a job right now. You would move into a smaller place (bunk beds if necessary), work two crappy jobs, do whatever it takes to put food on the table. I know I would to save my family."That's exactly what the pie bakers above want you to believe.seeker:"That's what most people outside the situation believe dude but it's a lot fuzzier when you're in it up to your neck. Fact is, I've said the same thing myself, but have never seen this rate of unemployment nor have I ever been this directly affected."More and more Americans are finding similar wage-slave capitalist repentance.How many more have to be so directly affected -- directly destroyed -- before we wake from the Job Trance, and move into the next evolution of the greatest experiment in democracy that the world has ever seen?
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Posted to capitalismplusplus.blogspot.com
You Don't Count - Is 2010 U.S. Structural Unemployment really 40.6% ?
Incarcerated?
You don't count. 1.5% (Incarceration in the U.S.)
Retired?
You don't count. 14.4% (Beneficiaries / U.S. Adult Population)
Differently Abled?
You don't count. 1.9% (SSI Recipients over 18 / U.S. Adult Population)
Discouraged, disillusioned, disenfranchised, day trading drop out?
You don't count in U3. Lowball total guesstimate of 0.5% in U4.
Working 14 hours a day raising your children?
You don't count. Mothers 2.2%. Fathers 0.001% (2009 Census Data / U.S. Adult Population) Fathers, you REALLY, REALLY don't count. Can it really be that low, or have you been shamed into never, never, ever reporting such a horrendously despicable, worthless status?
Self-employed, scrambling, and screwed?
You don't count. 4.3% (Ag + NonAg / U.S. Adult Population)
The rest of you do count, sort of. You're the currently "official" 17.3% unemployed.
In Sum: 1.5 + 14.4 + 1.9 + 0.5 + 2.2 + (nevermind those lazy dads) + 4.3 + 17.3 = 40.6%
News Flash: At best, that's going to remain steady for the foreseeable future.
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Posted to capitalismplusplus.blogspot.com
Salary Caps Already Work, Upgrade the CFR & Recompile Corporate Culture
http://capitalismplusplus.blogspot.com/2009/08/salary-caps-already-work-upgrade-cfr.html
So, you say that you like Whole Foods Markets? Maybe you're even long a small slice of WFMI in your fully balanced, non-speculative portfolio? Well, in either event, you already believe in and support Salary Caps that Work. Every time you shop, every share you hold, you are already voting for salary caps and Shared Fate:Shared Fate"We recognize there is a community of interest among all of our stakeholders. There are no entitlements; we share together in our collective fate. To that end we have a salary cap that limits the compensation (wages plus profit incentive bonuses) of any Team Member to nineteen times the average total compensation of all full-time Team Members in the company."Yes, I've written on this topic before, but it's a fundamental message that requires periodic reinforcement.The efficacy of Shared Fate in the Corporate Context is just one of many proven, empirical, objective justifications for serious consideration toward amending the U.S Code of Federal Regulations to include Salary Cap Ratios that ensure the benefits of corporate, collective human effort are reasonably circulated throughout the corporate body which created those benefits.In short, it should be permanently illegal to see total compensation multiples of 400x or even 100x between a janitor and and genius trader. Sorry, genius trader, but in empirical existential terms, your 98% water, bloated sack of protoplasm, is of no more intrinsic value than anyone else's. You're made of the same sack of chemicals, knitted and knotted DNA, as anyone else. Your right to pathologically hoard ends at every other human's right to a roof, clothes, and 2,000 measly calories per day.Oh, and in the ever so special case that you're among the Townhall Tantrum Tinfoil Hat brigade, just remember this instruction about any corporate body, from your own sanctified brainwashing:"And the eye cannot say unto the hand, I have no need of thee: nor again the head to the feet, I have no need of you" (ICor1:21).So, do the right thing because of your brainwashing, or do it because it's the only socioeconomically sustainable solution, moving forward; in either case, it appears that the current U.S. Code governing Corporations Improperly Accumulating Surplus is far too reactive in timing, subjective in application, and wasteful in attempting to track down perpetrators and holding corporations accountable for engaging in destructive multi-generational abuses after the fact. It is not only just too damned hard to be Robin Hood all the time; it's actually not necessary if we get the basic rules and principles right, in the first place.Shared Fate is foundational to that objective.
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Posted to google.com
How do u deal with ur parents being super rich?
http://www.hipsterrunoff.com/2009/08/how-do-u-deal-with-ur-parents-being-super-rich.html
Shared by @silverton: Okay. Fair enough. We believe you. Then MAKE YOUR PARENTS PROMOTE THIS http://bit.ly/1MillionStartups by buying media time, billboards, any and every other way within their (ahem) means. You can fly free, golden sparrow; may no gilded cage ever constrain you!
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Took this picture in my parents’ private jet. I am considering taking it down from facebook before I go to college so that I seem like a ‘normal kid.’ Photo via lookbookI have always wanted a normal upbringing, where I would have a healthy mix of ‘earning success’, along with some lil boosts along the way of having ‘nice shit handed to me.’ Unfortunately, as I have grown older, I have had to rely on the connections of my parents along with their financial support more than I would have liked to. It definitely changes the way that authentic people look at me. Most people can’t buy whatever they want and can’t do whatever they want [via financial constraints]. They think that I live in some sort of dream world, and that I’m not appreciative for what has been given to me, but I am actually very appreciative and very humble. I have problems that they can’t even relate to. I am rlly worried that when my parents die, I won’t be able to stay as rich as I am now. I feel like there is something inside of me that wants to make a lot of money so that I can be ‘double rich’ and just live in Manhattan or something. It would also be cool to marry another rich person, then we could pool our incomes and give money to ‘the arts’/'innercity schools.’ It’s hard dealing with social perception and class issues. I wish people could realize that rich ppl are ‘real people’ too, and that we want authentic human connections as much as other ppl. There’s more to people than ‘how much money they make.’ Wish people could see all the colours of the rainbow, instead of just ‘green’ [via metaphor about money]. R u ‘rich’? do u h8 ‘rich alts’ who buy ‘designer shit’? Would u trade ur ‘normal childhood’ for a $100K boost in ur parents’ income? Did ur parents make/lose a lot of money during ur childhood? R u afraid to fly in a private jet because of the increased risk of crash?
do u think that ‘money’ is ‘bullshit’ or ‘what makes the world go round’? Is it hard to form authentic connections with alternative ppl who have had ‘everything handed 2 them’? Is there such thing as an ‘authentic upbringing’? r u a ‘private jet alt’?
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Posted to google.com
Unemployment Rate Could Take Decade to Return to 6% (via feedly)
http://feeds.wsjonline.com/~r/wsj/economics/feed/~3/jE1-MS6FiZ0/
Shared by @silverton
As we've been saying all year boys-n-girls ... Structural Unemployment leads to requirement for Basic Income ... particularly considering that the numbers here are HALF of the U6 Full Unemployment Reality. That means, this research is saying TOTAL unemployment is unlikely to return below 12%!
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An end to the recession is unlikely to bring any improvement in hiring in the U.S., a new paper from the Federal Reserve Bank of Kansas City argues
The research, made available on the bank’s Web site, affirms the widely held view that hiring is unlikely to spike much even if the recession ends, as most believe is imminent, and warns things could be worse than now thought. Persistent levels of high unemployment could also change how the Fed assesses inflation pressures, with important and as yet unsettled implications for monetary policy. Written by Edward Knotek and Stephen Terry, the paper asserts two main forces explain why something akin to a jobless recovery is likely to follow the end of the recession. First, there have been changes in the structure of the economy that make employers more reluctant to take on new hires. And second, recessions begat by banking crises tend to cast longer shadows on recoveries, depressing the pace of job growth. The paper’s authors project what they believe will be the course of joblessness, adjusted for structural changes in the economy and the impact of the banking crisis. That path sees unemployment breaching 10% and staying there through 2011, after which it “slowly drifts” down to 8% by 2014 and 7% by 2016. Even a decade down the road, unemployment could be above 6%, the paper warns. This outlook is considerably worse than what would be expected based on a normal post-war recession, or even the aftermath of a recession like those of recent experience. The paper was published after last Friday’s release of July hiring data. That report showed a moderation in the pace of job losses and an unexpected move down in the unemployment rate. While economists and investors took comfort in the report, there was a sense that the unemployment rate decline was a quirk of falling labor force participation, and that it’s pretty likely that measure will again begin to rise. Economists have for some time been anticipating job losses, even as they see modest growth returning to the economy. What is now a 9.4% unemployment rate is seen as peaking at 9.9% in December, according to The Wall Street Journal’s most recent survey of forecasters. The paper’s authors allow their worst-case scenario may not play out. Their estimates rely in part on data from other countries that may not fit the American experience closely enough. The somewhat unique U.S. system for credit allocation, which relies more heavily on markets over banks, could also skew the data in unexpected ways. The forceful response of government — extraordinary Fed policy actions coupled with huge government stimulus efforts — could also work to create a less ugly outcome. The study warns changed labor market dynamics could also skew the so-called natural rate of unemployment toward a higher level, which in turn means the lower levels of unemployment could create the sort of inflationary forces the Fed would be forced to deal with. But there’s uncertainty on this point. “Estimates of the natural rate are likely to be an important topic for policy makers for the foreseeable future.”[extracted from Unemployment Rate Could Take Decade to Return to 6% via feedly]
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Posted to capitalismplusplus.blogspot.com
When Will The Recovery Begin? Never.
http://capitalismplusplus.blogspot.com/2009/07/when-will-recovery-begin-never.html
Robert Reich's Blog:My prediction, then? Not a V, not a U. But an X. This economy can't get back on track because the track we were on for years -- featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere -- simply cannot be sustained.The X marks a brand new track -- a new economy. What will it look like? Nobody knows. All we know is the current economy can't "recover" because it can't go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin. More on this to come.
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Posted to capitalismplusplus.blogspot.com
Capitalism 1.0's Dirty Little Secret
http://capitalismplusplus.blogspot.com/2009/07/capitalism-10s-dirty-little-secret.html
The Financial Times FT.com writes:Capitalism’s dirty little secret: excessive lending was the only way to maintain the living standards of the vast bulk of the population at a time when wealth was being concentrated in the hands of an elite.The amount by which the elite has benefited is startling, and illustrates the problem with lightly regulated free markets: the rich get much richer while the rest do not get richer at all.For much more detail and salient analysis, please read, repost, retweet, resend, and repeat P2P Foundation's Michel Bauwens's Updating our insights on the deepening meltdown. SOURCE: @stuarthenshall.
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Posted to capitalismplusplus.blogspot.com
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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Posted to capitalismplusplus.blogspot.com
KK on How to Get People to Pay
http://capitalismplusplus.blogspot.com/2009/07/kk-on-how-to-get-people-to-pay.html
Free Market Socialism is called a Mixed Economy, children. It ain't some tinfoil hat-wearing Leninist Dystopian bullshit scifi pipedream. It's finding a way toward a pragmatic postscarcity agalmics.Figuring how to make money in freeconomics is the challenge of our times. While the free is always an option (that is the point of Technology Wants to Be Free and Chris Anderson's new book "Free: The Future of a Radical Price"), free is NOT the only option. Sometimes the best way make money is to actually charge fans for what you produce.Another evolutionary example from KK:Print 200 copies of a book in hard cover. Sell with "free" shipping. Then make the rest of the copies free as a downloadable PDF.
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Posted to capitalismplusplus.blogspot.com
The New Socialism: Sustainable, Global, Collectivist Society
http://capitalismplusplus.blogspot.com/2009/06/new-socialism-sustainable-global.html
Kevin Kelly wisely takes a more measured approach in June's Wired Magazine with The New Socialism: Global Collectivist Society Is Coming Online; in contrast, our mandate here is to lean hard into the foreseeable near to mid term future implications of such present realities.So we say this new mixed economy is not just arriving online, it's evolving everywhere, right now, as a natural, organic process of humans apprehending postscarcity.
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Posted to capitalismplusplus.blogspot.com
Incorporate This!
http://capitalismplusplus.blogspot.com/2009/06/incorporate-this.html
Today, at Salon.Com: The truth is that corporations in the U.S. and other countries have always been quasi-public entities chartered for public purposes. You would never know this from corporate propaganda that treats giant, multinational corporations as though they were simply giant versions of sole proprietorships or partnerships. But history and law alike make it clear that today's large corporations, like automobile manufacturers, are much more like spun-off government agencies than like large-scale lemonade stands.This is a fundamental mythology that comprises the metallurgical alloy most commonly found in the psychological chains of wage slavery: the idea that The Lemonade Stand is a realistic analogy for how an economy works, much less, how it should work.
Drive down any small main street in America and you'll find the vast majority of non-Big-Box enterprises as nothing more than propped-up facades.
For example, there is no way that 5 bookstores can survive in Half Moon Bay, California. We know this to be true, because we explored purchasing one of the most historically well known stores. That whole "market niche" is a complete facade in that 40 mile radius region. Multiply by tens of thousands of similar regions and you get the truth of the post-industrial-capitalism economy.
A brick-n-mortar storefront that sells only Futons? Are you kidding me? Or BBQ Grills?
These are all naive and misconstrued -- even when oh-so-sincerely well meaning -- derivations of The Lemonade Stand; each and every one doomed to the exact same fate, as predictably as the sun will rise tomorrow.
We have to Free Our Minds from the shackles of the Industrial Era psychology that worked for THAT era, but which is hobbling us from moving forward.
As we've expressed and implied numerous times, Corporate Charter Reform is the only viable path forward. Charters can be for specific purpose and embody specific, essential, sustainable values such as compensation ratios, vs hard salary caps.
Compensation Ratios ensure a free, highly competitive, Even Playing Field that also provides an economic breaker circuit to prevent destructive, pathological hoarding. Dividends can never do that. If they could, they would have long before now. ... the power to charter corporations for the purposes we choose and in the forms we prefer will always be a power we wield as a sovereign people. We the people should think about using our power.
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Snark and Anger at Las Magus
http://capitalismplusplus.blogspot.com/2009/05/snark-and-anger-at-las-magus.html
Alchemists have always been a sham and a farce. Financial alchemists -- las magus, to abuse both poetic license and spanglish -- are the bottom of the barrel of the breed.Which leads to our question, have you ever wondered why the tone in this blog, along with growing numbers of others, is increasingly snarky and angry at the very core of free market capitalist convention? Why is Free Market Socialism emerging as the most likely, most credible evolutionary step forward, from here?Obviously, both ideologies hold Free, Fair, Open, and Transparent Markets, central; however, unless you are ready to conceed that a small handful of irrelevant, underemployed, disenfranchised malcontent bloggers and tweeters have actually succeeded in steering the entire public debate toward Free Market Socialism and other Mixed Economic models, you'll have to conceed that plain old boring Empirical Analysis warrants the Snark, Anger, and Activism. In either case, as a defender of the status quo 19th century industrial wage slavery capitalism meme, you lose. You're just increasingly out of touch with present economic reality.And when level heads like Barry Ritholz concur with data-driven sentiment that further supports a secular bull market for Snark and Anger, you become utterly irrelevant. Obsolete.Case in point: while sharing the Back Story to Bailout Nation, Ritholz wrote:The more I researched and wrote, the more it was apparent we were witnessing the greatest heist ever made. By the last section of the book, history’s biggest transfer of wealth — from the taxpayer to the Banksters — was taking place. Trillions were being shifted from the responsible to the reckless, from the prudent to the incompetent. It was infuriating — and you will see as the book progresses my initial academic tone gets replaced with greater snark and anger.Keep in mind that The Reckless and Incompent referenced above are the same people that Mssrs. Kudlow, Forbes, Draper, et al, would likely refer to as the "Best and Brightest of Capitalism" off of whose backs government should dismount. Of course, when government gets off the backs of the criminals, then that same lot blames the government (us, You and Me) for not being on their backs. I used to think apologists for that circular argument were just stupid; now I realized that they are both stupid and malicious. Not stupid because they don't see their own logic as circular; but stupid because they think that We The People don't see right through it. The origins of the deeply rooted maliciousness -- toward themselves and others -- which seeks to further skew such an insanely skewed system simply escapes all rational explaination.Disclaimer: I'm fairly confident that this blog takes exception to several of Mr. Ritholz's specific financial and policy perspectives and I'm equally confident that Mr. Ritholz would not likely give this blog the time of day. However, such speculative dissonance only serves to further strenthen the case for justifiable Snark and Anger directed at Las Magus: those thousands of alchemical scumbags, along with their posses of millions of boot-licking, ass-kissing, Office Space suck-ups that systematically fired the upstanding for "not fitting in with the team" as such teams twisted entire corporate cultures into the image of their own skewed and twisted makers.All I'm suggesting here is that when diverse, data-driven perspectives come to agree, that's usual an area worth noticing. In this case, the Unsustainable Resources Skews that typify our increasingly obsolete 19th century industrial capitalism more than merit the Snark and Anger.So shall we too remain, until the song no longer remains the same.
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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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What Would You Do for House Payments of $50?
http://capitalismplusplus.blogspot.com/2009/05/what-would-you-do-for-house-payments-of.html
Anything! You shout with palpitating anticipation of scoring The Deal of the Millennium.
Oh, wait; actually, we'd do anything but move there.
But, but, but ... if CAPITALISM is omnipotent and MARKETS are omniscient, that place should be overwhelmed with buyers right now. And look, look, look, we have CURVES and GRAPHS that PROVE that Invisible Make Believe Theoretical Real Equilibrium-Claus is just about to slide down the chimney with toys and make-busy fake jobs for all the good little wage slave boys and girls.
We'll be back to the Normal That Caused All This in no time! Just tap your heals three times and join the rest of us in the BOTTOM 90% of Americans who work two jobs for just enough money to pay rent -- just like our Share Cropper great grandparents -- and repeat:
"There's no place called home. There's no place called home. There's no place called home."
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Concerto for Squealing Piggies and Harried Hoarders in “F” Major
http://capitalismplusplus.blogspot.com/2009/05/concerto-for-squealing-piggies-and.html
Big man, pig man, ha ha, charade you are You well heeled big wheel, ha ha, charade you are And when your hand is on your heart … You're nearly a good laugh Almost a joker With your head down in the pig pen Sayin’ "keep on diggy’in" Pig stain on your fat chin What do you hope to find? When you're down in the pig mine You're nearly a laugh You're nearly a laugh But you're really a cry … -- Roger Waters, on Animals We can be confident that we’re making progress when the turrets of the Grand Old Pedantic party are reduced to loading up histrionic emotional pejoratives as their last bastion of defense: “The assumption that the pursuit of self-interest within the rules and conventions of society will also promote the public interest may be succeeded by a mushy collectivist pseudo-altruism, in which jealousy and envy are given a free ride …” Right. It’s jealousy and envy, not empirical observation of Unsustainable Resource Skews which are functionally equivalent to massive blood clots lodged throughout the global economic circulatory system. Note to the non-empirically minded: if you clot up 42% of your vital bodily fluids, into any 1% of your body; or, if you clot up nearly 70% of any resource into 5% of any system; that, my friend, is unsustainable unto immediate herky-jerky death. I don’t know how that makes you feel, emotionally, but presiding physician’s recorded Time of Death is just another cold, analytical statistic. After all, if I might mirror an astonishingly articulate miscarriage of fact by our good friends at FT, “There is a risk that empirically dubious but emotionally attractive interpretations, which enshrine wild west, every man for himself, bar room brawl capitalism; and which call for a rapid return to the failed status quo, could gain ground.” Which is merely to say: First they ignore us, then they laugh at us, then they attack us, then they copy us, then we win. Same as it ever was. “Victims of your own success, unite! You have nothing to lose but your Unsustainable Resource Skews.”
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Debunking the Devil Formerly Known as Godless Socialism
http://capitalismplusplus.blogspot.com/2009/05/debunking-devil-formerly-known-as.html
From an extraordinarily timely NYT article: Such things are easy for an American to ridicule; you don’t have to be a Fox News commentator to sneer at what, in the midst of a global financial crisis, seems like [OMG!] Socialism Gone Wild. But there’s more to it. This was one of the puzzling features of the Netherlands — the Dutch pioneered the multinational corporation and advanced the concept of shares of stock, and last year the country was the third-largest investor in U.S. businesses — and yet it has what I had been led to believe was a vast, socialistic welfare state. How can these [seemingly] polar-opposite value systems coexist? Thank you for the referral, Georges!
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A Red-Baiting April Fool's FAIL for 2009
http://capitalismplusplus.blogspot.com/2009/04/red-baiting-april-fools-fail-for-2009.html
is this forwarded email an April Fool's joke? ;-) i think it must be. there are no links to source data or text of any pending legislation. looks like yet another random smattering of red-baiting euphemisms. granted, i think there are important mistakes speaker pelosi has made, typical of any politician; however, taking the initiative to address the underlying symptoms of unsustainable resource skews in america is not among her failings. surely, specific tactics and methods need rigorous cross checking; however, the strategy of addressing malignancies grown from free radical capitalism is thrust upon all of us, regardless of political persuasion.for those interested, specific comments follow this subject email.> --- On Mon, 3/30/09, Some Random Interwebber wrote:>> From: Some Random Interwebber> Subject: Fwd: Fw: Tax on Retirement Income> To: A Select Group to Probe Responses, Perhaps> Date: Monday, March 30, 2009, 8:49 PM>>> I am scared for our county.>> >> > Windfall Tax on Retirement Income> >> > Adding a tax to your> > retirement is simply another way of saying to the American> > people, you're so darn stupid that we're going to> > keep doing this until we drain every cent from you.> > That's what the Speaker of the House is saying. Read> > below...............> >> > Nancy Pelosi wants a> > Windfall Tax on Retirement Income. In other words tax what> > you have made by investing toward your retirement. This> > woman is a nut case! You aren't going to believe this.> >> > Madam speaker Nancy> > Pelosi wants to put a Windfall Tax on all stock market> > profits (including Retirement fund, 401K and Mutual Funds!> > Alas, it is true - all to help the 12 M illion Illegal> > Immigrants and other unemployed Minorities!> >> > This woman is> > frightening.> > > > She quotes..' We need> > to work toward the goal of equalizing income, (didn't> > Marx say something like this?), in our country and at the> > same time limiting the amount the rich can invest.' (I> > am not rich, are you?)> >> > When asked how these new> > tax dollars would be spent, she replied:> > 'We need to raise the> > standard of living of our poor, unemployed and minorities.> > For example, we have an estimated 12 million illegal> > immigrants in our country who need our help along with> > millions of unemployed minorities. Stock market windfall> > profits taxes could go a long way to guarantee these people> > the standard of living they would like to have as> > 'Americans'.'> > (Read that quote again and> > again and let it sink in.) 'Lower your retirement, give> > it to others who have not worked as you have for it'.> >> > Send it on to your> > friends. I just did!! This lady is out of her mind and she> > is the speaker of the house> >so, let's take a moment to pretend that this is not an April Fool's joke. what if someone were actually 'scared' of the undeniable necessity of correcting the decades of unsustainable hoarding that have become a malignant tumor that is so intimately intertwined within the very sinews of the american economy that literally any attempt to extract the tumor creates an existential risk to the entire body? let's have some fun with that thought experiment, shall we?first, i'm worried that writer says he is scared. unsubstantiated fear is seldom an adaptive emotional response to any crisis; particularly in times of increasing and rapidly accelerating socio-technical changes. i like this old acronym, first heard from a Texas preacher during a 1980's downturn:F.E.A.R. is all too often False Evidence Appearing Real.as we see it today, at the core of a disturbingly normalized culture of unmitigated capitalist corruption are massive, unsustainable resource skews in america. we've used this analogy before, and it's worth repeating. an economy is a circulatory system and just like the body, if 70%+ of the blood (liquid net worth) is pooled in less than 1%, or even 5%, or 10% of the body, that's going to kill the whole body every time. there is no other remedy for failed circulation but healthy circulation. we can pump in plasma while we clear the massive clots, but the clots must be dissolved. our system can not be hooked up to plasma transfusions for the long term; not even the medium term.our emailer uses the name of marx as nearly synonymous with pure evil or utter market destruction. this is a grossly over-simplified and wildly popular misconception.marx was often exactly right about many of the ultimate human outcomes of capitalism, though lenin thoroughly proved that violent revolt was the exact WRONG way to correct capitalism's shortcomings. another popular misconception is that socialism is functionally equivalent to communism. a close corollary assumes that economic models are a zero sum games, each mutually exclusive from the other. naturally, such easy sound bites regularly pepper emotional outcries from financial entertainers such as santelli, cramer, or kudlow precisely because they constitute an EASY button for pushing viewer emotions.unfortunately, repeated pressing of this EASY button is one of the most intellectually dishonest, populist fear-mongering tactics of the day, and these guys fully know better. perhaps oddly enough, cramer seems to come across as just a little less dishonest than kudlow in this regard. cramer seems more of a pragmatist while kudlow reliably portrays the ideologue.while there is still far too much of a strong, negative knee-jerk stigma attached to the following words (probably because so few have studied the actual ideas), Free Market Socialism maintains and even improves upon the best of vibrant Free Markets -- which are uncompromisingly required to create Stuff, Services, and Wealth -- while simultaneously acknowledging that every part of the economic body is vital to that creative process, right down to a seemingly insignificant tiny baby toe.at a bare minimum, america needs some form of universal healthcare and a universal basic income just in order to continue the adaptive evolution of our wonderful american experiment. these two requirements are not ideologically based 'demands' rather, they are functional requirements, essentially equivalent to Henry Ford's 'welfare capitalism' innovation (which many considered communistic): the 8 hour, $5 day.today, we are again hearing similar philosophical opposition to today's required economic adaptations. this, in spite of the empirical historical reality that had Ford's 8 hour, $5/day "socialistic spreading of the wealth" not been abandoned, it may have continued to 'stimulate the economy' at the edges, where all stimulus is undeniably most effective in spurring consumption.meanwhile, here on the cusp of Depression 2.0, we face additional and new complex challenges, on top of those created by the utter moral collapse of wild west renegade capitalism. from VC's and (former) captains of industry, to mentally ill veterans on the street, to the burgeoning 25% structurally unemployed (due to the success of early stage industrial capitalism), to an ever-growing and vibrant demographic of citizen scholars; each and every one of us is more globally interdependent than ever. the era of Shared Fate is indeed upon us. we're all in this together.at the very tip of socioeconomic evolution, dramatic morphological change is happening right before our very eyes. now is the time for the most experienced, tried, and true of america to participate in and shape these changes. obviously, evolutionary change can never be put back into the bottle; we can choose to adapt and thrive, be sidelined, or become ... as our previous president might have said, "extinctified."
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Basic Income a right: Essential for economic recovery
http://capitalismplusplus.blogspot.com/2009/03/basic-income-right-essential-for.html
SooToday.com Staff. Sunday, March 01, 2009
NEWS RELEASE TONY MARTIN, MP, Sault Ste Marie
Basic income a right, essential for economic recovery
Martin speaks at international conference in New York
NEW YORK - (March 1) - A basic income guarantee for people living in poverty honors human dignity and will help countries recover from the recession, Sault MP Tony Martin told the closing plenary of an international conference here today.
“We are facing a challenge today different in nature and depth than anything any of us have experienced before,” Martin told delegates attending the 8th Congress of the U.S. Basic Income Guarantee Network.
“It will require phenomenal common effort to get us through it in a way that leaves no one behind. We need to be able to influence the decision makers (politicians). Large numbers of people need to be sending the same message -- poverty is not acceptable for anybody.
“We need to be speaking to people of kindred spirit in faith groups, in labour organizations and other citizen groups rooted in a quest for fairness and justice. The economic system is failing, people are being affected. We have an unprecedented opportunity to affect positive change. It is in our collective self interest to do so. It is not only a moral imperative, it is necessary for economic recovery and redistributive justice. A basic income is part of the answer. Those who had privilege will fight this and are well funded and organized.”
While here, Martin met with Conservative Senator Hugh Segal, another conference presenter and long-time advocate for a guaranteed income, on plans to move the basic income initiative forward in Parliament.
Martin believes any economic stimulus package should include income security investments and critical social infrastructure for communities.
"We have a duty as a socieity and government to offer equal opportunity for everyone, to ensure people have enough money to pay for the basic necessities of life, including food, clothing, shelter, heat."
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We are All Socialists Now
http://capitalismplusplus.blogspot.com/2009/02/we-are-all-socialists-now.html
Finally, We Are All Socialists Now.
In many ways our economy already resembles a European one. As boomers age and spending grows, we will become even more French.
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What if 25% and Growing Real U.S. Unemployment is Equilibrium?
http://capitalismplusplus.blogspot.com/2009/02/what-if-25-and-growing-real-us.html
For starters, it would be called Structural Unemployment; and there is mounting, compelling evidence that this is precisely where we're headed. Not as punishment -- unless we are stupid and inflexible about it -- but as the logical outcome of the overwhelming success of industrialization. Nevertheless, it's also observed in nature that every metamorphosis is an excruciating process; an epiphany of existential crisis.It’s hard to exaggerate how much economic trouble we’re in. The crisis began with housing, but the implosion of the Bush-era housing bubble has set economic dominoes falling not just in the United States, but around the world. -- Paul Krugman, New York Times, Feb 5, 2009The BLS U.S. UNEMPLOYMENT PICTURE Right NowData extracted on: February 6, 2009 (8:47:17 PM)SOURCE:Bureau of Labor Statistics Table A-12. Alternative measures of labor underutilization (Percent) Series Id:LNS13327709 Seasonal AdjustedSeries title: (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workersLabor force status: Aggregated totals unemployedType of data:PercentAge:16 years and overPercent/rates: Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attachedJust last month, January 2009, Seeking Alpha explained:As you can see here we have an increase of 1.3% to 13.5% unemployment in December. Many people including myself think this is a better more accurate number for understanding the current unemployment situation.It is also interesting to note that a loss of 1.3% of jobs from a labor force of about 254 million with slightly more then a 65% participation rate equals job losses of more then 1 million jobs from November to December. Almost double that which was reported.Interesting also is that even though the scales are somewhat different (U6 at 6% unemployment is good) the U6 numbers represent a 10% increase in the unemployment rate vs just a 5.8% increase in the U3 from Nov to Dec.Something to think about and keep an eye on going forward. Prior to the addition of today's (February 6, 2009) 600,000 lost jobs, The Market Oracle, UK explained, "if you include the people that the government doesn't even count – such as unemployed farm workers, the idle self-employed, and workers in private homes – the unemployment rate approaches an astonishing 18% (top line)." "In other words, unemployment has insidiously spread to almost one-fifth of the U.S. work force, a number much larger than the single-digit figure commonly bandied about in the press."So if we're already at 18% to 20% real unemployment, and Davos is even partially correct that things are definitely going to get worse before they get better, how unlikely is 25% unemployment, really?Not all that unlikely, at all. Friends, in case you haven't yet noticed, this is called a Disruptive Inflection Point. It's time to insist that our leaders shift gears into the Post-Industrial, Post-Information, Post-Scarcity policy mode.I understand the paradox, it's easy to think that downturns must be because we don't have enough stuff. However, terabyte hard drives are $100. Brand new state-of-the-art netbooks with 1GB RAM and 8GB solid state drives (no moving parts) are $250. We have more than enough information age stuff. In fact, it's a crisis of context amidst runaway accelerating change, a crisis of abundance, and a crisis of resource skews; not a crisis of lack. Perhaps Toffler was simply a little ahead of schedule; perhaps his future shock has finally arrived.What we do know is that Barry Ritholtz has: "frequently exhorted people to pay attention to N.I.L.F. — those people Not in Labor Force." And:Over the past few years, dishonest politicos failed to mention that Unemployment had gone down primarily due to people leaving the labor pool — not due to a surge of new job creation.U.S. Labor Force Participation RateWe also know that as far back as June 2008, Ritholtz pleaded, to no avail, of course:Here is a modest proposal for all of the poor scribes (like me) who slog through the monthly NFP report: For the sake of more accurately describing the conditions in the labor market, let's begin reporting two measures of Unemployment: U3 as well as U6. Its been pretty obvious for sometime that the Financial Media are doing a disservice to their readers by only reporting U3, given how dramatically it understates Unemployment. Indeed, consumer sentiment reports are at deep negative levels that only occur when Unemployment is much than what U3 has been saying. It is painfully obvious that U3 does not paint an accurate view of the Employment situation.Its way past time to fix that. Here's the experiment I propose: Let's start reporting both, with appropriate descriptions of each. Report U3, add U6, provide monthly and year over year changes. Let the reader see the full picture, via BLS data.Finally, raise your hand if you think U6 is really, truly accurate. What, no hands? How many think the number is overstated? Really? Nobody? How about understated? That's what I thought. But by how much 10%? 50%? Can we really continue to sit around twiddling our thumbs and placing false hope in this "stimulus" that will essentially only bail out essential infrastructure companies? I think not.So what do we do to adjust to this Disruptive Inflection Point? We legislate a U.S. Basic Income immediately and make it a model for The World.The Basic Income solution to Structural Unemployment is nothing new, many of the world's leading intellectuals have seen this coming for a very long time:One of the explanations behind structural unemployment came from Austrian and French social philosopher, André Gorz. He argues that it could be permanent in modern society. He therefore argues that a basic income could be a solution, and as he explain: "The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...Discussion thread on Friendfeed.
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Davos 2009: Rebooting the Global Economy
http://capitalismplusplus.blogspot.com/2009/02/davos-2009-rebooting-global-economy.html
Why isn't this quotation below (at 35:45 in this archive video) in the sorry excuse for an abridged transcript of this event? Where are the comprehensive transcripts?"We have given $150B to AIG -- one company -- and most of that money has disappeared; now that's one company. We would have put social security on a sound financial basis for a hundred years or more with the money we've been spending on the banks. Giving all the old age people in America security for the next one hundred years versus bailing out a few banks. That's the "bad bank" idea. If you go ahead with that, I think it raises real issues about social values." - Joseph E. StiglitzThis is the same guy that wrote the following back on December 11, 2007. I'm open to hearing explanations as to why the following comments apparently are not readily archived on any U.S. financial sites, but rather most easily found in the Daily Times of Pakistan.
Global economy is exposed to America’s houses of cards By Joseph E. Stiglitz
There are times when being proven right brings no pleasure. For several years I have argued that a housing bubble that had replaced the stock market bubble of the 1990s was supporting America’s economy. But no bubble can expand forever. With middle-class incomes in the United States stagnating, Americans could not afford ever more expensive homes.
Economists, as opposed to those who make their living gambling on stocks, make no claim to being able to predict when the day of reckoning will come, much less identifying the event that will bring down the house of cards. But the patterns are systematic, with consequences that unfold gradually, and painfully, over time.
There is a macro-story and a micro-story here. The macro-story is simple, but dramatic. Some, observing the crash of the sub-prime mortgage market, say, “Don’t worry, it is only a problem in the real estate sector.” But this overlooks the key role that the housing sector has played in the US economy, with direct investment in real estate and money taken out of houses through refinancing mortgages accounting for two-thirds to three-quarters of growth over the last six years.
Booming home prices gave Americans the confidence, and the financial wherewithal, to spend more than their income. America’s household savings rate was at levels not seen since the Depression, either negative or zero. With higher interest rates depressing housing prices, the game is over. As America moves to, say, a 4 percent savings rate (still small by normal standards), aggregate demand will weaken, and with it, the economy.
The micro-story is more dramatic. Record-low interest rates in 2001, 2002 and 2003 did not lead Americans to invest more - there was already excess capacity. Instead, easy money stimulated the economy by inducing households to refinance their mortgages, and to spend some of their capital.
It is one thing to borrow to make an investment, which strengthens balance sheets; it is another thing to borrow to finance a vacation or a consumption binge. But this is what Alan Greenspan encouraged Americans to do. When normal mortgages did not prime the pump enough, he encouraged them to take out variable-rate mortgages - at a time when interest rates had nowhere to go but up.
Predatory lenders went further, offering negative amortization loans, so the amount owed went up year after year. Now reality has hit: Newspapers report cases of borrowers whose mortgage payments exceed their entire income.
Globalisation implies that America’s mortgage problem has worldwide repercussions. America managed to pass off bad mortgages worth hundreds of billions of dollars to investors (including banks) around the world. They buried the bad mortgages in complicated instruments, buried them so deep that no one knew exactly how badly they were impaired, and no one could calculate how to re-price them quickly. In the face of such uncertainty, markets froze.
Those in financial markets who believe in free markets have temporarily abandoned their faith. While the US Treasury and the International Monetary Fund warned East Asian countries facing financial crises 10 years ago against the risks of bailouts and told them not to raise their interest rates, the US ignored its own lectures about moral hazard effects, bought up billions in mortgages, and lowered interest rates.
But lower short-term interest rates have led to higher medium-term rates, which are more relevant for the mortgage market. It may make sense for central banks (or Fannie Mae, America’s major government-sponsored mortgage company) to buy mortgage-backed securities in order to help provide market liquidity. But those from whom they buy them should provide a guarantee, so the public does not have to pay the price for their bad investment decisions. Equity owners in banks should not get a free ride.
It is the victims of predatory lenders who need government help. With mortgages amounting to 95 percent or more of the value of the house, debt restructuring will not be easy. What is required is to give individuals with excessive indebtedness an expedited way to a fresh start: for example, a special bankruptcy provision allowing them to recover, say, 75 percent of the equity they originally put into the house, with the lenders bearing the cost. There are many lessons for America, and the rest of the world; but among them is the need for greater financial sector regulation, especially better protection against predatory lending, and more transparency.
Joseph Stiglitz is a Nobel laureate in economics.
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It's Time To Nationalize Everything
http://capitalismplusplus.blogspot.com/2009/01/its-time-to-nationalize-everything.html
From the lucid keyboard of CNBC's Cliff Mason:Now some people may object that governments don't do a good job running private companies. In general, I'm sure that's true, but we could hardly do a worse job than private sector's already done. If the state is going to bail out these companies, the state should be the entity that reaps the rewards, not existing shareholders. We gave free enterprise a shot, now it's time try a different solution.
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