Let's not pretend anymore. The USA is not a democratic republic. Corporate authoritarianism is our government and religion. Bill Gates is worshipped as a god of philanthropy. He should be worshipped as a ruthless monopolist.
Corporations are inherently hierachical. They are authoritarian structures within a supposedly democratic republic. When happens when an authoritarian structure runs a democratic republic? The democratic republic only exists to hide the authoritarian structure.
The structure uses the tropes of a DR to cloak itself in the skin of equal opportunity.
Where do the American people fit in this scheme?
Thursday, November 12, 2009
Take 20+% Pay Cut or Never Be Employed Again (New Economic Theory)
I subscribe to the NY Times and the Wall Street Journal. Today I didn’t get my papers. So I called customer service to request a replacement and I spoke to a very nice girl named Rica. She works in the Phillipines.
The average Phillipine call center worker makes a daily wage of $9 (that's $2250 annually) with some companies forking over $14 a day. This is from a corporate call center website. It's not trying to expose wrongdoing. It's offering instructional guidelines for any company seeking to outsource their customer service.
Yesterday the NYT ran a story under the headline American Wages Out of Balance in their Breakingviews.com column that starts:
The high productivity that’s raising the boats in the stock market is due to massive layoffs. As to what caused that unemployment, it’s debatable that it was overpaid American workers. Except perhaps in the financial sector.
Goldman Sachs is going to pay out the largest bonus pool in its 140 year existence and the rest of the few financial monoliths will do the same. In other words, the financial sector which now has less competition than ever and free credit lines from the government will be rewarded handsomely for creating and leveraging phony assets, spreading them around the globe and getting bailed out by the American taxpayer. Are they worth the money? And how much more will they make in the future?
The implied threat here is that unless the American labor force takes an average pay cut of 20%, we will achieve levels of unemployment similar to the first Depression. I got news for you, Edward Hadas, Martin Hutchinson and Antony Currie (the writers of this analysis, which I’m sure will be adopted by many firms sitting on mounds of cash and still not hiring), we’re already there.
The average Phillipine call center worker makes a daily wage of $9 (that's $2250 annually) with some companies forking over $14 a day. This is from a corporate call center website. It's not trying to expose wrongdoing. It's offering instructional guidelines for any company seeking to outsource their customer service.
Yesterday the NYT ran a story under the headline American Wages Out of Balance in their Breakingviews.com column that starts:
“American workers are overpaid, relative to equally productive employees elsewhere doing the same work. If the global economy is to get into balance, that gap must close.”
The high productivity that’s raising the boats in the stock market is due to massive layoffs. As to what caused that unemployment, it’s debatable that it was overpaid American workers. Except perhaps in the financial sector.
Goldman Sachs is going to pay out the largest bonus pool in its 140 year existence and the rest of the few financial monoliths will do the same. In other words, the financial sector which now has less competition than ever and free credit lines from the government will be rewarded handsomely for creating and leveraging phony assets, spreading them around the globe and getting bailed out by the American taxpayer. Are they worth the money? And how much more will they make in the future?
David Williams, an investment banking analyst at Fox Pitt Kelton, said: "This year is shaping up to be the best year ever for investment banks, or at least those that have emerged relatively unscathed from the credit crisis.
"These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business."
Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.
The implied threat here is that unless the American labor force takes an average pay cut of 20%, we will achieve levels of unemployment similar to the first Depression. I got news for you, Edward Hadas, Martin Hutchinson and Antony Currie (the writers of this analysis, which I’m sure will be adopted by many firms sitting on mounds of cash and still not hiring), we’re already there.
Thursday, November 5, 2009
Get High--Save the Economy!
Ever since the Justice Department announced it would no longer raid medical marijuana dispensaries, the stores have been growing like weeds. 14 states have medical marijuana laws on the books.
Colorado now has over 60 stores from less than two dozen in January. The ganjapreneurs are advertising in local papers. And other budding businesses are thriving alongside them.
As Mark Van Grack, owner of Hapa Sushi in Boulder says :
In July, 80% of the voters in Oakland, CA passed a law taxing medical marijuana dispensaries at the behest of one of their biggest ganjapreneurs.
Legalizing the plant may alter side effects of illegal marijuana activity such as cutting into the profits of the Mexican drug cartels. Didn't that happen after Prohibition?
Not all side effects of the medical marijuana business are known. But add-on businesses and greater tax revenue can ease a lot of pain.
Colorado now has over 60 stores from less than two dozen in January. The ganjapreneurs are advertising in local papers. And other budding businesses are thriving alongside them.
As Mark Van Grack, owner of Hapa Sushi in Boulder says :
If you're going to smoke pot, you're going to get the munchies, so come to Hapa to eat.
In July, 80% of the voters in Oakland, CA passed a law taxing medical marijuana dispensaries at the behest of one of their biggest ganjapreneurs.
"It is important because the city of Oakland is facing a massive deficit like many jurisdictions in California, said Steve DeAngelo, a leader of one of the city's cannabis clubs. "And we decided to step up to the plate and make a contribution to the city in a time of need."
DeAngelo, one of the people who led the effort to get the tax approved, said his business will now have to pay more than $350,000 from the new tax next year.
Legalizing the plant may alter side effects of illegal marijuana activity such as cutting into the profits of the Mexican drug cartels. Didn't that happen after Prohibition?
Not all side effects of the medical marijuana business are known. But add-on businesses and greater tax revenue can ease a lot of pain.
Sunday, November 1, 2009
Ayn Rand's Revenge
Under the headline "Ayn Rand's Revenge", The NY Times put a bio book,”Ayn Rand and the World She Made” on the cover of its Book Review today. It seems that only the Bible sells more copies per year than her magnum opus of unfettered, soaring phallic power. To quote from her hero, John Galt:
According to this article, Atlas Shrugged is the favorite tome of the right. Casting aside the believability that tea baggers and Glen Beck have actually read her 1000+ page book, Rand’s Objectivist philosophy as embodied by Galt is perfect for both Wall Streeters and people who shout, “Don't let the government touch my Medicare” alike. Basically, one could be a member of the elect and victimized by the effete elite without any distinguishing characteristics beside devotion to Ayn. The woman who despised the masses and collectivism built a massive cult around herself and it’s more powerful than ever.
(By the way, the obscure company that did cleanup on the ill-fated Deutsche Bank building was named after the broad-shouldered hero of AS, known as the John Galt Corporation. Two firefighters died there in August 2007 trapped in its ruins because John Galt Corp removed a pipe connecting the building to its water supply.)
Two years ago on September 15, 2007, about a month after the Deutsche Building collapsed and killed the firemen, I wrote about another breathless New York Times article regarding the power of Rand:
As America enters an unprecedented time of falling housing prices and widespread foreclosure, I found the article in The New York Times “Ayn Rand’s Literature of Capitalism” by Harriet Rubin interesting.
According to the article, many business leaders, including Alan Greenspan, who is currently flogging his book, The Age of Turbulence, were strongly influenced by Rand’s novel Atlas Shrugged. Greenspan blamed everyone but himself for the credit crisis, although he was at the Fed’s helm when the interest rate was cut to 1% in 2003 and praised adjustable rate mortgages as most efficient.
Wall Street decided to offer mortgages borrowers could not afford simply because they could repackage these loans into mortgage-backed securities, insisting the MBS eliminated risk, and reap incredible fees.
These business leaders were greatly influenced by the book. It is the story of the prime movers of society going on strike because society doesn’t appreciate them; in fact, they are exploited and robbed of their dignity. They refuse to contribute their inventions, art, business leadership, scientific research or new ideas of any kind to the rest of the world.
The view of the prime movers is that society hampers them by interfering with their work and underpays them by confiscating the profits and dignity they have rightfully earned. The peaceful cohesiveness of the world requires those individuals whose productive work comes from mental effort.
But feeling they have no alternative, they eventually disappear from the communities of “looters” and “moochers” who bleed them dry. The strikers believe that they are crucial to a society that exploits them, and the near-total collapse of civilization triggered by their strike shows them to be correct.
The book reflects the mindset of many of those who helmed Wall Street institutions that are now extinct [Bear Stearns, Lehman] or swallowed up [Merrill Lynch] or still have a pulse. To regulate them is to “loot” or “mooch” off them. They are of a superior class; therefore they are entitled to play by different rules, all for the benefit of society.
I don’t think Rand believed that self-interest had to be enlightened to benefit society; all the prime movers like Angelo Mozilo (Countrywide), John Thain (Merrill Lynch), Lloyd Blankfein (Goldman Sachs), Henry Paulson (formerly Goldman Sachs, now sadly our Treasury Secretary) just have to be self-interested and somehow, voila! Wave an invisible hand and society benefits. They took the gold; we the taxpayers take the dross, and none of them accepts responsibility or faces any kind of comeuppance.
I, too, was influenced by literature but not Ayn Rand. She wrote stiff characters who spoke ridiculous dialogue and had romance-novel sex. I suggest these business leaders try another message novel:
The Jungle(1906) by Upton Sinclair
The Jungle is the story of Lithuanian immigrants working in Chicago’s Union Stock Yards at the beginning of the 20th century. It depicts a world of poverty and lack of any social contract, subhuman living and working conditions and generally utter hopelessness prevalent among the have-nots, contrasted with the deeply rooted corruption on the part of the haves. Workers are forced to low-bid their labor in a desperate attempt to compete and survive.
In The Jungle workers are shown falling into meat processing tanks and being ground, along with animal parts, into “Durham’s Pure Leaf Lard.”
The disgusting, fetid, filthy working conditions and exploitation of women and children depicted in the Jungle led to the passage of the Meat Insepction Act and the Pure Food and Drug Act of 1906, which in turn led to the Food and Drug Administration.
What are your favorite message books? Try Sinclair Lewis's It Can't Happen Here (1935) for a glimpse of the future.
“We have granted you everything you demanded of us, we who had always been the givers, but have only now understood it,” Galt lectures the “looters” and “moochers” who make up the populace. “We have no demands to present you, no terms to bargain about, no compromise to reach. You have nothing to offer us. We do not need you.”
According to this article, Atlas Shrugged is the favorite tome of the right. Casting aside the believability that tea baggers and Glen Beck have actually read her 1000+ page book, Rand’s Objectivist philosophy as embodied by Galt is perfect for both Wall Streeters and people who shout, “Don't let the government touch my Medicare” alike. Basically, one could be a member of the elect and victimized by the effete elite without any distinguishing characteristics beside devotion to Ayn. The woman who despised the masses and collectivism built a massive cult around herself and it’s more powerful than ever.
(By the way, the obscure company that did cleanup on the ill-fated Deutsche Bank building was named after the broad-shouldered hero of AS, known as the John Galt Corporation. Two firefighters died there in August 2007 trapped in its ruins because John Galt Corp removed a pipe connecting the building to its water supply.)
Two years ago on September 15, 2007, about a month after the Deutsche Building collapsed and killed the firemen, I wrote about another breathless New York Times article regarding the power of Rand:
As America enters an unprecedented time of falling housing prices and widespread foreclosure, I found the article in The New York Times “Ayn Rand’s Literature of Capitalism” by Harriet Rubin interesting.
According to the article, many business leaders, including Alan Greenspan, who is currently flogging his book, The Age of Turbulence, were strongly influenced by Rand’s novel Atlas Shrugged. Greenspan blamed everyone but himself for the credit crisis, although he was at the Fed’s helm when the interest rate was cut to 1% in 2003 and praised adjustable rate mortgages as most efficient.
Wall Street decided to offer mortgages borrowers could not afford simply because they could repackage these loans into mortgage-backed securities, insisting the MBS eliminated risk, and reap incredible fees.
These business leaders were greatly influenced by the book. It is the story of the prime movers of society going on strike because society doesn’t appreciate them; in fact, they are exploited and robbed of their dignity. They refuse to contribute their inventions, art, business leadership, scientific research or new ideas of any kind to the rest of the world.
The view of the prime movers is that society hampers them by interfering with their work and underpays them by confiscating the profits and dignity they have rightfully earned. The peaceful cohesiveness of the world requires those individuals whose productive work comes from mental effort.
But feeling they have no alternative, they eventually disappear from the communities of “looters” and “moochers” who bleed them dry. The strikers believe that they are crucial to a society that exploits them, and the near-total collapse of civilization triggered by their strike shows them to be correct.
The book reflects the mindset of many of those who helmed Wall Street institutions that are now extinct [Bear Stearns, Lehman] or swallowed up [Merrill Lynch] or still have a pulse. To regulate them is to “loot” or “mooch” off them. They are of a superior class; therefore they are entitled to play by different rules, all for the benefit of society.
I don’t think Rand believed that self-interest had to be enlightened to benefit society; all the prime movers like Angelo Mozilo (Countrywide), John Thain (Merrill Lynch), Lloyd Blankfein (Goldman Sachs), Henry Paulson (formerly Goldman Sachs, now sadly our Treasury Secretary) just have to be self-interested and somehow, voila! Wave an invisible hand and society benefits. They took the gold; we the taxpayers take the dross, and none of them accepts responsibility or faces any kind of comeuppance.
I, too, was influenced by literature but not Ayn Rand. She wrote stiff characters who spoke ridiculous dialogue and had romance-novel sex. I suggest these business leaders try another message novel:
The Jungle(1906) by Upton Sinclair
The Jungle is the story of Lithuanian immigrants working in Chicago’s Union Stock Yards at the beginning of the 20th century. It depicts a world of poverty and lack of any social contract, subhuman living and working conditions and generally utter hopelessness prevalent among the have-nots, contrasted with the deeply rooted corruption on the part of the haves. Workers are forced to low-bid their labor in a desperate attempt to compete and survive.
In The Jungle workers are shown falling into meat processing tanks and being ground, along with animal parts, into “Durham’s Pure Leaf Lard.”
The disgusting, fetid, filthy working conditions and exploitation of women and children depicted in the Jungle led to the passage of the Meat Insepction Act and the Pure Food and Drug Act of 1906, which in turn led to the Food and Drug Administration.
What are your favorite message books? Try Sinclair Lewis's It Can't Happen Here (1935) for a glimpse of the future.
Saturday, October 31, 2009
There's Good News & Bad News
The good news is, the real estate market in Manhattan will pick up. More luxury condominions will sell in the half-empty skyscrapers built at the top of the market bubbble.
The bad news is that it's because of the huge bonuses doled out by GS, MS, Citigroup, BofA and JP Morgan Chase thanks to government direct loans and loss guarantees.
The Treasury and Fed never set up loan facilities (TALF, PIP, FDIC) for non-commercial banks before. It's questionable as to whether they even had the authority to do so.
The bad news is that it's because of the huge bonuses doled out by GS, MS, Citigroup, BofA and JP Morgan Chase thanks to government direct loans and loss guarantees.
The Treasury and Fed never set up loan facilities (TALF, PIP, FDIC) for non-commercial banks before. It's questionable as to whether they even had the authority to do so.
Friday, October 30, 2009
Words to Live By
All that is necessary for the triumph of evil is that good men do nothing.—Edmund Burke
The best lack all conviction, while the worst
Are full of passionate intensity.—W.B. Yeats
The Aggrieved Wall Street Man:
Don’t you understand that you are not a human with feelings we have to consider? You are merely a cog, a commodity to serve the greater good, which is us?
What are the arguments made?
Without us, the financial system will collapse.
There is only capital. No labor necessary.
The best lack all conviction, while the worst
Are full of passionate intensity.—W.B. Yeats
The Aggrieved Wall Street Man:
Don’t you understand that you are not a human with feelings we have to consider? You are merely a cog, a commodity to serve the greater good, which is us?
What are the arguments made?
Without us, the financial system will collapse.
There is only capital. No labor necessary.
Thursday, October 29, 2009
Ungrateful Wall Street Disses Obama Fundraiser
The Wall Street recipients of the Obama administration’s largesse are paying him back by withdrawing their fundraising presence.
The firms which received the most bailout money, including Goldman Sachs, Citigroup and J.P. Morgan Chase, will be sending less than a dozen representatives to a major Democratic fundraising event headed by President Obama in NYC. These are the same firms that raised millions of dollars for him during his presidential campaign, during which he spent a record amount estimated at $750 million. They are projected to donate less than a combined $92,000 to this affair.
Ostensibly this is because they are worried about the appearance that their donations will be seen as quid pro quo for their no-strings-attached lines of credit and direct loans. It is also an attempt to tamp down populist anger at the billion-dollar bonuses to be paid out in January 2010 for their 2009 performance, the profits from which were largely due to the backing of the full faith and credit of the United States Treasury.
But they also feel resentful and put upon by the regulatory zeal and tough talk coming out of Washington. As reported in the NY Times:
To expect a quid pro quo was understandable. The enormity of the assistance provided to the financial sector is estimated at $12.9 trillion and counting.
Now that the firms have gotten what they sought (explicit government backing for any future losses, loud proclamations that the worst is over, loss of urgency for meaningful change), Obama no longer is useful. Because the strength of the sector lies in the bets it makes for its own benefit, Wall Street has probably placed its bets elsewhere, perhaps even further to the right, awaiting the inevitable change of guard in the face of continuing American human misery.
The firms which received the most bailout money, including Goldman Sachs, Citigroup and J.P. Morgan Chase, will be sending less than a dozen representatives to a major Democratic fundraising event headed by President Obama in NYC. These are the same firms that raised millions of dollars for him during his presidential campaign, during which he spent a record amount estimated at $750 million. They are projected to donate less than a combined $92,000 to this affair.
Ostensibly this is because they are worried about the appearance that their donations will be seen as quid pro quo for their no-strings-attached lines of credit and direct loans. It is also an attempt to tamp down populist anger at the billion-dollar bonuses to be paid out in January 2010 for their 2009 performance, the profits from which were largely due to the backing of the full faith and credit of the United States Treasury.
But they also feel resentful and put upon by the regulatory zeal and tough talk coming out of Washington. As reported in the NY Times:
There is some failure in the finance industry to appreciate the level of public antagonism toward whatever Wall Street symbolizes,” said Orin Kramer, a partner in an investment firm who is a Democratic fund-raiser and one of the event’s chairmen. “But in order to save the capitalist system, the administration has to be responsive to the public mood, and that is a nuance which can get lost on Wall Street."
Dr. Daniel E. Fass, another chairman of the event who lives surrounded by financiers in Greenwich, Conn., said: “The investment community feels very put-upon. They feel there is no reason why they shouldn’t earn $1 million to $200 million a year, and they don’t want to be held responsible for the global financial meltdown.” Dr. Fass added, “How much that will be reflected in their support for the president remains to be seen.”
To expect a quid pro quo was understandable. The enormity of the assistance provided to the financial sector is estimated at $12.9 trillion and counting.
Now that the firms have gotten what they sought (explicit government backing for any future losses, loud proclamations that the worst is over, loss of urgency for meaningful change), Obama no longer is useful. Because the strength of the sector lies in the bets it makes for its own benefit, Wall Street has probably placed its bets elsewhere, perhaps even further to the right, awaiting the inevitable change of guard in the face of continuing American human misery.
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