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Rentiers vs. Capitalists, Yahoo CEO Edition

2017 April 28

We tend to think of rentiers as being property owners, but a rentier is anyone who uses control of position to extract monopoly profits. CEOs appoint boards, boards determine CEO compensation, and corporations can pay obscene amounts of money, even when they aren’t making a profit. Heck, even if they’re being taken over.

Corporate America prides itself on rewarding success and punishing failure. Yahoo CEO Marissa Mayer does not fit comfortably into that narrative. During her five-year tenure at the once-proud tech firm, user levels stagnated, ad revenue dropped, acquisitions cratered, layoffs accelerated, product quality floundered, and hackers stole the personal information of more than one billion users.

But when Yahoo’s sale to Verizon becomes official in June, with the restructured company renamed Oath, Mayer will walk away with $186 million, according to a regulatory filing released this week. That includes shares of Yahoo stock Mayer owned, stock options, and a $23 million “golden parachute” of cash, restricted stock units, and medical benefits. Mayer did relinquish $14 million while taking responsibility for the Yahoo Mail data breach, but she’ll get 13 times that amount just to no longer remain part of the company.

I should point out that the first part–“priding itself on rewarding success and punishing failure”–is pure bullshit when it comes to executives and CEOs, pure mythology. Ordinary workers may (sort of) live in that world, though they get little reward for success, but high ranking executives are compensated irregardless of how their companies are doing. The worst performing CEOs get higher compensation.

If you want to be well paid as a CEO, perform like shit. Science backs it up!

This is not capitalism. This is rentierism. The value of all the loans taken by pbulic corporations in the 2000 run up to the 2008 crash was equal to the stock buybacks made by public corporations.

Why? Because most executive compensation is through stock options!

It’s good to be the Queen/Duke. Ahhhhh…what a life.

And this, folks, is why you don’t have nice things: Because these people run your society and make most of the important decisions. To say that they are parasites is to be generous; many parasites shade towards symbiosis, these people make the economy and their companies perform worse than it would if they did not exist. Restrict compensation to up to seven times the median, fire everyone who earns more, and promote those below them and I guarantee that in ten years the economy would be much better.

You can have lots of really rich people or a good economy; you can have lots of rich people or a democracy.

Those are the choices.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

The Age of War and Revolution

2017 April 26
by Ian Welsh
The Course of Empire by Thomas Cole

The Course of Empire by Thomas Cole

I have labelled the next era “the age of war and revolution”, in fact, there’s even a category  for it.

I expect this for economic, geopolitical, technological and environmental reasons.


The developed world has soaring inequality and is stagnated. Real value is not being created, instead it is being cannibalized through financial games by rentiers: they take all the profits and download all the risk on to others, as the 2008/9 bailouts illustrated (the bankers are fine, no one else is.)

Deliberate austerity thru political decisions has damaged the economy. Demand has been insufficient for decades, but we are now extremely sclerotic after the response to the financial crisis was “bail out the people who caused it, make everyone else pay.” Even by the logic of capitalism, this is crazed: capitalism says “if you lose your money, you weren’t allocating it properly”.  Capitalism works, to the extent it does, because people who make good allocation decisions get more money and thus get to make more allocation decisions, while those who allocate money (really resources) badly, lose it, and can’t make as many decisions.

Bankers, who are the primary resource allocators in our society (it is not even close, they create the vast majority of all money, not governments) made such bad decisions, on aggregate, that they lost all their money.  Under capitalism that’s how it would have stayed, and other people would have taken over their function, having learned from their loss.

Since we refused to do so, the opposite lesson was learned ‘do more of this’.  And so the policies which drove us into the ground continue.

Now, like the old-fashioned white male CIS blah, blah, that I am, I am lumping a lot of the social issues under economic. That isn’t because they are entirely caused by economics, but because economics is the independent variable which is driving the rise of the “alt right” and so on.  As the economy has become worse, people have fallen back on whatever identity they already have, and found enemies. That is what people do.

Back in the mid 70s, I said to my father “I don’t see a lot of racism”. (I lived in Vancouver, flush with Chinese.)  He shook his head and said “no, because times are good. Wait till times are bad, you’ll see plenty then.” My father was a child of the Great Depression.

‘Nough said.

Alternatives to neoliberalism will continue to rise. Neoliberalism is now a zombie. It still shuffles along, eating brains, but it’s dead and the only question is how many people it will impoverish and kill before it dies. Well, and what will replace it.

I want to emphasize something here: almost all social welfare statistics track economic inequality, not absolute access to goods.  People are happy, or sick, or whatever, based on how unequal their society is, and almost nothing else, provided the society is beyond the bare subsistence level.

Inequality matters, it drives almost everything.  People who feel unequal are unhappier, stressed and sick. The data on this is conclusive, those who wish to read it, may look it up in the book “The Spirit Level”.

So it doesn’t matter if Thelma has a TV and a smartphone, what matters is that she’s scared all the time because if she loses her job she’s screwed, and as a result she has to do whatever her boss says.  She has little real freedom, save the right to become homeless.  And that fear is constantly there, even if it is subconscious.

This fear goes right through the economy, including in many who would be considered upper class (not rich, but the professionals who make 150K+/year).  Anecdotally, almost all upper class and upper middle class women seem to be on psychoactive prescription drugs, for example.

Economic problems take time to ripple thru political system because after 30 most people don’t tend to change their views. They believe what they believe, they are who they are, and while age produces real changes, it doesn’t tend to change their politics, absent absolute catastrophe.

But we are now moving to the other side of that. For decades people put up with decline, but now the youngsters, some of whom are in their early 30s, have never known anything but a failed system and a bad economy.  This political world has never worked for them, ever: they have no emotional investment in it, no habit of supporting it.

So, as we continue our economic decline; as inequality gets worse and worse, and as the coming generations move to the age where they are politically viable, the current time ends.

The next set of rulers and their supporters will try new things; new systems.  They will be willing to revolt.  The age of neoliberalism is all but over.


The United States is in decline. China is now the world’s largest manufacturer, with a larger population.

Historically, declining empires (and if you don’t believe that the US is an empire, please search for a map showing all and consider that the US routinely bombs countries it doesn’t like, without a declaration of war), always spawn wars and crises.  The decline of England spawned two world wars, fighting against the rising power, Germany.  (America won that.)  Spain’s decline caused great convulsions, and so on.

America arrogates a great deal of power to itself.  China building islands in what is, after all, their near sea, is China saying “we are the power here, not you. You cannot use your fleet here freely any more.”  (Well, the US still can, but not for much longer, if China doesn’t like it.)

In pre-industrial societies military power did not always (or even often) track economic capacity.  (The Chinese, twice conquered by horse nomads, are well aware of this.)  But in industrial and post-industrial societies it does. He who can make the most weapons that are good enough and match to soldiers, wins, with limited exceptions.

Which is to say, while China does not have the military the US has, yet, it now has the potential to have a bigger, stronger one. More industry, more people.

Though people are becoming less important, which leads us to…


The technology of warfare and production are both changing. I am not convinced automation has reached the tipping point people make it out as having done, the industrial revolution did the same and was handled, but rising automation into sclerotic demand and an insistence of distributing money thru jobs is one of the factors driving the economic problems we already discussed.  The more capitalists think they don’t need workers, combined with refusing to do something akin to a basic income or employ less people for more money or radically decrease the work week without decreasing wages, the greater the problem.

The change in warfare is more interesting, and deeply problematic. As many people have observed, Orwell among them, violent technology underwrites constitutions. Mass armies full of riflemen, where women must work in the factories lead very directly first male then universal sufferage. Ancient Greek City states and Swiss cantons enfranchised exactly the fighting population.

Iraq saw the rise of area denial warfare, where the state could not be defeated on the field, but could not rule.  Now we are moving to a world of drones and autonomous robots.  People will be less and less needed to fight wars.  This is not a good thing, but—

—drone and autonomous robot technology is not necessarily a tech for the powerful. In fact, I suspect this is a technology of the weak. They aren’t that hard to make and will become increasingly easier to make. Any idiot who wants to make them will eventually be able to do so.

So you wind up either will police states (which we are moving towards, with our extreme surveillance societies) or societies where anyone can be killed.  There is no way most leaders can be defended, it cannot be done.

I will not cry for this.  The ridiculous ramparts in world capitals, which did not exist 60 years ago, exist exactly because politicians no longer work for their populations.  Ages of assassination also tend to be ages where the population is better taken care of, because the best way to keep someone from committing political violence is to keep them happy. A man who is happily married, who is relatively equal, who looks forward to his life and feels he can do things that are meaningful does not build drones in his basement.

Happy people who are in loving relationships and/or enmeshed in supportive communities may commit horrific communal violence, but they don’t tend to become terrorists.

However, the point is that the tech will become more and more available, and another age of terror and assassination will arise in its wake. To avoid that we will have reorganize our societies: we can do so either by making them surveillance police states or by making people happy.


We are facing a triple or quadruple threat. Climate change, environmental collapse, population increase and water shortages. Severe water shortages.  These factors are going to make the crises much, much worse.  Whole regions of India, China and the US will stop being agriculturally productive, due to aquifer depletion, for example.  Swathes of land will become uninhabitable without air conditioning for months at a time. Changing rainfall patterns will make other, formerly productive land, unproductive.

Environmental collapse is harder to figure in, exactly, but as ecosystems collapse we can expect that to have unexpected and often catastrophic effects. Will the seas be taken over by jellyfish? What happens when all the alpha African predators are gone?  Will honeybees wind up extinct?  What happens to Japan when global fish stocks take their final swan dive (possibly recovering 25 years later)?

Meanwhile, while most developed countries have stable or declining populations, many developing countries have seen increases of a thousand percent or more, and will increase even further.  This is especially the case in Africa, large swathes of which will be hit hardest by climate change.

All of this means that we will be undergoing a cyclical change (collapsing hegemonic power, new technology of violence, new technology of production) at the same time as we are facing environmental catastrophe with an unprecedentedly large population.

The so-called refugee crisis right now is nothing compared to those coming. Populations in the tens of millions will move within periods of just a few years.  Countries which run out of water and thus ability to feed their population are very likely to go to war (if they don’t, their own populations will likely kill the leadership). Governments will collapse just based on environmental issues; wars will be fought over them, especially over water and arable land (this is one reason I am scared for Canada. When the US wants our water and land…)

Concluding Remarks

It is quite hard to predict history in the short term, where the short term means years, or even a decade or two.  It is very hard to predict history in the long term of centuries or millennia.  But between that it is quite easy. Each ideology, each empire, each economic system has a best by date. Some last longer than others, but all end, and they do so in fairly standard order.

We are near the end of an ideological order: neoliberalism. We are near the end of war-making technological era, with the rise of robots.  We are near the end of a production technological era, with the rise of AI and bots.

Combined with environmental catastrophe (and nukes), this makes what is coming down the line much worse than the normal cyclical change.  Much, much worse.  We can create a better world, or a few better societies, out of it, to be sure, but there is probably no avoiding the Age of War and Revolution which is soon to be upon us.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

Open Thread

2017 April 25
by Ian Welsh

Round two of shuddery-cold fever has me in its grip, so please use this threat to talk among yourselves, should you so wish.

Obama Starts Cashing In Directly for Bailing Out Wall Street

2017 April 24
by Ian Welsh

Not confirmed, at this point.

“What sources are telling FOX Business Network is that former President Obama, now less than 100 days out of office, has agreed to a speaking engagement during Cantor Fitzgerald’s healthcare conference in September,” FBN’s Gasparino said. “We understand that he is going to be the keynote speaker for the lunch, and he’s going to receive a fee of $400,000. We should point out that that’s in line with what Hilary Clinton got… we should point out that Cantor will neither confirm or deny.”

Politicians are owned, not because of campaign donations, but because they are taken care of once they out of office. For many (though not Obama), it’s also because, while in office, their friends and family are taken care of.

Other than this being domestic bribery, and legal, I don’t see a great deal of difference between this and Trump’s conflicts of interest. The bottom line is that Obama made sure the bailouts for Wall Street continued, and he is being rewarded for it.

This is corruption. It is evil. And millions of people suffered for it. Many died. Obama’s administration was very deliberate in not helping homeowners in any serious way (in fact, harming them). They didn’t help homeowners because they felt doing so would hurt banks. Millions lost their jobs, and the economy never fully recovered.

Obama wasn’t the worst president, but that’s because there is lots of competition. But he was a terrible wasted opportunity, is corrupt and did immense evil. The inability of many to recognize that people like Obama (and Bush, and Clinton, and Trump, and Harry Reid and…), in real terms, are far more dangerous to them than someone like bin Laden, is a very real and proximate cause of vast suffering.

There will be many who defend him, but this is indefensible, as was much of his behaviour in office. If you hate Trump, understand that, absent Obama’s failure to make enough Americans better off, there is no Trump as president.

And now, now he’s getting his pieces of silver. I hope they are worth what he sold for them.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.



Macron vs. Le Pen in France

2017 April 23
by Ian Welsh

This is the final showdown. A reminder, Macron ran Hollande’s economic policy, and wants to do even more “liberalizing” of the French economy. A.K.A., more gutting of worker’s rights, wages, and so on.

The polls show Macron winning, but given the reliability of polls lately, who knows?

What I do know is this: Macron will swiftly be as popular as Hollande (meaning, in the doghouse), and the next election, if LePen doesn’t win this one, will be LePen’s to lose (and if she loses, it will be to someone like Melanchon—a left wing populist).

Britain needs LaPen to win. LePen is willing to take the pain to Frexit. She won’t be slowed down by the EU’s promises of pain–instead, she’ll pile it on.

This is what 37 years of international neoliberalism has brought, and bought, us.

(Oh, and Corbyn is Britain’s only chance to do Brexit in a way that isn’t an enema with a sledgehammer, but it looks like that’s what Brits want.)

Should be interesting, anyway.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

How to Think About Thoughts

2017 April 23
by Ian Welsh

I wanted to title this “The Thoughts Are a Lie,” but it wouldn’t be true. Not entirely. Some thoughts are a lie, some thoughts aren’t, many are half-truths.

To mangle a pair of modern metaphors, thoughts are context-sensitive help combined with auto-correct, and both are based on emotional charge and salience.

For example, my mind, on hearing or even thinking the phrase “My name is…” will automatically fill in “Inigo Montoya.”

In the 70s, when I was young, dinosaurs still—-I mean, scientists announced that cholesterol was bad, mmmmkay, and margarine became a thing. Not only was it “better for you” than butter, it was a heck of a lot cheaper.

The butter producers struck back with an ad, and as a result, whenever my brain hears “butter” it automatically fills in “tastes better, naturally!” (My search engine fu has failed to find a copy online.)

Thanks, Brain. (Also, as best I can tell, margarine is probably worse for you than butter, just like most artificial sweeteners are worse for you than just chowing down on sugar.)

This same process is at work with all sorts of stuff for everyone. (The following examples aren’t necessarily personal.)

At the personal level, we may see a friend’s face as cold if it passes over us and think he’s angry at us. On inquiry, he’s just having a bad day. A pack of boisterous young men may trigger non-verbal fear; or a black man. Or white men with buzz cuts, depending on our history and politics.

We may see someone with long hair and think “damn hippy.” Or we see a man in a suit and think “fucking suit” or have feelings of deference (or both). If you think most people don’t defer to men in suits, you’re quite wrong; I used to amuse myself by dealing with the same person dressed up and dressed down. Not only was the treatment almost always completely different, most of them didn’t even recognize that they’d dealt with me before.

The people who impressed me were the ones who treated me the same no matter how I was dressed.

Thoughts are conditioned. What has been impressed upon us in the past plays out in the present and the future, whether it is appropriate or useful. The worst of this is when the original conditioning was mixed. The word love is like this for most people. Their parents told them they loved them, then punished or mistreated them, sometimes horribly.

They love their parents, they also hate them, and they are scared, and love brings up all of these feelings and chains of thought which have nothing to do with the current relationship, and everything to do with the relationships where they learned to love.

Thoughts are, thus, best regarded as information before the senses, like any other information. The same is true of feelings. They may be true and valid, or they may be crap–prejudices or emotional battery from the past, completely inappropriate to the current situation.

The thoughts, and often the emotions, are a lie.

There’s a strain of modern “thought” which says that all emotions are valid. Well, they’re all real, they aren’t all appropriate or accurate. (That said, if you feel scared around someone, I’d generally obey that particular emotion and get the fuck away, especially if you aren’t sure you can take them in a fight.)

This is true on a personal level, and it is true on a political level. People’s political opinions are conditioned reflexes in almost all cases: They have not spent time carefully thinking them through. Someone they respect told them something, they identify with that person, they adopt that belief. Or they read it somewhere and never thought about it, or it’s the most common belief in their peer group, and if they want to be liked (and they do) they’d best say it; and after a while they believe it.

Heck, often immediately. If you like someone, you tend to accept their beliefs as valid unless you have strong reason not to. In fact, one of the core functions of being a friend is validating the other person. You may occasionally push back, but it tends to be occasional. (The sort of teasing relationships many people have don’t contradict this.)

Humans are bundles of conditioning, and we run with that conditioning most of the time, not thinking about it or challenging it. That conditioning manifests as thoughts and emotions (which are just feelings in the body), and we take them as valid–even true–most of the time, because they are our feelings.

But very often they aren’t. If they are, it’s by chance, we sure haven’t validated them.

Most thoughts don’t require us to believe them, and we’re happier if we don’t. In most cases, if we treat thoughts as if some random dude had just spewed them, we’d be more likely to judge them, or dismiss them, properly.

And, frankly, most people are happier that way.

One of the secrets of suffering is that you suffer for anything you identify with. If someone says “favorite politician is a corrupt bozo,” you only care if you identify with that politician. You’re only bothered.

You think thoughts are “yours” and you identify with them, and you suffer because of that identification, when if some random bozo said the same thing, you might well laugh it off.

Reduce your identification, don’t assume validity, and thoughts lose a lot of their power to harm you, to control you and to misdirect you. Given that most of your thoughts are just conditioned reflexes, from conditioning you did not choose, that is the correct way to treat them.

The same, in general, is true of feelings, with a partial exception for fear (if you fear someone in your life, you’re probably right and shouldn’t take the chance you aren’t, get out).

Treat thoughts and emotions this way, and you’ll be far happier, too.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

British General Election Called for May 8th

2017 April 18
by Ian Welsh

Oh joy.

Makes sense, however, Prime  Minister May’s Conservative party is up 17 percent over Corbyn’s Labour and she must expect to increase her seat count. In addition, there’s a good chance Corbyn is out, if he doesn’t get a lot more seats than expected. He doesn’t have to win, but he does need to beat expectations. Expectations are low, at least.

Corbyn being out is good for May because standard centrist-Labour leader X will not undo most of what a Conservative government does even if it wins, whereas Corbyn will undo everything and then kick it into reverse.

I, of course, will be hoping Corbyn does well, but it doesn’t look good. Even if he does better than expected, Scotland appears to be a write-off.

I will remind you that an academic study found that 89 percent of all newspaper articles lied about Corbyn’s position. He’s an existential threat to the current establishment, after all.

This is an awkward election overall, as May is positioning it as a referendum on Brexit, but Labour doesn’t oppose Brexit, the SNP is Scottish and the Lib-Dems (who do oppose Brexit) are violently distrusted by anyone with sense after they helped the Conservatives push through some of the worst retrogressive policies in generations.

Should be fun. This is one I actually care about a bit, so I’ll be hoping the polls are off and that Corbyn gets some wind.

(Given how absolutely cruel the Conservatives are, I will judge Britons who vote Conservative harshly–not that there’s any reason for any such Briton to care…nonetheless.)

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.

Open Thread

2017 April 17
by Ian Welsh

I’m rather under the weather, so please use this post to talk among yourselves, if you so desire.