Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Class Warfare Page 15 of 36

The Rule of Alienation and Stability

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On December 16, 2018

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One of my favourite sights is people complaining that marginalized people don’t understand that their support for Bad Politician-X results in fucking themselves.

“Sure,” runs the line, “their lives suck now. But they’ll suck even worse if this guy gets into power.”

This is often (but not always) true. It is also irrelevant.

The rule is simple: Alienated people are always targets for alternative political movements. Sometimes those movements are good, sometimes bad. But if you don’t want this to happen, your society has to give alienated people genuine expectations of a better future when they play within the system.

When a huge number of people, a plurality, feel that they have little hope for a better future, and a realistic expectation for a worse future, they are willing to roll the dice, even if the odds are bad. After all, they already know that the current world is shitty and the future is worse.

It does not matter if this seems irrational on cost/benefit scales; what matters is the chance, rather than what they see as a certainty.

Now, understand always, that sometimes what is offered IS better. FDR was better. So was Huey Long. Corbyn in Britain will be better than the status quo. (This is why the voting gap for youngsters disappeared for him. Young people vote when they are offered what they need.)

Sometimes it is worse, if not in the short run, then in the long run. Or, if not for you, then for other people in your society (see Hitler and Mussolini for cases of both).

People who love the status quo, who want it to continue, have to make it work for most people. If their policies, no matter how reasonable they seem to the beneficiaries of the current system, whatever it is (Ancien Regime France, for example) plunge a plurality into despair, that plurality will always be ripe for turning on the system.

It really is that simple? Love your system? Okay. Make it work for almost everyone. In excess of 90 percent. Not because you are moral or ethical, most of you probably aren’t, but out of sheer self-interest.

If you don’t, don’t whine when those you left behind decide to take almost any chance to change things.

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 Over-priced Is the US Housing Market?

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On October 2, 2018

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This is one answer:

The bottom line, then, is that it’s more overbought than it was in 2008.

If the government had not intervened to keep it over-inflated, it would likely have reverted to mean, but trillions of dollars were spent, and many laws were bent and indeed, broken, to keep house prices up.

Indeed, 2008 was used as a buying opportunity: Distressed homes were bought up at cents on the dollar, then rented or sold at inflated prices.

The entire economy is crooked: It is designed to favor the rich no matter who else that hurts.

There are little people who win, but they are fewer and fewer. And virtually no one below the age of 40 is a winner in this unless they are professionally involved, i.e., in on the scam.

Housing should never have been thought of as an investment. Houses should be for living in, and people who own them to flip them should be heavily penalized. Those who own them and leave them empty should have them seized by the government and auctioned. And, yeah, some form of rent control is needed in most places.

Of course foreign buyers must be kept out of the market. Housing is for people who live in the country; foreigners can rent.

As for mortgages, they should be dead boring; for most people fixed rated mortgages of 20 to 30 years fit.

None of this should be objectionable. But there are people making a lot of money out of the misery of other people, and parasites don’t like letting go of their hosts.

Parasitical economies–and most developed countries have one–exist by immiserating people.

This is the real reason for the current push for basic income: The parasite class is scared they may be about to kill the host, and want a government infusion to keep the poor and the (reduced) middle class stumbling on.

I don’t oppose a basic income, but understand that billionaires aren’t supporting it out of the goodness of their hearts. They expect to take every cent the government gives you.

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.

 

Most “High Performers” Are Just Better Parasites

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On May 2, 2018

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Most so-called high performers are just excellent parasites. Amazon pays no tax and many of their employees are on food stamps and welfare. Walmart encourages its workers to go on food stamps, while it guts municipal tax bases. Apple actively avoids taxes and both Apple and Microsoft built their entire business on technology they stole from Xerox. Microsoft, in particular, built their business on monopolistic practices that would have led to the breakup of the company if Bush’s administration hadn’t interfered.

The asshole “high performers” in the financial industry required a many trillion dollar bailout. They should have all gone bankrupt and most of them should have gone to jail. They threw much of the world into an economic crisis which has still not ended. They are high performance ticks (leeches have benefits, they are very close to pure negatives.) The oil industry receives massive subsidies, and so on and so forth.

Studies show that consumption of social media correlates with decreased well-being and unhappiness, and the more you consume the worse it is. The evidence for this is overwhelming. They do it with less employment than prior industries and pay less taxes. This is not the behavior of a symbiote, it is the behavior of a parasite.

The simple FACT is that during the 50s and 60s, when high earners (whom fools seem to think are the same as high performers) were massively taxed the economy did far better.

All other things held equal, it is relative equality (not absolute, do not straw man) that makes for better economies and societies.

(The data on this is not even slightly ambiguous, read “The Spirit Level” to see it nailed in place in tedious but apparently necessary detail.)

If this economy is what the “high performers” produce, I’ll go back to one run by the mediocre people, thanks.

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 Unemployment Rate Isn’t Used to Keep Unemployment Low (with Graph)

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On April 13, 2018

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Years ago, I complained to my friend Stirling Newberry that the unemployment rate didn’t seem to track how good the economy felt, or how many people were in desperate need of employment.

The unemployment rate was, then, and is now, taken as a proxy for the health of the economy for ordinary people. However, I could see and feel that the economy was getting worse for ordinary people, and that fact was showing up in other statistics. Plus, unemployment rates that were considered a crisis when I was young in the 70s, were now considered acceptable.

(See: The Economy Has Not Recovered, With Graphs)

Stirling said, “You need to know who an economic statistic is designed for, and what they use it for.”

A little history is necessary here, about inflation. In the 70s, due to the oil crisis and other mishandled economic problems, inflation got out of control in the West. Very high interest rates were used to bring it down, by Chairman Volcker at the Fed. Western policy makers became obsessed with inflation. It was considered Enemy Number One. They decided that the worst cause of inflation was wage increases and called this “wage push inflation.”

To track this, they turned to a statistic called the non-accelerating inflation rate of unemployment (NAIRU). NAIRU was the rate below which the unemployment rate was assumed to cause inflation.

The unemployment figure measures the number of people actively looking for jobs, compared to those who have jobs, remember. Thus it measures the active demand, in the market, for a job. Therefore, theoretically, if there are too few people looking for jobs, employers are expected to have to raise wages to attract workers.

(This is, to be clear, when wages rise the most, which is something non-economists and non-oligarchs want to happen.)

If you are old enough, you will remember that during the 80s and 90s, and even into the 00s, when the unemployment rate would drop, the stock market would take losses. This is because stock investors expected the Federal Reserve to raise interest rates, which is bad for the economy and bad for stocks.

So, the unemployment rate from late 70s and on, has been used to determine if wages should cause inflation, and to then raise interest rates to make sure they don’t.

Not incidentally, the result is also to crush wages, because, essentially, wages that improve are nothing more than wages that increase faster than non-wage inflation.

The unemployment rate not only doesn’t measure how good the economy feels for ordinary people, it was actually used, with purposeful action, to crush wages.

You’ve all been waiting patiently for your pretty graph, so here it is.

NAIRU vs Unemployment vs Fed Funds

NAIRU (Civilian Unemployment Rate) vs Unemployment (Natural Rate of Unemployment) vs Effective Federal Funds Rate

You’ll notice that while effective federal funds rates (the green line) increase during low unemployment periods (the red line) before Volcker, it is after Volcker that they correlate strongly to whether the unemployment rate is approaching or below NAIRU. Before Volcker, the unemployment rate is often below NAIRU and people get a lot of raises.

Note, in particular, and with amusement, that the flat, blue line rate (the natural rate of unemployment) in recent years shows a period where unemployment has stayed above NAIRU. Note that Yellen started talking about increasing rates as the unemployment rate came closer to NAIRU.

Your wages were crushed, deliberately, supposedly to crush wage inflation.

And this is why unemployment doesn’t have very much to do with how the economy feels for ordinary people, especially not now (it effects how the economy feels some, but not much). Unemployment has to get below NAIRU and stay there for you to get real wages.

I will point out, for completeness, that the idea that wages are the most important source of inflation is questionable, but I’ll deal with that at a later date.

(Read: A More Detailed Look at the End of the Post-war Liberal Era)

Originally published Feb 17, 2006. Back to the top because it is an actually important post. We just recently had another case of the stock market declining due to low unemployment rate figures. This is why.

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.

Slavery, Amazon Version

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On February 2, 2018

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Because Hell (a.k.a. working at an Amazon warehouse (and plenty other places)) is about to get worse. Amazon has patented wristbands which track where your hand is at all times AND can nudge you.

Amazon already tracks warehouse workers by the second, with supervisors watching their location.

This is hell. Absolute hell. It extends assembly line horror to a vast range of other jobs, allows a smaller number of supervisors (and soon AI) to watch them, and control them like flesh-robots.

Revolution is the only sane response to the extension of such technologies. And quite probably, revolution French-style.

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.

Sears Canada Steals Pensions

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On January 20, 2018

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So, Sears Canada went bankrupt. Their pension fund is underfunded. Pensioners will be screwed. As usual, before going bankrupt Sears paid large dividends and bonuses to its executives, but somehow didn’t have the money for its pensions.

This isn’t, but should be, illegal. Apologists may claim that if it’s legal, it’s not theft, but justice is not law, and fools who think it is should remember that everything the Nazis did was legal when they did it, as my friend Stirling Newberry often pointed out.

A society which regards its ordinary members as sheep to be culled for the benefit of its elites is an unjust society, and those who engage in such activities towards those ends are villains. Odds are, sadly, good that they will get away with it, but every once in a while, such offenses end in guillotines or bullets.

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.

Money Is Power and Billionaires Can Subvert Democracy

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On November 27, 2017

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Money is the ability to tell other people how to spend their time: what to make, what to do. It is that simple.

The Washington Post has a story about how the Gates Foundation pushed the Common Core curriculum. The details are there, but the bottom line is that once they decided to do it, it happened fast:

The result was astounding: Within just two years of the 2008 Seattle meeting, 45 states and the District of Columbia had fully adopted the Common Core State Standards.

This wasn’t done “democratically,” it was done with money, which bought officials.

The biggest problem with vast wealth isn’t that it directly makes other people poor, it is that it makes rich people disproportionately powerful. They have so much money that they can buy the state.

When they do so, they usually do so in their self-interest. Sometimes, as with the Gates’s in this case, they do so out of a desire to good.

But their idea of good may not be the same other people’s idea of good. They have vastly more weight than ordinary people, and in an unequal society, they can buy people.

It is that simple.

One way vast inequality corrupts is that it makes some people powerful enough to overthrow democracy; in general (as with Citizen’s United), and in particular cases.

Most rich people are not good people. It is well established now, in the academic literature, that rich people have an empathy deficit, that they give less as a percentage of their wealth and income, and that (to put it unscientifically) they tend to become assholes. They don’t need to care what other people think, or about others’ welfare.

And even when they do try to do good, well, they don’t need to go through normal democratic processes; they just buy the results.

Nor are they effective. There is a weird myth that “the private sector” is why solar power is cheap now. That’s effectively a lie. Solar power is cheap now because countries subsidized the markets for years (Germany in particular), and because China pushed it as a policy as well.

The Internet exists because of the public sector. Also, for decades, the US government bought the vast majority of all low-to-high-end computers. If they had not, you would not have cheap, modern electronics. Anyone who says otherwise is either a liar or doesn’t know the actual history.

Money is power. When the government relies on rich individuals and corporations to do what should be done by government, it takes longer and produces less welfare than it should, and it leads to the capture of the government by the rich.

A 90 percent top marginal tax rate and punitive capital and estate taxes aren’t necessary because “government needs the money,” they are necessary so that the rich don’t become so rich they buy the State.

And that includes the ones who try to do some good, like Gates.

(More on rich states vs. rich individuals soon.)

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.

DOJ Suing to Stop the AT&T/Time Warner Merger

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On November 21, 2017

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Perhaps Trump is doing this for petty reasons, but this is a good thing. Media is absurdly over-concentrated already, and should not be more so.

The only thing that would better would be a law straight up forbidding media companies to grow beyond a certain size, and forcefully breaking the firms back down to that size.

Of course, Trump’s administration doesn’t want that. The FCC is removing restrictions on ownership controls in local markets, for example.

Nonetheless, this is a good news, and we can hope that in time it will be seen to be the start of a new wave of anti-trust cases and law. The US, and the world, needs few things more desperately.

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