Category: Class Warfare Page 4 of 36

On January 23, 2023

Back in the early 2000s I remember reading an interview with Ted Turner, who founded CNN and later sold it. He wasn’t happy with how it was being run so the reporter asked him why he didn’t buy it back.

He explained that he had only a few billion dollars, which meant he wasn’t “in the game” anymore. People mocked him for it, since to a normal person that’s more money than they could ever use, but he was right. He had sold, and now he couldn’t re-buy; prices for key assets like CNN had gone up.

This the basic issue the real players, the mega-rich and the CEOs who run the big companies face. The amount of money that was enough last year isn’t enough this year, let alone in five years. Fall behind and soon you’re out of the game. This doesn’t have to be personal money, just money you control, so if you have effective management control of a company you don’t have ownership control of, you’re in the game, though such people generally reward themselves massively, so they at least aren’t embarassed in front of their peers.

Different oligarchs are competing against each other and so are different groups: tech, finance, manufacturing, military-industrial, etc… If one gets enough of an advantage, then they buy out the others, and even if you’re still filthy rich, you’re out of the game and nowhere near as powerful as those still in the game.

As everyone knows now, the rich have been taking more and more of pie. The most famous chart is the labor productivity vs. wages one:

Furthermore, the real players have been narrowing: there are fewer and fewer people who are really in the game. Vast waves of consolidation in almost every industry have created oligopolies and monopolies, because those sorts of businesses can squeeze customers. Some games are easier to squeeze than others: healthcare is a famous example as people will pay almost anything to live. There’s a reason Bill Gates is buying up all the farmland he can get, too, with environmental disaster onrushing, he knows that those who control food will (with enough political cover) also clean up.

But at the end of the day, everyone is taking from the same pool: any increase in wealth that doesn’t come from productivity increases has to come from someone else. The rich do take from each other, though they play by the rule that unless you’ve betrayed other elites you get to stay wealthy, but most of what they take still has to come from the masses.

Unfortunately they’ve been squeezing the masses for 40 to 50 years, maybe a little more. So they have to keep finding new places to squeeze. This is why power has been privatized and de-regulated; why water and sewage is privatized in the UK (and sewage is in the rivers again), and so on.

But in those countries with public health systems (aka. not the US) like Canada and the UK, well, that’s a place where the full squeeze hasn’t been put on. Prices can easily be raised, by moving to the profit maximizing price (insulin at $800, like in the US, and so on), though it means a lot of people will suffer and die.

There’s one last big public heifer to be taken down and consumed, in other words. And if you don’t get in on it, well, your rivals will and they’ll be richer than you, and you stand a good chance of being forced out of the game.

So, with a few exceptions (manufacturing used to be one of them), the elite consensus is to privatize health care. It’s a big cow, sitting there waiting to be chopped up, and if you get a big enough chunk you may be able to buy out some rivals or at least stay in the game.

And in some cases it’s pretty much the last one. In the UK, it’s the only thing of worth the government owns which it hasn’t privatized. So, as everyone understands by now, you deliberately underfund and sabotage it, then call in the private sector because it isn’t working well. The same thing is happening in multiple Canadian provinces, including where I live in Ontario.

And the real players will become fewer and fewer, and if it means that you die or suffer, well, that’s a price the players are willing to pay so they can stay in the game.

As the game narrows, the players will also turn even more on each other. This has already happened with the TransAtlantic elite, who used to more or less cooperate: the US is now feasting on Europe. But then the Germans had been feeding on much of the rest of Europe already. And it’s obvious that Chinese and US elites are moving to a confrontation, and this is driven in great part by the refusal of the CCP to allow anything important in their economy to be controlled by foreigners.

Sadly, there is a real economy, and it is being fantastically mismanaged, not least by allowing the real carrying capacity of the world to collapse. Elites had such a huge pie (to change metaphors) that it usually made more sense to fight over it than to cooperate to grow it more. So we’re at the beginning stages of collapse. There will come a time when the pie starts to shrink in ways no one can deny.

The silver lining, such as it is, is that so much will have been privatized and screwed up that when we finally do get serious about change, assuming we avoid a Dark Age (not a sure thing) we will be able to do things differently, since there will be so little legacy left.

It’s not much of a silver lining, but destruction does make change possible.

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Imagine A World Where Violence Or Need Are Impossible

On December 16, 2022

There are two main types of coercion in the world.

The first is violence. If you don’t do what someone else wants, they will do something physical to you.

So, imagine if that was impossible. Imagine that if you chose no physical object could affect you. Bullets don’t work, fists don’t work, no one can grab you or put you in handcuffs, and that’s true of everyone.

What would change about society if this were true? What would change about how individuals act?

The second is need. What if you didn’t need to eat or drink and you cold and heat didn’t bother you or harm you and you didn’t get sick? You might still want shelter or a home or objects like books or computers, and objects like cosmetics would exist, but not medicine. But you would need nothing.

(This is half the conception of a pagan God: they can be harmed, even killed, but they don’t need anything. Except they can also, usually, create what they need without other Gods or people.)

Banquet of the Gods by Jacques de Gheyn II

What would you be like, and what would the world be like if you; if people, didn’t need anything?

These are serious questions. Think about them.

Now, question 3 is what if both of these things were true?

These questions matter because they tell you what you put up with because of need and fear. They tell you what other people; what society does that it couldn’t do if people weren’t, in effect, vulnerable.

(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating. Alas, I’m neither God nor Beast.)

It’s also important to do them separately. The first is about violence, in effect, and that’s not the same as the human need for cooperation, which is much (but not all) of what the second question is about.

This is what what Donne was getting at with “no man is an island.” It is also what is related to Aristotle’s observation “But he who is unable to live in society, or who has no need because he is sufficient for himself, must be either a beast or a god…”

There are things I want to say about these questions, but I’m not going to do so in this article. Instead I want you to think about them. Think about them in general and in particular: think about what you would and wouldn’t do in these three cases.

US House Passes Bill Forcing Railway Workers Not to Strike

On November 30, 2022

The bill makes them take a deal they had rejected before. Of particular note is that the bill gives them one sick day a year. Democrats voting against were:

Update: as expected, the Senate did not pass increased sick days. The House broke it out to say that they had included it, while making sure it wouldn’t be passed and the blame would be on the Senate. BUT if the main bill had included 7 days, it might have passed, since if the Senate voted it down, a strike would still be legally possible.

Chu-CA, DeSaulnier-CA, Golden-ME, Norcross-NJ, Peltola-AK, Pocan-WI, Tlaib-MI & Torres-CA.

I note that AOC did not vote against it. I was initially hopeful, but I think it’s now undeniable that she’s performatively left-wing only; she cannot be counted on.

The House then passed a separate bill which would give the railway workers seven sick days and Democratic defenders are claiming this makes it all good.

But if the House had the votes to pass the second bill, they could have included it in the initial bill. It was clearly done so that the union was forced to send their members back to work: They are sure the “force back” bill will pass the Senate, but not if it includes sick days, but want to say they voted for sick days.

Recently in Ontario, the government passed a bill which forbade education workers (non-teachers) to strike. It included a $4k fine a day for each striker, and $50k a day for the union. The union struck anyway; other unions stated they would strike as well, and the bill was rescinded.

In the US, general strikes are illegal, made so in the 50s by Taft-Hartley (which also made it so that supervisors can’t join unions — a huge problem).

If a law is unjust, you must break the law. To be successful, you must do it en-masse. I know it won’t happen soon, but US unions need to buckle down and do a wide strike, with the goal of repealing Taft-Hartley and making “back to work” bills illegal. Without that, the right to join unions and their right to call strikes means little.

I do see some hope. I wasn’t sure if Ontario unions would have the guts to do the right thing, but they saw an existential threat, and they acted with solidarity. In the US, the ongoing Amazon and Starbucks unionization efforts are very hopeful because the people doing it are tough — in the face of repeated firings and closures they have simply continued.

People’s backs are to the wall. Since about 1980, the predominant policy in the US has been to immiserate workers, especially wage workers. This was possible because the New Deal and post-war eras had made workers well enough off that they had some surplus which could then be stolen from them.

But now a lot of people are up against the wall. Many full-time workers, especially at places like Amazon, live in their cars or tents, for example. There is nothing left to give.

People with nothing to lose are dangerous.

One of the reasons, I think, that the Ontario government lost is that they chose the wrong union to intimidate. Custodial staff and low-ranked clerical workers don’t have anything: 4K a day isn’t so frightening to them. Most of them don’t have homes or any real assets. If they’d tried this tactic with the teachers, who do still have fat and meat to trim off the bones, the teachers might have been too scared.

The custodial staff? No. They didn’t even hesitate.

Backs to the wall. If the US labor movement wishes to survive and become strong again, they need to recognize how bad a shape they, and most of those they represent, are in.

The Inflationary Consequences of Friendzoning and Decoupling

On October 24, 2022

During the rise of China and the “One World/Free Trade” period, one good thing which can be said for offshoring is that it helped reduce inflation.

It, indeed, drove much of the inflation reduction, with most of the rest of the inflation reduction being concerted efforts to keep wages low, with a strong assist from the Bureau of Labor Statistics to use methods like hedonics to pretend that inflation was lower than it actually was.

The new mantra is “friendzoning” — not so much bringing industry back to the US but moving it to friendly countries. Vietnam and Bangladesh are mentioned often, and Mexico will benefit as well. But friendzoning has limits, these countries don’t have the capacity to quickly take on all the production done for the US and Europe, nor do they really have the technological ability in the medium run.

This means that the determination to have a new cold war, and possibly a hot war with China will drive inflation higher for years to come.

The solution would be to, more than friendzone, re-shore: bring production back to core nations. But that would require reducing the cost structure: and I don’t mean wages so much as I do predatory finance and driving rent and housing prices down massively — about two-thirds at a minimum, along with no longer health-care predation. Do those things and wages don’t have to rise nearly as much, and the US (and Europe to a lesser extent) become much more competitive.

But to re-shore, you have to, in effect, give ordinary people a decent deal and not treat them as assets to shorn, but rather as productive assets to be cared for. (Note you don’t have to do this out of the goodness of your heart, our elites don’t have any of that.)

For the time being, this seems unlikely, so don’t expect inflation to go away. All the Federal Reserve can really do to stop it is push the economy into the dirt, but that’s not going to be a long term solution unless it stabilizes at “you’re a third world nation”, which, actually, probably won’t solve it either.

Most Zero Sum Games Are Negative Sum & So Are Most Positive-Sum Games

On August 24, 2022

In economics there’s the idea of how much a “game” nets, where a game is any economic activity. The ideal is to have positive sum games, where more good comes from the game than bad, and ideally all players of the game win. A classic zero-sum game is if you and I bet $10 on a coin flip: any win is precisely mirrored by loss. And a negative sum game is where people come out worse: a lot of wars are like this, no matter how much plunder, both sides are worse off at the end.

Just because a game is negative sum doesn’t mean it can’t be positive sum for a few people. War, again, is often like this. Masses of people may be killed, huge amounts of wealth destroyed and certain war profiteers may come out much richer and some politicians or generals much more powerful. Some soldiers may loot enough that war was better for them than peace.

The fundamental environmental critique of capitalism and industrialization is that it only looks like a positive sum game: that the damage we are doing to the environment (which includes climate change, but not just that) and to our health, makes it a negative sum game if one uses the proper time horizon (aka. if you won’t die before the bill becomes due) or if you include everyone (aka. being conquered by Britain was not good for Indians; being conquered mostly Europeans was not good for native North Americans, almost all of whom died) and capitalism has not been a marvel for most of the third world. Which is why, by the way, there are all those “best time to be alive ever” books which try to use dubious extreme poverty statistics to claim this is the closest we’ve ever gotten to utopia: they want to argue that capitalism and industrialization are positive sum games, at least for now.

These folks have no real argument against climate change and environmental collapse and tend to hand wave it with “technology will fix it” as if technology can un-extinct half the world’s species.

So in the big picture we’ve been playing a negative sum game for a long time. The destruction of the native civilizations of North America was a negative sum game. The impoverishment of India under the British East India company was a negative sum game (India started out with more industry than England, by a fairly wide margin.) Africa’s exploitation, from the slave trade to colonization was a negative sum game, which is not to deny they didn’t get some railroads and whatnot out of it. (The Belgians were the worst, but the French who are still making African nations pay them for having been conquered are mighty bad. England’s evils are well known.)

But we’re in a lot of local negative sum games. Wall Street types like to brag they “eat what they kill” and it’s accurate in all sorts of way. The entire run-up to 2008 was negative-sum: that’s why it took trillions to bail them out. All their profits came from creating much larger losses than their profits, then having other people pay them off and suffer a long light depression. And Central banks didn’t then go on to print trillions more because value was being produced after 2008, they had to print to keep covering the fact that real economic value was being destroyed.

Your average Wall Street executive is a sort of super-optimized human locust, getting fat by destroying real value. Private Equity as a whole is so clearly massively negative sum that if you try to deny it you live so far in a fantasy world there’s no point in talking. The entire neoliberal movement, with its poster-child policy of austerity was and is about damaging the real economy to make a small number of people richer.

A lot like those war profiteers we discussed earlier: they cause widespread misery, illness and death but they get very rich doing so.

(The military industrial complex is obviously negative sum, which, again, doesn’t mean it doesn’t benefit some people.)

The job of governments is to create positive sum games and to stop negative sum games. In some ways that’s almost their only legitimate function. (Any crime system with high recidivism, or large numbers incarcerated is negative sum, by the way, but boy, a lot of people get rich locking other people up.)

A society with a lot of negative sum games running can be compared to an animal with a lot of ticks attached, a tapeworm, and some nasty diseases. It’s supporting a lot of parasites, but one day it falls over dead after a great deal of suffering, and then the parasite have to try to find a new host. If they can’t, because they’ve infected the entire herd (or destroyed the grazing land), well, then they too die.

Welcome to the fin de siecle of capitalist society.

Refreshing Honesty About Bank Loans & Environmental Destruction

On May 23, 2022

I actually appreciate this, from the HSBC AM Global Head of Responsible Investing, Stuart Kirk:

“At a big bank like ours, what do people think the average loan length is?” he asked. “It is six years. What happens to the planet in year seven is actually irrelevant to our loan book. For coal, what happens in year seven is actually irrelevant.”

That’s honesty. People in the financial industry are trained to follow the incentives. Their bonuses (most of their income for seniors) are based on financial results and internal power in the company. The more they make, the more they can give themselves.

To expect people whose entire careers are based on following financial incentives to not follow financial incentives is insane. While I’m generally down on incentives for control of behaviour, these are folks who are hyper-optimized for them. They don’t know any other way to operate, and if individuals were to try they would be replaced by people who do follow them.

This is why I’m a radical: I believe we need change from the roots. You can’t get a man or woman trained like Kirk to act any other way than he is acting.

Oh sure, you can try and change the incentives, and you should, but better is to create a system; a society, where financial return isn’t the most important thing. If it isn’t environmentally appropriate there should be a hard stop, an absolute ban. It should be unthinkable and anyone who does it should never be allowed to have any power ever again.

A capitalist system can’t do this. It simply cannot. It cannot “think” far enough ahead, because people are mortal, and they figure they can avoid the damage. In the run up to 2008 there was a saying on wall street, IBG, YBG—”I’ll be gone, you’ll be gone.” In other words “we’ll both get the rewards and we won’t be here when the shit hits the fan.” (And if we are, well, we’ll still keep most of the money we made with this shitty fraudulent deal.)

Kirk’s a product of very close to a pure Skinner-box environment, trained to obey his conditioning till there’s little left but that conditioning. Oh, he has rationalizations, you can and should read them, but at the end of the day, he’s following the rewards.

People tend to do the right thing if they are mostly disinterested better than if you’re manipulating them with rewards and punishments. We don’t believe that, because we’re all warped. The warping started in school with grades, or perhaps with our parents and it continues till many of us know no other way of living.

But if we continue like this, we’ll burn the planet down. Oh, humanity will probably survive, but at the end, we’ll have genocided half the species on earth and reduced Earth’s carrying capacity massively. There’ll be less good agricultural land, few rivers with less water, most aquifers will be drained and poisoned, and large parts of the world where humans live now will be effectively uninhabitable for months every year.

That’s insanity, but it happens after six years and hey, if you’ve made enough money, you figure you and your kids will be able to live in one of the remaining good places.

The Fed Wants To Crush Wages So Corporations Can Price Gouge

On May 13, 2022

What does the Fed think should be done about inflation?

There are multiple sources of inflation. As a friend once said, one man’s inflation, is another man’s pricing power.

Right now we have a situation where inflation is caused by (non exhaustively):

Disruptions to the supply chain.
Lots of dead and disabled workers (over a million dead in the US, who knows how many disabled) leading to a tight labor market in some countries.
Sanctions on Russia (food, fuel, minerals, which feeds into other things, plus disruption of the dollar hegemony system.)
Massive price increases by corporations above their costs, to increase their profits.

I’ve seen estimates of about 50% for corporations simply increasing prices because they can, even though their costs haven’t risen that high.

Chair Powell keeps mentioning the relationship between the high level of job openings and wage/price inflation,” Nicholas Colas, co-founder of DataTrek, wrote in a newsletter on Tuesday. “He’s not talking to investors. He’s talking to corporate America, and his goal is to have companies essentially institute a hiring freeze and end the cycle of paying up for new hires.”…

…“The Fed’s goal is to convince corporate America to enact a short-term hiring freeze, and it will keep raising rates and talking about aggressive monetary policy until that happens,” Colas wrote. “Lower stock prices are his way of convincing C-suites and boards to do that.”

“Chair Powell mentioned the ratio several times at last Wednesday’s press conference,” said Colas, who said job postings need to drop from 11.5 million to around 8 million to get to normalcy.

The only way to get there would be some sort of freeze from companies.

Since 1979 the only type of inflation pressure either the Federal Reserve or legislatures have been willing to recognize is wage-push inflation. (See HERE for a long explanation of how the Federal reserve crushed wages with wage push inflation measures.)

This is why, for going on 43 years now, workers wages have not kept up with GDP, most people can’t afford to buy a house, rent is thru the roof, and people die due to medical care costs.

But the way to deal with companies increasing prices faster than their costs isn’t to stop employers from hiring, it’s to institute an excess-profits tax, where companies that are making a lot more than they did before the pandemic simply have it taxed away. Granted, that would take legislative action, but the Fed isn’t even calling for it, and the Fed has a powerful bully pulpit.

You could also aggressively act on anti-trust concerns and break companies up so that they have competition: they can raise prices in large part because they are unregulated oligopolies who raise prices in lockstep.

Those are legislative actions, but the Fed is the main regulator of banks and brokerages and could stop loans from being given to firms buying up the housing and rental supply and jacking up prices. It could encourage the government entities which guarantee housing loans to put conditions which disallow rent increases beyond a few percentage points, and not allow large numbers of homes to be owned by corporations.

There are certainly other steps which could be taken, but the point is that the Fed isn’t pushing anything but “don’t hire and don’t give raises”.

In tight labor markets wages should rise. That’s good. If every time there is a tight labor market you squeal about inflation then hammer the economy into the ground to kill wages, of course people’s wages will fall behind, and if that’s substantially the only thing you ever do to deal with inflation for over 40 years, of course wages will be hammered.

If, at the same time you run policies which cause massive inflation in housing, rent, and medical care (and now food), well then, ordinary people will be screwed because those are things they must have, no matter the cost, so if they can pay they have to.

What the Fed is doing, in other words, is class warfare, the same as everything of significance it has done since 1979. People will die because of this and become homeless.

As for Congress, well, increasing taxes on corporations is unthinkable to them, so I guess people dying and becoming homeless and so on is their preferred outcome.

Might want to go demonstrate at the houses of key Congress members and Fed Reserve members too.

And remember, much of why the labor market is tight is because they let a million people die and probably millions be disabled by not handling Covid, It was noted near the beginning that the Black Death caused an increase in wages and that Covid might do the same.

It has. Now, on top of letting you die, they want you to not get wage increases, so that corporations can make huge profits and the rich can get even richer.