The Op Ed Thread
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26-02-2016, 07:18 AM
The Op Ed Thread
Every now and then I run into an op ed (opinion of the editor) piece that resonates with me. Sometimes from mainstream sources, other times from obscure blogs.

Perhaps a thread of thought-provoking commentary from the literary world can be shared here. I’ll start with my next post.

Have at it.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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26-02-2016, 07:25 AM (This post was last modified: 26-02-2016 07:31 AM by Full Circle.)
RE: The Op Ed Thread
(Bolding mine)

Abundance
Posted February 25, 2016 by Joshua M Brown

The only way to save the economy is to crash it.

There’s too much of everything and it’s not good for anyone. It’s hurting everyone. Paradoxically, abundance is now the enemy. This sets us apart from virtually every other society throughout history.

You can blame the Federal Reserve’s loose money policies if you’d like. There is over-investment in every industry. It’s killing confidence. Nothing is worth what it used to be. We haven’t adjusted to this reality yet.

Unlimited music, nine dollars a month.
Unlimited movies and TV shows, thirteen dollars a month.
Unlimited news and journalism, zero dollars a month.
Facebook is free. Twitter is free. Snapchat is free. Instagram is free. Youtube is free. Video game apps are free. Texting is free. Sexting is free. Skyping is free. Chatting is free. Why would you spend money on anything? Where do you think people spend their time now? Endless entertainment and content, for almost nothing.

Oil costs almost nothing too. We have so much there’s no where to even store it. Natural gas supplies are overflowing, they’re burning it off at the wellhead. Coal demand is going extinct. Copper prices, iron ore prices – it’s going bidless. No one wants it, they keep producing more regardless. Why? “I don’t know, it’s what we do.”

Portfolios are free. “Give us a billion dollars, we’ll lose money on the cost of managing it for you.” Online asset management firms are spending $600 to acquire a customer that will pay them $60. Their financial backers love it. “It’s user growth!”

What’s the business model? “We go public or get bought out by someone with the opposite problem – too much profit, not enough user growth.” The business model is an exit for the investors. “BlackRock will eat it. They’ll eat anything.” No one cares how many actual business models get wrecked in the process. How many useful jobs are lost in the process. The new fixed income or currency trader on Wall Street will never need health care, or take a vacation or grab a female co-worker’s ass. It’s a chip on a server. Much cheaper to employ, much easier to manage.

Automate everything, outsource the rest – it’s cheaper for the customers. “But now there are no customers left, no one has the money to be a customer anymore.”

Congrats on your efficiency.
Start up
Cash in
Sell out
Bro down

“Let’s take a product or service that people used to charge for, make a worse version and give it away for free!” Why would we do that? “Bro down.”
Clay Christensen’s book on disruption, ‘The Innovator’s Dilemma’, has been twisted into an entirely different book. It was once the Bible, now it’s the Necronomicon – the book of the dead.

Even money is free. The people and firms with the least need to borrow it can borrow it with abandon. Apple can have as much money as it wants, virtually free. They have no idea what to do with it. The US and German and Japanese governments can borrow for free. Then what? There is nowhere to put the money and no will to risk using it for the future. The electorate is old. They don’t care about the future. They don’t have one, just a present. We live in their basement. We live in their extended past.

Malinvestment is everywhere. The capital markets runneth over. “Give us something with an income stream to put our money into! Even the promise of an income stream will suffice.”

Here’s the perfect business idea for this environment: Open a Hundred Dollar Bill Store. You sell hundred dollar bills for ninety dollars each. You’ll lose ten dollars per transaction but you’ll do a trillion in revenues in year one. Maybe you show an ad to everyone who walks into the store and you break even. User growth with be on the order of 1000% per month. A billion users. You’ll be the biggest IPO of all time when Goldman’s underwriters get wind of that growth rate. Go public and let someone else worry about a competitor selling hundred dollar bills for eighty-five.

When you can have anything at any time, is anything worth anything?

Here are the results: You can get a job but there’s nowhere you can afford to live that is anywhere near that job. You can create your own job but, absent access to capital markets, you can’t compete with those who have it. Plenty of hiring in New York and San Francisco. Good luck living there.

What a difference a year makes. Today is my 39th birthday. A year ago I was writing about scarcity. There is no such thing.

Today there is too much of everything and no demand for it. Abundance is wrecking the economy. Too much oil, too much gas. Too many websites and shows and streaming services and apps. Too many subcultures and verticals and genres. How can anyone be heard or seen? How can anything rise above the din?

We used to have a pop culture. The biggest song on the radio, the biggest movie in theaters, the number one show on television, the best-selling book. Now we have 50 different pop cultures. Microcultures within subcultures within cultures. There is no agreement on anything.

If you’re wondering why the fringe candidates are the mainstream candidates in this election cycle it’s because there is no mainstream. It’s because only the most extreme views can be heard across all of the cultures and platforms and verticals and genres. You have to sound like a fucking insane person. Kanye knows this. Kim taught him. Trump knows this – instinctively. “I can be anything to any group I’m speaking to.” He was born for this moment in time.

Sanders figured this out accidentally. For god’s sake he is tied with a Clinton for the Democratic party’s nomination and running on a Castro plan for the economy. His message is extreme enough to get through the noise, like Trump’s. How else can you reach the stoners, burnouts, communists, veterans, social justice warriors, union members, #blacklivesmatter, truthers, birthers, health goths, TED talkers, money guys, values voters, evangelicals, patriots, gun nuts, tweeters, tweakers, Tea Partiers, retirees, millennials, boomers and crossfitters?

We’re electing maniacs. We’re more connected than ever and it’s making everyone feel more alone. Connectivity is giving us a constituency of the like-minded. When you can find think-alikes online, there’s no reason to even have a conversation with anyone who thinks differently. We’re retreating back into our subcultures. The only consensus is that there isn’t one.

What do we do with all this everything that we have? All the abundance that’s holding us back?

I don’t have any answers other than what I began with – we need a washout. A recession would be plenty, no need for anything worse. It’s got to be flushed from the system. Bad business models that were never designed to succeed outside of raising capital to continue must not be allowed to continue. No need for legislation, the cycle will clean it up. It always does. The best thing that could happen here is for a return of the cycle. We’re in year seven of an “expansion” and no one is happy. It’s time for a contraction. It’s long overdue.

Large pools of money need to be drained so that they can no longer be a source of malinvestment on an epic scale. Some people have to suffer for the benefit of the whole. Spock told Kirk this: “Logic clearly dictates that the needs of the many outweigh the needs of the few.”

The few will be just fine, even if they have to lose a few dollars.
The many will not be fine until the current cycle turns and we wring out some of the excess.

And then we begin again. Less abundance of resources will demand more ingenuity. The system will be back on track.
The present situation cannot stand.

Start up
Cash in
Sell out
Bro down

What the hell are we selling? Time-wasters and profit-shrinkers in place of companies and industries. Schumpeter didn’t have the current version of creative destruction in mind when he coined his phrase. This is destructive destruction.
The abundance is killing us.


FC here, I may not agree with all of this but it certainly made me stop and think.
http://thereformedbroker.com/2016/02/25/abundance/

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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26-02-2016, 09:21 AM
RE: The Op Ed Thread
I think that whole article is projecting fin de siecle feel which I don't like. It somewhat remind me of belle epoque and lack of concern about war, about war deemed necessary to keep nations from stagnating. Here we see recession as something that is needed. But it is truly needed or it's another opiate that intellectuals are taking? Back then it was war needed for reinvigorating now some want recession. But what about suffering resulting from it? Is pain of the masses worth satisfaction of proclaiming new beginning?

Fringe candidates. I don't know much about Trump, but is he really fringe or he says what number of people want to say but are afraid? Maybe racism is not gone only hidden? What liberal may think nonexistent could be only hidden from view, not spoken aloud as long as no one start.

Lastly, abundance may be problem in USA or West Europe. In the East though lack is the real issue. Lack of democratic tradition, civic responsibility and even some could say work ethos.

The first revolt is against the supreme tyranny of theology, of the phantom of God. As long as we have a master in heaven, we will be slaves on earth.

Mikhail Bakunin.
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22-04-2016, 07:33 AM
RE: The Op Ed Thread
Know This First: Risk Perception Is Always Irrational.

"We feel first and think second, and most of the time we feel more and think less. It’s just how the brain works.”

http://undark.org/article/know-this-firs...ign=buffer

"But communication can never reshape everyone’s deep passions about what feels safe. Risk management policies must account for the mistakes we sometimes make, and here we can take a lesson from the way governments around the world are using behavioral economics to nudge people toward choices that maximize public and environmental health.”

FC here ~ We humans don’t always act in our own self best interest because we are hard wired (evolved) to feel first and think second. It is imperative that we recognize this and put into place safety nets to help us avoid making poor choices.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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