Avon Lon writes:
A friend recently tweeted that anyone who drives a car without satellite radio is “poor.”
Satellite radio sucks. Using spotify unlimited through your phone is much much better.
Commenter Jim writes:
Unfortunately economic and technological progress cannot supply people with what is most important to them – social status. It doesn’t matter if economic and technological advances supply everybody with a golden bathtub. Nobody will be any happier, they will just envy the fortunate few with platinum bathtubs.
If we get to the point where everybody can have a platinum bathtub then something else will become the marker of social status.
This is true.
So on the one hand, people can say that there will always be scarcity because there will always be something highly desired that not everyone can afford to have, such as a platinum bathtub. But on the other hand, it’s IMPOSSIBLE to get out of this through economic or technological advances, yet our politicians and economists act as if people would be happier if only we could manufacture more stuff and have more economic activity.
In April, there was a third shooting this year in Manhattan Valley (the area of the upper west side that’s east of Broadway between 96th and 110th streets), which is more shootings than in all of 2014.
Has the end of stop-and-frisk policing emboldened the criminal element to carry guns?
At the same time, people are being mugged in Central Park much more frequently than in the recent past.
Is this a hint that the law and order created by twenty years of conservative mayors (Guiliani and Bloomberg) is coming to an end?
A commenter said that the financial crisis was not the fault of banks because of government mandates. “Any policy that has a negative impact on minorities is forbidden by the government, forcing banks to find ways to make more loans to people who are probably not going to be able to make the payments.”
While I disagree with the policy, stupid government regulations do NOT prevent companies from operating profitably, because every other company has to deal with the same regulations and costs get passed along to consumers. It’s part of the value transference economy.
In the case of mortgage lending, if a bank makes 100 loans to white borrowers with an expected profit of $1 million, and 20 loans to black borrowers with an expected loss of $200,000, then the loans to the blacks are a cost of doing business. If, in order to continue to make loans, the bank determined that the expected profit was too low to justify the risks, they should have stopped lending. Instead, banks acted irresponsibly, in favor of short-term paper profits instead of long-run financial stability.
The situation for banks is similar to the 80/20 affordable housing rules in New York City. For every eighty condos developers build for rich people, they are required to build 20 money-losing apartments for poor or middle-class people. I disagree with the policy, but it doesn’t prevent developers from making lots of money because they just charge more for the 80 “market-rate” units.
It’s not as if business leaders are pushing government for more socially conservative policies. Just the opposite. They don’t care, because they pass along the costs to consumers. Business leaders seem to love big liberal government, as long as it comes with low taxes.
Businesses hate only two things: 1) competition; and 2) paying taxes. They don’t care much about regulations, and even favor them if they think that they limit competition by increasing barriers to entry.
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Regulations are also “good” because they create make-work for people, and the prevailing political and economic philosophy is that everyone should have a job where they work 40 hours per week. If, through reduction of stupid regulations, the economy were made so efficient that half of the jobs disappeared, how would people earn enough money to live without transfer payments from the government?
This suggest, which I made a short while back, angered a lot of readers who lack the imagination to ponder a better way of doing things or who have been brainwashed by libertarian propaganda.
There are many aspects of financial services which could be socialized for the benefit of the public. I think that a government-run bank could even make lending decisions. Private banks have demonstrated poor judgment in this area, leading to the credit crisis of 2008. I don’t see why a credit analyst employed by a government bank is suddenly going to become worse at his job than the same credit analyst working at a private bank.
But there are some other specific areas of financial services where private companies are ripping us off.
Cashless payments: Why should American Express get 3.5% of every credit card transaction? This is surely something the government could do profitably with only a 0.5% fee. Simultaneously, they should pass a law which requires any processing fee higher than 0.5% to be passed along to the consumer. Then if American Express wants to compete against the government payment processor by charging less than 0.5%, they’d be fee to do so.
Investment banking: The government can create a website where issues of securities can get hooked up with investors. No need for an outrageous 7% fee going to investment bankers.
Consumer credit: Consumer credit is generally a way that rich people rip off poor proles whose future time orientation is too low to realize that borrowing money to pay for an expensive car or vacation is in the long run a really bad deal. The government should put a stop to this.
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So does my view of consumer credit mean that I am advocating for a nanny state? The answer is that HBD teaches us that the average American is a lot less intelligent and has a lot less future-time orientation than the average reader of this blog, and neither of these attributes have magically increased because of greedy businesses trying to rip them off. Ultimately, we could improve society if people with a genetic tendency towards low IQ and low-future-time orientation had fewer children.
There has been a failure of the smart rich people running our corporations to have any sense of trying to help proles by improving their future-time-orientation. Instead, they just try to rip them off and brainwash them into mindless consumerism. They completely lack what the French called noblesse oblige.
Los Angeles has jumped aboard the $15 minimum wage bandwagon. I think this is a wonderful experiment in economics. Conservative types predict that this will cause massive unemployment. I predict that nothing much will happen because the demand for labor is extremely inelastic.
In the past, value was created by human labor. For example, it took a lot of human labor to plant crops, care for them, and then harvest them. If the farmer wanted other stuff besides crops, such as a new pair of shoes, he would trade some of his crop with a cobbler who spends all of is day creating value by making and repairing shoes.
And then, the story goes, bartering made these transactions difficult, because what if the cobbler wanted apples, but the apple farmer didn’t want any shoes? Thus currency was invented. The farmer would accept currency for his crop, because he knows he can use the currency to buy anything he wants.
Fast forward to the post-scarcity economy. Robots are doing the farming and robots are making the shoes, and they are doing these tasks a lot better and faster than humans could do them. If there’s an unlimited supply of food and shoes (or at least more than enough to go around) created by tireless unpaid robots, why should the farmer and the cobbler have to do any work to be entitled to a share of that bounty?
However, the concept of post-scarcity is hard for our human brains to understand on an emotional level, because we evolved in an environment of extreme scarcity, where people would die from starvation if they didn’t do real work to create value, and sometimes that wasn’t even enough if there was a drought or some other calamity. We are unable to imagine an economy where people don’t have to work. As the commenter “JS” pointed out today, politicians only talk about “creating jobs” and never about how people might be entitled to some of the country’s production without having to work at a job.
The purpose of work has shifted from creating value that’s needed to live, to either a pursuit of status (by making lots of money or being the boss) or a pursuit of self-actualization (which, cynically, may be nothing more than a belief by the higher classes that not working is a lower-class thing). And then at the bottom of the social ladder, we have people who don’t work, because they have nothing to offer the world besides manual labor which has been mostly replaced by technology, and we give them free government benefits despite the belief that “able-bodied” people are supposed to have jobs, because we don’t think anyone should starve to death, especially not children of poor mothers.
I had a summer internship at the Queens DA’s office in 1993, and it felt like visiting the world of Bonfire of the Vanities. The typical ADA was a schlumpy middle-aged male. The f-word was used a lot. Everyone had a potbelly. The higher up in the organization, the bigger the man’s stomach. Richard Brown, the DA, had a massively huge stomach.
The lawyers I saw wandering the hallways of the Manhattan criminal court building were much more SWPL looking and a lot thinner. In my particular voir dire, the judge was a big-stomach guy, but the other attorneys didn’t have that look. The defense attorney was old and schlumpy, but thin. The ADAs were young, the male ADA looked like he was in a fraternity, and the female ADA wouldn’t look out of place at any gathering of young SWPLs.
There’s an Atlantic Article about the idea of a basic income. The article is noteworthy not for anything it says, but for the fact that the idea is getting some promotion in a mainstream magazine.
“slithy toves” provided a link to a NY Post article about Chelsea Clinton which makes Chelsea seem to be a spoiled brat who is so used to people sucking up to her that she just thinks it’s the Natural Order.
This also demonstrates how a family-created foundation gives your children something to do besides staying home and watching TV. Another example of how only the rich can afford to work.