Monday, November 20, 2017

Our National Madness

Fakery and trickery are not solutions; they are a form of self-delusional madness that destroys the nation's ability to face reality squarely and choose real solutions, no matter how painful the choice and path might be.
The nation has lost its common sense, its soul and its sanity. Can we summarize the source of this remarkably pervasive madness?
Our efforts are now focused not on solving core problems but on covering up core problems, as if covering up problems is a substitute for solving them. Down this path lies madness, for this substitution of false narratives for reality erodes our ability to distinguish not just between reality and fantasy but our ability to distinguish between moral rights and wrongs.
The efforts of those in positions of power are now focused on obscuring the truth, marginalizing critics, blaming malevolent external forces, cloaking self-interest with virtue signaling and staking claims to victimhood. These are the five dynamics that are powering the nation's descent into madness and dysfunction.
Consider Harvey Weinstein. Evidence is now emerging that Mr. Weinstein and his army of toadies, bullies, thugs, et al. put enormous effort and resources into obscuring the truth, marginalizing critics, and cloaking self-interest with virtue signaling. Next up for Mr. Weinstein's team of apologists: blame the Russians (or an equivalently malevolent Other), and claim to be a victim of all those testifying against him.
This is the model for everyone in positions of power. The only variation is which of the five will be spewed as a first line of defense, and which will be held in reserve for the last-ditch defense against the truth becoming public.
I'm sorry if this is a shock, but the economic "recovery" is nothing but smoke and mirrors designed to obscure the pillage of the nation's wealth and income by state-protected cartels. The central bank can't actually fix what's broken in our economy, but it can manually push the needle of the stock market higher.
So rather than actually fix what's broken, the "solution" is to make the stock market the primary measure of "prosperity." In effect, the stagnation of real prosperity is a problem that would require profound (and painful to those gorging at the feeding trough) changes in the status quo; so the solution is to label the stock market "the measure of prosperity" and then shove it higher.
This substitution of trickery for reality solves nothing. It is the exact equivalent of the student who didn't study and who learned nothing erasing his F grade and forging an A in its place. Nothing has actually changed in terms of the student's knowledge or skillset, but he has fooled the authorities focusing on superficialities: incompetent, self-serving administrators who then tout the student's high grade as evidence of their own success, the media which mindlessly accepts the fake grade as evidence that all is peachy-keen in the school district, and so on down the line.
If this happens often enough, the student actually starts believing he can get away with trickery as a solution for all problems: just BS your way through any challenge, and if that fails, then marginalize one's critics, blame malevolent external forces, furiously virtue-signal, and if all else fails, stake a claim to victimhood.
In other words, the student loses touch with reality and is lost. The USA has lost touch with reality, for its leadership has embraced the notion that trickery and fakery that covers up problems is a substitute for solving problems--and if this fails to convince an increasingly jaded and cynical public, then body-slam the public with the other four tactics: marginalize critics, blame malevolent external forces, cloak self-interest with virtue signaling and stake claims to victimhood.
Unfortunately for our nation, madness is repeating what's failed and thinking it will work next time. Trickery, maligning critics, virtue signaling, blaming outside forces and claiming victimhood no longer have the desired effect on all but the most delusional (or self-serving) supporters of our profoundly corrupt leadership.
Actions have consequences. Fakery and trickery are not solutions; they are a form of self-delusional madness that destroys the nation's ability to face reality squarely and choose real solutions, no matter how painful the choice and path might be.



If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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Sunday, November 19, 2017

Want Widespread Prosperity? Radically Lower Costs

As long as this is business as usual, it's impossible to slash costs and boost widespread prosperity.
It's easy to go down the wormhole of complexity when it comes to figuring out why our economy is stagnating for the bottom 80% of households. But it's actually not that complicated: the primary driver of stagnation, decline of small business start-ups, etc. is costs are skyrocketing to the point of unaffordability.
As I have pointed out many times, history is unambiguous regarding the economic foundations of widespread prosperity: the core ingredients are:
1. Low inflation, a.k.a. stable, sound money
2. Social mobility (a meritocracy that enables achievers and entrepreneurs to climb out of impoverished beginnings)
3. Relatively free trade in products, currencies, ideas and innovations
4. A state (government) that competently manages tax collection, maintains roadways and harbors, secures borders and trade routes, etc.
Simply put, When costs are cheap and trade is abundant, prosperity is widely distributed. Once costs rise, trade declines and living standards stagnate. Poverty and unrest rise.
These foundations characterize stable economies with widely distributed prosperity across time and geography, from China's Tang Dynasty to the Roman Republic to the Byzantine Empire to 19th century Great Britain.
I have estimated the realistic cost of a conventional middle class lifestyle, and found that only the top 20% can afford a middle class lifestyle. Needless to say, this destroys the notion of being "middle."
The squeeze on households comes from both the soaring cost of big-ticket items such as childcare and healthcare and from the stagnation of wages/income.
So your new TV cost $100 less but your healthcare costs $10,000 more: the big expenses are soaring, costing households tens of thousands of dollars more while cheap TVs and clothing decline a few bucks.
Labor's share of the economy keeps stairstepping down: every boom/bubble benefits the financier and technocrat class, but labor's share of the economic "boom" flatlines for a few years and then tanks in the inevitable unwinding/recession.
The third dynamic is the dominance of anti-competitive cartels and state guilds which are no longer accountable or competent. (The two are related, of course; when accountability is lost, there's no way to identify or weed out graft and incompetence.)
This report on the causes of the decline of New York's subway system reads like a summary of the entire U.S. economy: the politicization of public services, corruption that evades the legal definition of corruption, self-enriching guilds, cartels and elites and gross incompetence enabled by zero accountability.
As long as this is business as usual, it's impossible to slash costs and boost widespread prosperity.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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Friday, November 17, 2017

The Demise of Dissent: Why the Web Is Becoming Homogenized

In other words, we'll be left with officially generated and sanctioned fake news and "approved" dissent.
We've all heard that the problem with the web is fake news, i.e. unsubstantiated or erroneous content that's designed to mislead or sow confusion.
The problem isn't just fake news--it's the homogenization of the web, that is, the elimination or marginalization of independent voices of skepticism and dissent.
There are four drivers of this homogenization:
1. The suppression of dissent under the guise of ridding the web of propaganda and fake news--in other words, dissent is labeled fake news as a cover for silencing critics and skeptics.
2. The sharp decline of advertising revenues flowing to web publishers, both major outlets and small independent publishers like Of Two Minds.
3. The majority of advert revenues now flow into the coffers of the quasi-monopolies Facebook and Google.
4. Publishers are increasingly dependent on these quasi-monopolies for readers and visibility: any publisher who runs afoul of Facebook and Google and is sent to Digital Siberia effectively vanishes.
The reason why publishers' advert incomes are plummeting are four-fold:
1. Most of the advert revenues in the digital market are being skimmed by Facebook and Google, as the chart below illustrates.
2. Ad blockers have become ubiquitous.
3. Few people click on the display ads that are the standard in desktop web publishing; in other words, these ads simply don't work very well, and much of the revenue being generated is click-fraud, i.e. bots not real people clicking on adverts because they're interested in the product/service. As a result, advertisers are pulling away from these type of ads as they search for advert models that aren't so vulnerable to click-fraud.
4. The web is increasingly shifting to mobile, which has fewer advert spots due to the small size of the display. In addition, major third-party advert services such as Google Adsense place restrictions on the number and size of ads being displayed on publishers' sites.
The systemic erosion of advert revenues for everyone other than FB and Google is evident everywhere: for example, BuzzFeed Set to Miss Revenue Target, Signaling Turbulence in Media Prospects for a 2018 initial public offering by the high-profile publisher now appear remote.
Digital publisher BuzzFeed is on track to miss its revenue target this year by a significant amount, the latest sign that troubles in the online-ad business are making it tough for new-media upstarts to live up to lofty expectations.
As a result of these two dynamics--the censorship of dissenting views under the excuse of limiting fake news, and the erosion of advert income--independent publishers are losing ground. While those posting on Facebook and other social media sites have little expectation of monetizing their content, many web publishers made enough income off adverts or affiliated income (from YouTube channels, for example) to justify the enormous time and effort they expended keeping their channel/site going.
As advert income has dwindled, there are only two other revenue models available to publishers: a subscription service or Patreon, i.e. the direct financial support of users/readers/viewers. Major publishers are struggling to build a subscription base large enough to fund their operations, a task made more difficult by the expectation that all content is free or should be free.
Patreon has been a boon for thousands of independent writers, journalists, cartoonists, filmmakers and other creators of content. The Patreon model (as I understand it, and yes I have a Patreon campaign) is not based on content that's behind a paywall available to subscribers only, but on providing incentives in the form of content or other rewards to those who choose to contribute.
The Patreon model only works if enough users/readers/viewers step up to support content creators they value. I think the success of Patreon suggests that many people are willing to support the content creators they value. But like all voluntary revenue models, there's the free-rider issue: people who may have the income to pay a bit for content choose not to, and in essence free-ride on those few who do contribute/pay for content.
Some people have advanced the model of micropayments as the solution to the problem of compensating content creators fairly. While this model has some obvious benefits--pennies charged for access to content might add up to a living for content creators if their audience was large enough--it would still be a voluntary system, and thus it would have the same free-rider issue as every other voluntary payment-for-content idea.
Posting "free" content on social media ends up driving advert revenues to the social media and search monopolies, leaving nothing for the content creators. There is only so much serious content that can be created for free.
If what we're left with is "free" content (i.e. the creator gets no income for creating and posting content), Facebook, Google and click-bait link farms of sensationalist headlines, we'll end up with a thoroughly homogenized web of "approved content" underwritten by lobbyists, the entertainment industry and elitist foundations/think tanks, and little in the way of real dissent or diversity of independent analysis.
In other words, we'll be left with officially generated and sanctioned fake news and "approved" dissent: unemployment is at record lows, inflation is near zero, the "recovery" is alive and well, Russia is the enemy and any suggestion to the contrary is propaganda that must be eradicated as fake news, etc.
Simply put, the web is becoming Orwellian. There's plenty of approved "diversity of opinion," but dissent is being sidelined to the fringes as a risk to the perfection of managed content.



If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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Wednesday, November 15, 2017

The Superhero Complex: Are We Incapable of Saving Ourselves?

If we felt empowered in daily life, would we be so enamored of superheroes constantly saving our world from destruction?
It's been widely noted that the U.S. film industry ably functions as a pro-global hegemony propaganda machine: even when the plot features evil rogue elements at work in a global-hegemony agency (Pentagon, CIA, NSA, etc.), the competence of the agency is never in doubt, nor is the agency's ability to rid itself of the evil rogue element.
Evil conspiracies are revealed and the Good Guys/Gals win.
This depiction of official competence and the moral righteousness of patriotic employees is not surprising; these agencies have long "cooperated" with Hollywood on many levels.
More troubling is the recent film-industry depiction of our dependence on superheroes and their superpowers to set things right. The benign view is that Hollywood is always seeking new billion-dollar source materials for multi-film franchises, and comic book heroes are tailor-made for franchises: not only can multiple films be made about individual superheroes, but the potential for mix-and-match combinations of superheroes is practically endless.
The less benign view is that the popularity of superhero movies reflects a deep insecurity and worrisome desire for fantasy saviors, as if mere mortals can no longer save themselves with their pitiful real-world powers.
Psychoanalyzing the zeitgeist of films has long been a popular parlor game: much has been written about the popularity of monster films (often featuring nuclear radiation as the trigger of the mayhem) in 1950s Japan, and the meaning of the American Noir films in the 1950s.
Correspondent C.D. recently submitted an interpretation of Hollywood's superhero movies: is our collective fascination with superheroes reflecting a sense that we no longer have the power to save ourselves?
"One of the things I've been thinking about lately is the idea of TPTB (the Powers That Be) using entertainment, specifically movies, to keep the masses from rising up. Have you noticed how many modern movies use the archetype of the hero, but place that hero in opposition to some type of system (e.g. the Empire in Star Wars), or we have superheros. In both instances, there is a type of cathartic release for the audience's frustrations with the current system. When the evil empire is defeated in the movie, people get an emotional release and they feel less motivated to deal with the real world empire.
When a superhero takes care of the problem, the audience is lulled into the pattern of thinking that someone else will take care of things. Also, often these superhero movies present the average Joe/Jane and the authorities as incompetents who need saving, which reinforces a feeling of helplessness to take on big powers. I'm sure others have come up with this type of analysis and I may be repeating what they have said, but it's worth further consideration."
Thank you, C.D. I don't think it's much of a stretch to say that many people sense their power within the system is extremely limited, as is their power to radically transform their own situation.
As for cheering for the ragtag rebels resisting the Empire--how many people feel divested from America, that is, they sense their "ownership" in the Empire's wealth and power is near-zero? How many feel disempowered and disenfranchised?
It's not much of a leap from social, political and financial divestiture to feeling that it takes superpowers to change one's circumstances or save the system from disorder and destruction.
Are we incapable of saving ourselves from a self-destructive status quo owned and operated by the few at the expense of the many? If we felt empowered in daily life, would we be so enamored of superheroes constantly saving our world from destruction? If we felt the system still had the wherewithal to restore itself, would we need so many superheroes?
Or maybe it's all just good clean (highly profitable) fun, or a sci-fi/fantasy updating of Greek Mythology. Still, that practically every other movie is another installment of the superhero franchise seems to beg for a look beneath the surface appeal of these escapist extravaganzas.



If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Sally T. ($5/month), for your superlatively generous pledge to this site-- I am greatly honored by your support and readership.

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Tuesday, November 14, 2017

Is This Why Productivity Has Tanked and Wealth Inequality Has Soared?

Needless but highly profitable forced-upgrades are the bread and butter of the tech industry.
One of the enduring mysteries in conventional economics (along with why wages for the bottom 95% have stagnated) is the recent decline in productivity gains (see chart). Since gains in productivity are the ultimate source of higher wages, these issues are related. Simply put, advances in productivity are core to widespread prosperity.
But that's only half the problem--productivity gains have flowed to the top of the income-wealth pyramid as financialization and cartels have replaced real-world wealth creation as the source of wealth-income.
Longtime correspondent Zeus Y. recently identified one cause of declining productivity and the narrowing of financial gains in the top: the quasi-cartels that dominate our economy profit by introducing and maintaining inefficiencies, not eliminating them. This runs counter to the accepted wisdom in classical free-market capitalism that generating efficiencies increases profits.
Here is Zeus's explanation of this perverse dynamic:
"With Big Data and Big Profit dominating the products, services, and platforms of everything from iOS operating updates to delivery of healthcare, let's make the plain-as-day argument: PROFIT and EXTRACTION MEANS PRODUCING INEFFICIENCIES, NOT ELIMINATING THEM.
They make their money by creating inefficiencies, bottlenecks, and gatekeepings that they can profit from. Every middleman function they can stick in their system is a potential profit source for them.
This was especially apparent to me in all the bugs I have experienced with Apple upgrades on my phone. I have to take the time to fix their screw-ups, which are designed to aggregate my data and usage to profit them. You see this with the manipulation of Facebook, creating a very black and white world that motivates and manipulates people to a froth with filters and algorithms that reinforce their biases.
This is not free and democratic access, but inefficient and narrow manipulation, cutting down on alternatives, possibilities, and better ways to think and do. What would a more efficient and democratic system look like, one where access, freedom, and, yes, real efficiencies (especially democratic and community efficiencies) would predominate?"
Thank you, Zeus. As Marx observed 150 years ago, the most profitable arrangement is monopoly, or failing that, a cartel that controls a specific market. Thus it is no surprise that Google, Facebook and Amazon are attempting to become quasi-monopolies in their respective spaces, just as Standard Oil gained a near-monopoly on the oil market in the early 20th century.
Corporations no longer seek a coercive old-style monopoly that violates anti-trust laws; today they eliminate competition by scaling up to dominate a sector. I covered this in Are Facebook and Google the New Colonial Powers?(September 18, 2017).
Once a corporation achieves dominance, it can impose profitable inefficiencies (for example, healthcare and higher education), force customers to perform labor that was once done by companies as part of their service (self-checkout, endless software updates), and profit from customer data with little fear of blowback: now that you need us, we can extract maximum profit from you without fear of regulation or competition.
Once customers are dependent (or addicted, in the case of opioids, mobile telephony, Facebook, etc.), then corporations can impose all sorts of burdens on their customers and demand annual ransom, a.k.a. software licensing and/or update fees.
Consider Microsoft's dominance in operating systems and Office. Microsoft can sell buggy, insecure software, and require constant purchases of "upgraded" software that has lower functionality than the product it replaces.
The same dynamic is in play with Apple and Android OS in the mobile space. I was recently forced to upgrade my perfectly functional iPhone 4 because some apps only work now in the latest iOS. Meanwhile, Windows 10 is demanding I upgrade my BIOS so my laptop can accept the latest Win10 update. Needless to say, Microsoft offers zero assistance beyond the nag-box.
Needless but highly profitable forced-upgrades are the bread and butter of the tech industry. If we actually valued efficiency and productivity, our system would encourage durability, efficiency and reducing waste. Alas, all three of these worthy traits drastically reduce profits, so instead our maximizing profits by any means available system incentivizes planned obsolescence, inefficiencies controlled by cartels and endless waste of goods, services, customer time and resources.
The immense profitability of inefficiencies controlled by monopolies, quasi-monopolies and cartels is a key reason productivity has faltered and gains flow only to the top. There are other models for distributing software and services, for example, open-source software. There are other models of ownership, for example community ownership of resources and enterprises. But given the financial and political dominance of cartels, these options have been neutered or marginalized.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Joel S. ($5/month), for your superlatively generous pledge to this site-- I am greatly honored by your support and readership.

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