Wednesday, September 30, 2020

The Urban Exodus and How Greatness Goes Bankrupt

The best-case scenario is those who love their "great city" will accept the daunting reality that even greatness can go bankrupt.

Two recent essays pin each end of the "urban exodus" spectrum. James Altucher's sensationalized NYC Is Dead Forever, Here's Why focuses on the technological improvements in bandwidth that enable digital-economy types to work from anywhere, and the destabilizing threat of rising crime. In his telling, both will drive an accelerating urban exodus over the long-term,.

Jerry Seinfeld's sharp rebuttal, So You Think New York Is 'Dead', focuses on the inherent greatness of NYC and other global metropolises based on their unique concentration of wealth, arts, creativity, entertainment, business, diversity, culture, signature neighborhoods, etc.

The core issue neither writer addresses is the financial viability of high-cost, high-tax urban centers.

It's telling that Seinfeld's residency in Manhattan began in the summer of 1976, shortly after the federal government provided loans to save the city from defaulting on its debts and declaring bankruptcy.

In other words, Seinfeld arrived at the very start of New York's fiscal rebuilding, though its social decline would continue for another few years (the 1977 blackout and looting, etc.). Fiscal conservative Ed Koch was elected mayor in 1977 and by 1978, the city had paid off its short-term debt.

This return to solvency laid the foundation for the eventual revival that attracted capital, talent and hundreds of thousands of new residents, replacing the 1 million+ residents who had moved to the suburbs in the tumultuous 1960s and 70s.

This urban exodus had led to urban decay which had generated a self-reinforcing feedback: the greater the decline in livability, the more people who moved out, which then reduced commerce and taxes, further exacerbating urban decay, and so on.

As I explained in How Extremes Become More Extreme, these feedback loops are one way that Extremes Become More Extreme until a tipping point / phase change is reached and livability and solvency both collapse.

The other dynamic I discuss is the Pareto Distribution, the 80/20 rule which can be distilled to 64/4 (80% of 80% is 64%, 20% of 20% is 4%). Once the vital 4% act, they exert outsized influence on the 64%, far out of proportion to their numbers.

Thus the expanding criminality of the 4% criminal class can dramatically change perceptions of safety and security of the 64%.

Telling people who no longer feel safe in the city that crime only went up 10% will not change their minds.

If 20% of the businesses in a district close for good, the district might retain enough of a concentration of commerce to draw customers.

But once the number of businesses plummets below a critical threshold, the survival of the remaining enterprises becomes doubtful as the customer base drops below the level needed to sustain the remaining businesses.

As I have repeatedly stressed, the surviving businesses are burdened by high fixed costs, none of which have declined even as commerce collapsed.

Again, you cannot persuade people who no longer feel that shopping is safe and fun to get out there and spend, spend, spend like they did a year ago.

Neither Altucher nor Seinfeld mention the macro-issues of demographics and the broader economy.

Despite soaring inflation and a roller-coaster stock market, jobs were plentiful in the 1970s, partly because the Baby Boomers were entering the market for goods and services and partly due to low costs for employers.

As late as the mid-1980s, it only cost me $50/month (one day's pay for a moderate-wage worker) to provide good healthcare insurance for a single, young worker. Try buying a month of good healthcare insurance today for one day's moderate-wage pay.

Not only were rents much cheaper (measured by the number of hours of work needed to pay rent), there were "squats" where the rent was zero, and a variety of cheap "slum" dwelling options. These options have mostly disappeared from the housing inventory, so it now takes enormous sacrifices to live in a "great city".

Compare these positive demographics and cost structure then to the present. Not only are jobs no longer plentiful, many of the Millennials who flocked to a "great city" for jobs and the amenities can no longer afford to live there.

Many found jobs in the dining-out and retail sectors that have been devastated, and they only survived financially by sharing flats with multiple roommates.

Costs such as healthcare insurance and housing are "sticky:" insurers, landlords, etc. are reluctant to cut prices for fear that cost reductions may become permanent, hurting their profitability.

These high costs are also endangering all the cultural institutions and commercial life that attracted people to the "great cities." I doubt that every symphony, opera company, museum, music venue, etc. will survive the downturn, due to their incredibly high fixed costs of operation.

As I've noted before, the patrons who are financially able to support these costly institutions are older and wealthier, and have the most to lose if they feel their basic security is no longer assured. They're the first to join the exodus to safer, less risky homes elsewhere. Yes, they'll miss all the amenities, but not enough to make them stay.

I've also stressed the absolute necessity for any entity to be financially viable. If the entity isn't viable in terms of income covering all expenses, it dissolves regardless of its greatness.

Seinfeld is on solid ground arguing that great cities will never go away, as their benefits are simply too compelling. On the other hand, goats were grazing in Rome's Forum, a few decades after the Western Empire collapsed.

What collapsed wasn't just Imperial authority; the city could no longer afford all the free bread and circuses which fed and amused much of its vast populace, not could it defend / maintain the long trade routes that fueled commerce or the political structure that secured the wealth of its nobility.

Cities are not cheap to operate, and they must continually attract workers and capital / wealth which can both be taxed at a high rate. They also need a high volume of commerce that can be taxed.

Most employers are facing a profound reset that will very likely require permanent cost-cutting to maintain profits, and remote work is very cost-effective, as commuting and office space are both unnecessary expenses that can be eliminated.

In terms of financial viability, much of the activity that generated taxes for "great cities" is gone for good: downtown concentrations of tens of thousands of workers that supported hundreds of small businesses, commercial landlords paying high property taxes, and so on.

The question nobody seems to be asking is: are cities no longer financially viable, given the enormous cost of living, the high taxes needed to run the city, and the strong economic and demographic headwinds?

What kind of city is possible if half the small businesses close and tax revenues fall by 50%? What effect will those massive changes have on the livability of the city and its most compelling attractions? How will the city provide services on half the revenues?

The worst-case scenario is only those who can't afford to leave will be left. Unless great sacrifices are made by those remaining, that's not a recipe for financial viability, it's a recipe for goats grazing in the Forum.

The best-case scenario is those who love their "great city" will accept the daunting reality that even greatness can go bankrupt, and that the city will have to adapt in new and wrenching ways to remain financially viable as tax revenues decline and some percentage of the wealthiest taxpaying residents have left or will leave.

It's not just the urban exodus that's the challenge--it's who's in each successive wave of the exodus. If the wealthy, the entrepreneurs and the displaced small business owners leave in the first wave, the adaptation will have to be rapid and profound, as the modest, incremental reforms that typify the past 75 years will not be enough to be consequential.



Of related interest:
Dear Jerry and James: You’re Both Wrong About New York (9/11/20)


My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.



Recent Podcasts:

AxisOfEasy Salon #23: Lords of the Algos (1 hr)

My COVID-19 Pandemic Posts


My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).



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.


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Tuesday, September 29, 2020

Helicopter Money and the End of Taxes

Rather than right the ship, the "easy fix" is to distribute "free money"--not just to billionaires and corporations but to everyone.

The system of collecting taxes and distributing the dough is a zero-sum game: each dollar of tax revenue paid by someone and given to someone else is one dollar that the taxpayer will no longer have to save or spend. Meanwhile, the recipient received a dollar that would not have been available without taxes.

State and local governments are still bound by this zero-sum game except for infrastructure spending funded by the sale of municipal bonds. These bonds are debt and must be paid back with interest. But as a general rule, the general funds of cities, counties and states are zero-sum: they can only spend what they collect in tax receipts.

As a result, the feeding frenzy at the public trough has winners and losers: taxpayers who receive fewer benefits than they pay in taxes are the losers, and residents / enterprises who get subsidies, tax breaks, entitlements, benefits in excess of what they paid in taxes are the winners.

Zero-sum: every corporate or individual welfare queen / king that mooches off the public trough as a result of skims and scams (gaming the system, lying, lobbying, legalized looting, etc.) deprives a legitimate recipient / program of scarce tax dollars, or deprives the taxpayers of a tax cut.

The federal government has no restraint. The federal feeding trough can be refilled by deficit spending, i.e. selling Treasury bonds and blowing the proceeds on essentially limitless skims and scams.

Taxpayers naturally resent the skims and scams their hard-earned tax payments fund. Politicos are dimly aware of this resentment (dismissed as evil populism by the status quo's apparatchiks) and so they naturally seek to defuse this threat to their own skims and scams by giving free money to everyone and not just to their super-wealthy donors (in the form of bailouts, subsidies, tax breaks, no-bid contracts, etc.)

We've already had a taste of free money for everyone in the $1,200 giveaway earlier this year. There was also talk of dispensing with the individuals' share of Social Security/Medicare taxes (7.65% of earned income) for a limited time, but this created confusion because it was unclear if this was a temporary measure that would be due later or an actual freebie.

Clearly, this was a trial balloon for eliminating the Social Security/Medicare tax for low and moderate income households. Why collect $1,200 in SSA taxes and then hand the household $1,200? Why not just eliminate the tax?

Most households pay very little federal income tax as it is. The bottom 50% pay 1% of all federal income taxes, and the top 10% pay the majority of all income taxes.

Declaring the first $50,000 or $60,000 of income per taxpayer as tax-free would not reduce tax revenues by much because the bottom 90% pay such a small percentage of income taxes.

If 90% of households don't pay federal income taxes, then they have no beef with who's feeding at the federal trough, as it's no longer zero-sum. There will be "free money" for everyone: corporate welfare galore, no income taxes for the bottom 90%, permanent unemployment payments for the chronically unemployed, Universal Basic Income (UBI) for everyone, even the top 10% (so they get something for free)-- helicopter money without limit.

As all the extremes of wealth/income inequality unravel, calls to "tax the rich" gain favor. The problem is that the super-rich have the political power to evade taxes, so the only people who will pay more will be the tax donkeys who aren't rich enough to hire teams of tax attorneys and buy tax breaks from desperate-for-campaign-cash politicos.

The idea of countering inequality by giving everyone free money seems painless as long as the Federal Reserve can create trillions out of thin air. And the basic idea of MMT (Modern Monetary Theory) is the Treasury can create trillions without even selling Treasury bonds that accrue interest.

As I explained in The Silent Exodus Nobody Sees: Leaving Work Forever (9/23/20), all this free money (with a token giveaway to the remaining tax donkeys) will have unintended consequences:

1. The working poor who do the economy's hard, low-pay work will find ways to leave their life of poorly paid toil behind forever.

2. The tax donkeys will have tremendous incentives to cut their work and income down to the tax-free level. Why kill yourself to pay 50% of what you earn as taxes?

What kind of economy will we have when all the hard work becomes optional and a consequential percentage of the tax donkeys effectively "lay down their burdens"? All the "free money" will go to consumption, not production, and so the purchasing power of the "free money" will erode very rapidly.

This Is Why Inflation Will Rip Everyone's Face Off (9/17/20)

The intrinsic unfairness of the status quo is undermining the willingness to keep contributing to it. Rather than right the ship, the "easy fix" is to distribute "free money"--not just to billionaires and corporations but to everyone.

Simply put, work no longer pays. What pays is turning companies into debt-zombies to buy back shares and milking America's monopolies. (Contributor A.P. outlined how the system really works: Our Wile E. Coyote Economy: Nothing But Financial Engineering (6/11/20)

All those who believe this is a permanent, stable system will get a nice hard chair at the banquet of consequences. The dominoes are falling but distractions abound.



My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.



Recent Podcasts:

AxisOfEasy Salon #23: Lords of the Algos (1 hr)


My COVID-19 Pandemic Posts


My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).



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.




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Sunday, September 27, 2020

Goodbye To All That: Are Our Rituals of "Prosperity" Increasingly Meaningless?

The heretical truth is that many of the "consumption rituals" that signified "prosperity" for decades are either meaningless, unaffordable or require way more effort than the meager payoff is worth.

Of all the economic heresies imaginable, perhaps the most heretical is to recognize what we label "prosperity" as increasingly meaningless rituals more akin with Soviet-era staged parades than actual well-being.

This is the most dangerous heresy because it breaks the link between consumption--the core activity of our economy--and human happiness. If conspicuous / surplus consumption is ritualistic rather than fulfilling (i.e. it adds to our well-being), then it becomes meaningless or even corrosive.

The focus them shifts to the negative consequences of consumption, i.e. how the rituals of consumption are eroding / disrupting our well-being.

Rituals are satisfying because the performance of the ritual is itself the source of our satisfaction. Belief or enjoyment isn't necessary; completion of the ritual is its own reward.

But once we pull away from the rituals, the emptiness of the performance becomes clear and we start asking, what am I getting out of this for the expense and effort?

These questions arise because many conventional consumption rituals have become prohibitively expensive and troublesome and others demand major amounts of time with very little payoff.

Consider the ritual of passively consuming sports. The ratings of televised games were falling before the pandemic, and by some measures appear to be in free-fall. It's not hard to discern potential reasons: Millennials never formed the habit/ritual of spending hours watching a game, or attending games; despite the protests from die-hard fans, most of the games are interchangeable, as are the players, as pro and college sports have become homogenized in many ways.

As with many other consumption rituals, those performing the rituals rarely stopped to ask themselves if the ritual was actually improving their well-being, or if it had slowly morphed into a colossal waste of time and money.

Many activities of discretionary consumption are in large part rituals: going on vacations, taking cruises, shopping, dining out, and so on. While many will miss the performance of these rituals, others will realize they don't really miss them. Some will feel immense relief that they no longer have to put up a facade of enjoying the tiresome, meaningless rituals.

The enormous expense of once-affordable rituals such as dining out means many will give up these consumption rituals because they can no longer afford it. Two sandwiches and two drinks, sales tax and a tip is now routinely $50 or more. (Note to wealthy readers: in the real world, it's pretty difficult to earn $50 net of taxes and the cost of doing business.)

Other consumption rituals were embedded in modes of work that are dissolving because they're no longer financially viable. The rituals of business travel and attending conferences paid by employers are dying because the luxury of these consumption rituals is no longer affordable to employers whose revenues and profits are in terminal decline.

Every manager pounding the table for a return of all employees to the central office has yet to discover what happens when the corporation reports a staggering loss and refuses to provide forward guidance. If the manager is fortunate enough to retain their job, their task will be to eliminate all offices and digitize and/or automate every function to cut costs.

The many rituals of a central office--the endless meetings, the petty arguments, the smoking breaks, going out for lunch--goodbye to all that. A couple of quarters of steep losses in revenues will push every company and agency to strip away all the rituals of consumption that are no longer affordable.

Did all that enormous expense of time and money really make us happy, or were we just going through the motions? Even those who were so anxious to resume the performance of these consumption rituals may find that the performance leaves them with a nagging sense of ennui and hollowness, as if something is missing, despite the perfect repetition of the ritual.

Some will blame the pandemic, but this is not the real source of their dissatisfaction. The heretical truth is that many of the consumption rituals that signified "prosperity" for decades are either meaningless, unaffordable or require way more effort than the meager payoff is worth.

So the game is playing on the TV but nobody's watching. The news is playing on another TV, but nobody's watching that, either. A disembodied stock market pundit declares a new Bull market but nobody's listening. The social media feed is scrolling by in a mad fury on a smartphone but nobody's clicking on any of it. It's all pointless, hollow, tiresome, for the completion of the ritual is no longer enough.

The meaningless of the engagement rituals and the consumption rituals is now so obvious that the desperation of the purveyors to get everyone back on board adds an exclamation point to the emptiness of their offerings.

Here's why addressing this is heresy: what props up the economy once all the consumption rituals fall out of favor or are no longer affordable? The answer is of course nothing.



My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.



Recent Podcasts:

AxisOfEasy Salon #23: Lords of the Algos (1 hr)


My COVID-19 Pandemic Posts


My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).



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.


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, September 25, 2020

The Road to Nowhere: Whatever Can't Be Politicized Ceases to Exist

Just as time is a one-way arrow, "the politicization of everything" is a one-way road to dissolution and collapse.

The essence of any Totalitarian society is the politicization of everything, as everything must be either supporting the status quo or it's a threat to the status quo.

There is no middle ground in a Totalitarian society and so everything--literally everything-- must be politicized to assess its true nature of being "for" or "against" the status quo.

In such a society, what cannot be politicized ceases to exist. It isn't counted or recognized, and so it fades into a netherworld of shadows, a dangerous realm where the mere act of attempting to recognize a non-politicized experience is itself a threat to the status quo.

You will of course be thinking of the former Soviet Union (USSR) and other Totalitarian societies. Here's an extreme example of how the politicization of everything works: a conventional worker in a conventional factory happens to mention to a co-worker that he dreamed Stalin had fallen ill, and this worried him. The co-worker reported this disturbing dream to the proper authorities, who instantly recognized the true nature of the dream and sentenced the worker to 10 years in the Gulag for having an anti-Soviet dream.

(A 10-year sentence in the Gulag was so common that it was nicknamed "a tenner.")

In America circa 2020, "a tenner" for the wrong thought, opinion or dream takes other forms. Indeed, even the claim that a dream might not have a political angle is itself cause for being sentenced to "a tenner," because the core of the Totalitarian society is the politicization of everything.

Every object, entity, image, document, historical "fact," person, thought, emotion, reaction, narrative, opinion, everything tangible or intangible, has a barely concealed political subtext in a Totalitarian society.

There is nothing innocuous, innocent or whimsical in a Totalitarian society, at least in the public sphere. In an era permeated by the cruel marriage of surveillance capitalism and the bitterly divided state, even the once-private sphere is subject to public exposure and shaming / sentencing.

As in an Orwellian nightmare, your "smart" phone, vehicle, TV or Alexa-powered doorbell can eavesdrop and record your private conversations and behaviors, and somebody somewhere has access to this data and can share it with others.

The ostensible justification is "your safety" or "to catch wrongdoing," but this is transparently false. The real reason is to discern your political crimes. You need not commit any crimes per se to be persecuted; all that's needed is some tiny bit of evidence that reflects your true beliefs which by definition must be supportive of the status quo via endless virtual-signaling; if not, then they are necessarily a threat to the status quo.

To remain confidential, everyday life must be treated as wartime. Your hand-written journal is safe, as long as you don't share it digitally. But since we've morphed into an engagement-based social order, your selfhood now depends on engaging others digitally via "likes," shares, etc. and sharing your most "engaging" images and experiences.

A non-shared, non-digital private life is now a form of non-existence that most people find painful and isolating. Hence the obsessive addiction to social media and "sharing" one's (carefully edited) life online.

Alas, even the most careful editing cannot conceal your true beliefs which will be revealed by the smallest detail: your location, the brand of items you're wearing, etc.

In a bitterly divided society, your beliefs will be political crimes to one camp or another. Any attempt to "find common ground" will be dismissed as a self-serving ploy, or more dangerously, as a hidden agenda of the forces attempting to destroy the Party.

Those furiously virtue-signaling to maintain their political righteousness within their chosen camp find the sands shifting beneath their feet. The most extreme virtue-signaling is rewarded until it becomes a new threat, and then those who strayed unknowingly beyond the invisible lines will find themselves cast out for political crimes whose definition is constantly changing.

Science has long be politicized, of course, but now it is being hyper-politicized as the stakes keep rising. Claims of neutrality are necessarily viewed as nothing more than clever facades to mask the real motives of self-interest and collusion.

Just as time is a one-way arrow, the politicization of everything is a one-way road to dissolution and collapse. Wishing it wasn't so doesn't make it so.



My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.



Recent Podcasts:

AxisOfEasy Salon #23: Lords of the Algos (1 hr)

My COVID-19 Pandemic Posts


My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).



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.


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, Bob S. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your steadfast support and readership.   Thank you, Roger H. ($25), for your superbly generous contribution to this site -- I am greatly honored by your steadfast support and readership.

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Wednesday, September 23, 2020

The Silent Exodus Nobody Sees: Leaving Work Forever

The "take this job and shove it" exodus is silently gathering momentum.

The exodus out of cities is getting a lot of attention, but the exodus that will unravel our economic and social orders is getting zero attention: the exodus from work. Like the exodus from troubled urban cores, the exodus from work has long-term, complex causes that the pandemic has accelerated.

These are the core drivers of the exodus from work.

1. labor's share of the economy has been in multi-decade decline. It's easy to blame globalization and/or automation--and it's true that the decline in labor's share accelerated from 2000 on. But this trend began around 1970, long before China joined the World Trade Organization and the advent of "software eating the world." (see chart below)

2. While it's convenient for those reaping the big gains (see chart below) to blame globalization and/or automation, the real driver was financialization--the neoliberal move to deregulate finance so it could turn everything into an exploitable "market" that could be made to serve one master: shareholder value, the innocuous-sounding code-phrase for anything goes and winner takes most--if you're rich.

Shareholder value was the super-wealthy's self-serving justification for unlimited greed as corporations went from being enterprises serving communities, the national interest, employees, customers and shareholders to financialization machines whose sole purpose was enriching insiders via loading the company with debt to pay huge bonuses to top managers, stock buybacks funded by debt, the abandonment of trustworthy accounting principles and so on.

Financialization and the deification of shareholder value sluiced all the gains into the hands of the few at the top at the expense of the many. As the chart below indicates, the top 0.1% enjoyed income gains of around 350% since 1979 while the bottom 90% barely topped 20%--a number that would be sharply negative if real-world inflation were included.

Simply put, the bottom 90%--wage-earners--lost ground over the past four decades of financialization while the wealthy winners of financialization became super-wealthy. The rewards of labor/work have diminished to an extraordinary degree for the bottom 90%, and even the 91% - 99% bracket has found their labor has mostly served to enrich those above them.

These trends will drive both the top wage-earners and the bottom wage earners out of the workforce. The managerial class that keeps the whole machine glued together can either retire or use their human and financial capital to find other less stressful ways to make a living and downsize their expenses to match their reduced income.

Some will be voluntary, many will be involuntary, but the results will be the same: a mass exodus of hard-to-replace skilled workers. This is what I'm calling the take this job and shove it exodus.

Once the Federal Reserve starts sending "free money" directly to households, many at the bottom of the pay scale will realize they too can take this job and shove it.

In Unprecedented Monetary Overhaul, The Fed Is Preparing To Deposit "Digital Dollars" Directly To "Each American" (Zero Hedge)

'I cry before work': US essential workers burned out amid pandemic Essential workers reported stress caused by increased workloads, understaffing, fears over Covid and struggles in enforcing social distancing. (The Guardian)

What few well-paid apologists seem to realize is that to equal the purchasing power of the minimum wage I earned in 1970 ($1.65/hour), the minimum wage would have to be close to $20/hour now. The absurdly under-reported rate of official inflation (the Consumer Price Index) claims that a minimum wage of $12/hour now equals the purchasing power of $1.65/hour in 1970, but since I've kept records of all expenses I can report that this is totally false.

As the chart below shows, wages' share of the economy has been in a relentless 50-year slide. The entire machinery of inflation calculation has been driven by the desperate need to mask the true collapse of the purchasing power of wages.

Once the workforce awakens to this, the silent exodus out of the workforce will gather into a flood tide. Permanent unemployment payments, Universal Basic Income (UBI), free Fed money--regardless of the program or name, these will enable a mass exodus of those at the bottom of the workforce pay scale while burnout will also decimate the ranks of essential managerial / skilled workers.

It's payback time, people. Hey, Financial Aristocracy, clean your own floors and slaughter your own meat. Hey, corrupt politicos and apparatchiks, wipe your own tables and watch your own brats. The take this job and shove it exodus is silently gathering momentum.

The Protected Class of pundits, technocrats, flunkies, toadies and enforcers believes the take this job and shove it exodus is "impossible", just as everyone believed the Titanic was unsinkable. Just as the Titanic sinking went from "impossible" to inevitable, so will the take this job and shove it exodus move from "impossible" to inevitable.





My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.



Recent Podcasts:

AxisOfEasy Salon #22: When the going gets weird, the weird turn to YouTube (1 hr)


My COVID-19 Pandemic Posts


My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


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