• What We Lost in the Pandemic

    April 4, 2020 // 11 Comments »


     
    A lot of change has taken place in a very short period of time in America, almost all of it undebated and unchallenged, in response to what still has a long way to go to justify it. But the virus is killing us all! Stop. It is not only possible to hold two ideas in mind at once, it is vital. The virus is a threat. At the same time we are immersed in making fundamental changes to society willy-nilly that will outlive the virus.
     
    Only two weeks ago I had an hourly-paid part-time job, my hours subject to my boss’ needs and whims. That made me a lot like the 60 percent of the American workforce who are also hourly employees, not to mention those working as independent contractors, adjuncts, and the massive undocumented labor behind our farms, hotels, and restaurants. The government ordered most of us to stop working and we did. Nobody is entirely sure if “the government” can actually just do this, but it did. Almost none of us can work from home. We wait like baby birds for the government to drop checks into our mouths. Overnight we went from workers, albeit workers at the failing edge of economic inequality, to dependent on government handouts. As the balance of power between Americans and their government changes dramatically, 60 percent of us approve of Trump’s handling of the crisis.

    Perhaps the clearest example of what just happened took place among teachers. Teachers from K-College worked frantically on their own time to eliminate the need for classrooms and move instruction online. Something that might have been rejected as unacceptable six months ago, or expected to take years under normal circumstances, was done at no new cost overnight. No consultants, no arguments from parents or unions, just worker bees radically transforming the American educational system. It won’t take long after this is done for institutions to realize they don’t need so many teachers, classrooms, janitors, etc. anymore. The infrastructure now assembled can be used so one teacher can instruct hundreds or thousands of kids. Why have ten math professors to teach ten sections in ten rooms when one person online can more or less do it? So teachers, thank you for your efforts to iron out the bugs in a mass proof-of-concept experiment. Don’t worry in the future when you’re out of work; there are always alternatives in the free market system. A porn site is offering the unemployed big bucks as cam girls during the pandemic.

    A live classroom teacher (doctor, therapist, consultant, etc.) may someday become yet another luxury available only to a select few. Quality will be what you can afford. That is part of what corona is doing, helping people adjust to a new standard. Remember once most white collar jobs came with a private office with a door, a dedicated secretary, and a formal lunch hour, never mind a pension. Manufacturing jobs paid a living wage, with union benefits and a picnic each summer to honor the American worker. Stuff happens, ya’ know?

     

    For the second time in about only a decade, we are seeing our homes endangered. Rent payments are hard. As mortgage payments slip the banks are sniffing around like hyenas. Some people will fail on rent payments on the same homes they used to own. Occupy Wall Street? No, occupied by Wall Street.

    Like good boys and girls a lot of us did invest our money after the 2008 economic crisis, yet anyone contemplating retirement or college in the near term just saw 20 percent of all that go away. Again. The bailouts are here, in the trillions, again, for the airlines and other businesses. Of course the stock market will go back up, it always does. What occurs in the space between it going down and going back up is the wealthiest Americans, having money in reserve, buy cheaply once-expensive stocks you were forced to sell at the bottom to feed your family. In a few years you’ll start buying in again, you know, when you get back to work, to push up prices and fuel the rich folks’ gains. The wealthiest one percent captured 95 percent of post-2008 financial crisis growth while the bottom 80 percent, whose wealth was in their homes not stocks, became poorer as their missing homes did not “grow.” Their wealth, such as it was, was a Potemkin vision in the form of their homes which they actually did not own. The last recession represented the largest redistribution of money in a century.

    What about 2020? Since over half of all Americans now own no stock, the wealth in 2020 will be sucked out of the so-called 10 percent, the remains of what was once the upper middle class. They are the only ones who actually have money for the hyper-wealthy to take. The bottom 90 percent are basically too poor to steal from (except our labor; see above.) A month ago the richest 10 percent of Americans owned 84 percent of the total value of the market. The One Percent are in the process of taking from the Nine Percent below them right now. Fair enough in a way; much of the Nine Percent’s wealth was harvested out of the 2008 crisis.

     

    At least in 2008 it was just our money they took. I sit here in NYC under a multi-layered federal, state, and city state of emergency. I am still sort of free to go out, but since most stores, bars, restaurants, theatres, gyms, etc. are closed by fiat, freedom of movement is an illusion, like prisoners circling the rec yard. Adding to the people who now tell me what I can and cannot do, the manager of my local grocery has made up his own rationing rules, choosing which products and which quantities he allows us to purchase.

    Freedom of assembly is gone. No more questions about whether Milo can speak on campus. No more Pink Pussy Hat marches. A month ago if anyone said that to a BLM group, the riot would have been followed by a Supreme Court First Amendment case. In 2020 only three people nationwide have legally challenged anti-assembly orders. Before the virus we made fun of George W. Bush, who in the immediate aftermath of 9/11 seemed to downplay the severity of it all by telling Americans to go shopping, to visit Disney World. That seems generous to a population now cowing in their bedrooms. We are being conditioned to reject the comfort and solidarity of being in the presence of others; one media outlet explains to little JoJo’s and Yorki’s how to report large gatherings to the authorities via an online form.

     

    Politically the progressive movement disappeared with the proverbial whisper, not a bang. Is Bernie still in? All that talk about a brokered convention, third party stuff, whatever, it is gone. Frightened people (they were scared about Bernie’s ideas long before the virus but the end came quick once the virus arrived) want to pull the blanket over their heads. Joe Biden’s campaign slogan seems to be “I Won’t Do Much,” or more succinctly, “Better Things Aren’t Really Possible.” Joe is the political equivalent of an Obama tribute band. You’ve seen them, imitators who look a little like the Rolling Stones. They play only the best hits, competently but not skillfully, showing how wide the gap is between someone who can pull “Honky Tonk Woman” from the ether and someone who can just play the cords with enthusiasm. It’s a way to make a living and for Joe Biden telling everyone things will look like the 1958 it might just be enough. Protip: don’t wager too many dineros on the political future of AOC and The Squad. Even Tulsi endorsed Biden on the way out.

     

    Orwell in 1984 never really explained how it all came to be. He wanted to shock readers with a dystopian society whole on page one, something that felt like it always was and thus always will be. For us, however, living in this time, the evolution is of some interest. Orwell was also an amateur. He imagined freedom as something people would fight for. He did not envision how easy it would be to manipulate fear into learned helplessness such that Americans would in the space of a week voluntarily give up most of their freedoms, along with their actual jobs. Orwell envisioned the need for a Ministry of Truth when in fact all it took was a handful of deaths, some prolefeed — worthless entertainment for the masses about whether calling it “Chinese flu” was racism — and a dash of sky-is-falling articles for the majority not only to go along with the new authoritarianism, but to demand more. Fear is the problem and empowering government is the solution. You have to give some things up for a safe good society. If not, you’re selfish, a thought crime.

    Of all the bell curves, the one of interest is when the cure becomes worse than the disease. When do we as a society cross the line where measures of social control are no longer affecting the spread of the disease but are damaging the life we live. Of course many of the draconian steps taken these past weeks will be pulled back. But some will stick. And the lessons learned by the darkest corners of American life will be jotted down. The same thing happened after 9/11, when frightened by terrorism, Americans gave up their rights to privacy and freedom from search with great enthusiasm. Somewhere Dick Cheney is saying to himself “we could have taken it so much further, we just didn’t realize it would be so easy.”

    Hey, Dick, check it out — we have voluntarily given up our livelihoods and jobs, freedom of assembly, and transferred most of our speech to social media monsters who can edit or block it as they wish. We are heading toward more dependency on government money to eat. Access to medical care, once limited by having “good” insurance, is now limited by medi-bureaucratic decisions — committees who will decide who gets to see a doctor. Remember how even the rumor of such “death panels” under Obamacare set people afire? We understand better now, sorry grandma.

    Unintended consequences? Doubt that. This did not just happen, our governments made it happen near enough to overnight and we wanted them to do that. No one wants to die. But think ahead to how we are going to live.
      

    Related Articles:




    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Facebooktwitterredditpinterestlinkedin

    Posted in 2020, Democracy, Post-Constitution America

    Dear People Wishing for Stock Market Trouble

    August 26, 2019 // 20 Comments »


     
     
    NOTE: I’ve been re-running this article every time over the last three years a temporary downturn on Wall Street causes progressive idiots to celebrate. The last run was in January 2019, but here we go again.

     
     

    Dear People Wishing for Stock Market Trouble:
     
    Stock market trouble will not make Trump go away.

     

    You can have fun posting memes though! He’s owned! He screwed up the one thing he says he’s good at! Rich people will abandon him! Hah hah!

    First of all, that is not what is happening. But if people want to panic based on panic journalism, by all means go ahead.

    But for the rest of us from 1929 to 2018 the S&P averaged 8-10% gains. It is up well above that for this year, so declines are expected and normal. Recessions on the other hand are CAUSED by things, they do not happen in cycles per se just because it is time. Or because the MSM wants “recession” to replace “Russia” as the magic bullet to end Trump.

    Everything tangled by US-China can be untangled, suggesting its long term effects are able to be mitigated directly. You can spend as much time as you like blaming/congratulating whomever that the fundamentals are strong, but they are and that speaks better to longer term trends than other factors. Even in the short term there is money to be made; if you bought on Friday’s drop you are already making money on today’s rise.

    If you are learning about inverted bond yields roughly the same way you learned about Emoluments and the 25th Amendment and Russiagate, you are still listening to the wrong people.

     

    But let’s look into what progressives are cheering for, hoping to happen, a real live recession. Any serious downturn in markets will cause more economic inequality. Wealthy people depend on periodic downturns to force middle class people to sell. The rich then buy cheap and wait for the inevitable swing back. They end up owning more stuff, and they got it cheaply.

    About half of all American households own stock, in most cases indirectly through mutual funds, and, more and more via 401(Ks) and whatever company pension accounts still exist. Yet despite that broad base — half of us own something in the stock market — the richest 10% of Americans owned 84% of the total value of the market as of 2016.

    Though those numbers roughly match those of America’s worst period of inequality, the so-called Gilded Age, they are a big change from 2001, when the top 10% owned only 77% of all stocks.

    Today, they have more. You have less. Your part of the market exists because the few wolves need lots of rabbits to eat. You are predator or you are economic prey. Guess where this goes? Think of it as one of those pictures where parallel railroad tracks seem to get closer and closer as they recede into the distance. The theoretical end point is one person owns 100% of everything. But modern wealthy would be happy if .01% owned just 99%, close enough.

     

    In case you missed it, that’s what the 2008 mortgage/housing crisis was all about. Middle class people lost their homes when they could not pay their mortgages. “The banks” then owned those homes and you did not. It took a few years and most prices started back up. You in turn now rent from someone who now owns those homes.

    The inequality of net worth, after almost two decades of little movement, went up sharply from 2007 to 2010, and relative indebtedness for the middle class expanded. The sharp fall in median net worth and the rise in overall wealth inequality over these years are traceable to the high leverage of middle class families and the high share of homes in their “portfolio.”

    What that means is middle class people have most of their net worth embedded in their homes, but see most of that “worth” is actually debt (leverage.) When times get tough, they may lose the home because they can’t pay the debt. People rich enough to spend money in downturns buy up those homes. They have extra money to ride out the tougher years until the government bails out the markets like Obama did in 2008. Same story for the stock market.

     

    It gets worse, because you get money by working for wages. Rich people get money through capital gains, basically stuff they buy cheaply becoming worth more over time. That’s why the downturn is bad for you, ultimately good for most of them. It is math!

    If you like math with letters in it, it is written as R > G. All explained here if you want to understand precisely why you are going to be poorer. And as a bonus, be sure to note the part about how in the U.S. wages are taxed at a higher level than capital gains. You can never have too many advantages.

    Note also that until slavery was ended in the United States, human beings were also considered as part of capital. Meanwhile, because rich people pass on their wealth to their relatives, the children of rich people are born rich and unless they get really into hookers and blow, will inevitably get richer. They almost can’t help it. The gap between the 1 percent and the 99 percent must grow. This will create the society reminiscent of the pre-Enlightenment past we are in the early stages of now. You know it from Jeopardy! as “feudalism.”

     
    Downturns are a huge sucking, a redistribution of wealth upward. You’re basically fucked in this process. Poverty is ennobling, so you do have that. Have a nice day!

     

    BONUS: I wrote a whole book about this called the Ghosts of Tom Joad but few people wanted to read it, so this is all kind of a fun secret between us.

     
     

    Related Articles:




    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Facebooktwitterredditpinterestlinkedin

    Posted in 2020, Democracy, Post-Constitution America