Category Archives: Business

The ‘Sharing Economy’ Is A SCAM, by Karl Denninger

You can tell by the shining eyes and expressions of benevolent goodness that characterize proponents of the so-called “sharing economy” that its nowhere near what it’s cracked up to be. From Karl Denning at theburningplatform.com:

This is a nasty indictment of so-called “sharing economy” entities.

We found that 85% of side-gig workers make less than $500 a month. And of all the side-gig platforms we examined, Airbnb hosts earn the most by far.

In other words there’s not a prayer in hell you can make a living doing any of this; excluding AirBNB the average person was making under $400 and the median person is making under $200!

What’s worse is that none of this appears to account for costs.

If you make $200 driving for Uber but spend $100 of that on fuel then how much an hour are you actually making?

Oh, and you must account for the deterioration of your vehicle (each mile has a cost in maintenance, deterioration of and consumption of the engine, transmission, suspension parts, tires, etc) as well.

And let’s cut the crap on the name of this thing too.  You share something you would already be doing.  If I’m driving to work and your home and office locations are betweenwhere I would otherwise travel then we could be sharing a ride to work.  If you page me on some sort of app and I make a trip I would otherwise not make I’m not sharing anything — I’m selling you the service of carting your ugly ass from one place to another.  Likewise, the premise of “Task Rabbit” or “Doordash” has nothing to do with sharing; I would never bring you food or deliver your package without being paid to do it because there’s no part of my daily life that involves performing some random task for you.

Note that since this data set comes from people applying for loans the error, if any, is likely to be in overstating their income and expenses are not asked for.

To continue reading: The ‘Sharing Economy’ Is A SCAM

 

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The U.S. Economy is a Perverted, Neo-Feudal, Rent-Seeking Abomination, by Michael Krieger

From GE funding share buybacks (which supports the price of executive stock options) instead of its underfunded pension, to trucking companies that indenture their drivers, it’s a nasty world out there, and it’s getting nastier. From Michael Krieger at libertyblitzkrieg.com:

The banker bailouts of the 2008/09 period changed my life forever. I was working on Wall Street at the time, and the way in which the government rallied around the financial institutions that torched the world and left its victims in the dust threw my entire delusional worldview into disarray. Prior to that, I had bought into the absurd assumption that I was financially successful at a young age primarily because I was hard-working and talented. The ensuing bailouts and the government’s emphasis on obsessively rescuing some of the most degenerate people in our society made me realize once and for all how completely rigged and sleazy the U.S. economy really is. As you might expect, it only got worse under Obama’s oligarch-coddling policies and will surely continue to deteriorate under Trump (Goldman Sachs is not your friend).

Ever since I left my cushy financial services job to do the challenging and often draining work of chronicling our ongoing crime scene, I’ve spent the vast majority of my free time trying to further educate myself on exactly how this system works. What I’ve discovered over and over again is that it is far more abusive than even I imagined.

Today’s post highlights two important articles that came to my attention over the past couple of days. Both are extremely disturbing, and both should be seen as completely unacceptable in a remotely ethical civilization (which we are not).

First, here’s a short excerpt from a recent Bloomberg article highlighting GE’s pension shortfall, and how it’s gotten worse as executives focused on share-buybacks as opposed to funding the pension.

It’s a problem that Jeffrey Immelt largely ignored as he tried to appease General Electric Co.’s most vocal shareholders.

But it might end up being one of the costliest for John Flannery, GE’s newly anointed CEO, to fix.

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

To continue reading: The U.S. Economy is a Perverted, Neo-Feudal, Rent-Seeking Abomination

A Cyberattack ‘the World Isn’t Ready For’ by Nicole Perlroth

Remember the WannaCry cyberattack last month? There is another cyberattack lurking out there that’s worse. From Nicole Perlroth at nytimes.com:

NEWARK — There have been times over the last two months when Golan Ben-Oni has felt like a voice in the wilderness.

On April 29, someone hit his employer, IDT Corporation, with two cyberweapons that had been stolen from the National Security Agency. Mr. Ben-Oni, the global chief information officer at IDT, was able to fend them off, but the attack left him distraught.

In 22 years of dealing with hackers of every sort, he had never seen anything like it. Who was behind it? How did they evade all of his defenses? How many others had been attacked but did not know it?

Since then, Mr. Ben-Oni has been sounding alarm bells, calling anyone who will listen at the White House, the Federal Bureau of Investigation, the New Jersey attorney general’s office and the top cybersecurity companies in the country to warn them about an attack that may still be invisibly striking victims undetected around the world.

And he is determined to track down whoever did it.

“I don’t pursue every attacker, just the ones that piss me off,” Mr. Ben-Oni told me recently over lentils in his office, which was strewn with empty Red Bull cans. “This pissed me off and, more importantly, it pissed my wife off, which is the real litmus test.”

Two weeks after IDT was hit, the cyberattack known as WannaCry ravaged computers at hospitals in England, universities in China, rail systems in Germany, even auto plants in Japan. No doubt it was destructive. But what Mr. Ben-Oni had witnessed was much worse, and with all eyes on the WannaCry destruction, few seemed to be paying attention to the attack on IDT’s systems — and most likely others around the world.

The strike on IDT, a conglomerate with headquarters in a nondescript gray building here with views of the Manhattan skyline 15 miles away, was similar to WannaCry in one way: Hackers locked up IDT data and demanded a ransom to unlock it.

But the ransom demand was just a smoke screen for a far more invasive attack that stole employee credentials. With those credentials in hand, hackers could have run free through the company’s computer network, taking confidential information or destroying machines.

To continue reading: A Cyberattack ‘the World Isn’t Ready For’

The Anti-Diesel Jihad Expands, by Eric Peters

The government is bent on destroying fuel-efficient diesel engines in favor of less efficient and more environmentally destructive electric cars. From Eric Peters at theburningplatform.com:

For reasons that aren’t inscrutable (give me a minute – I’ll explain) the jihad against diesels  is metastasizing to include FiatChrysler.

The combine – which subsumes the Jeep and Ram truck brands – has been accused of selling diesels that emit “as much as 20 times” the maximum allowable quantity of an exhaust byproduct, oxides of nitrogen (NOx).

This is exactly what got VW nailed to the cross. And it’s exactly the same demagogic coverage. “As much as 20 times” the allowable maximum!

Good god, it sounds apocalyptic! A lung-melting catastrophe!

Except of course it’s not.

A bureaucratic standard may have been affronted – that is all.

Note the “as much as . . .” verbiage. As in, could be – or might be. As opposed to something exact.

Weasel words, the sort of copy an advertising shyster would use to hawk a product that didn’t actually do a damned thing but the words implied it did because it might. It is of a piece with third-empty cereal boxes – the box itself meant to make you think you are getting what you just paid for.

Only, it’s worse, because in this case there is nothing in the box.

Nothing in whole numbers, that is.

As in the VW crucifixion, the standard affronted amounts to a difference of less than half of one percent. If you don’t know this, you don’t know your Tiers and Bins – EPA-speak for the various levels and thresholds for allowable exhaust emissions. The difference between one Tier and Bin and the next is fractional.

I bold this out of exasperation.Because it is never explained by the media. Search for yourself and see. It is outrageous, a monstrous dereliction of duty. Because with explanation, without qualification, the “as much as 20 times” business creates an egregiously false impression.

People have been grossly misled about misled about the extent to which new cars do not pollute. The whole aim of practical politics, as H.L. Mencken once said, is to menace the public with dangers – all of them false – so as to instill in them a hysterical fear and make them clamorous to be led to safety.

Exactly so.

To continue reading: The Anti-Diesel Jihad Expands

Vladimir Putin: The Most Powerful Person In The World, by Paul Craig Roberts

Vladimir Putin is a convenient excuse for the US’s self-inflicted woes. From Paul Craig Roberts at paulcraigroberts.com:

It must be wonderful being Vladimir Putin and being the most powerful person on earth. And not even have to say so yourself. The US Democratic Party is saying it for Putin along with the entirety of the Western presstitute media and the CIA and FBI also. The Russian media doesn’t have to brag about Putin’s power. Megyn Kelly, the Western presstitutes, and Western leaders are doing it for them: Putin is so powerful that he is able to place in office his choice for the President of the United States.

I mean, Wow! What power! Americans are simply out of the game. Americans, despite a massive intelligence budget and 16 separate intelligence services plus those of its NATO vassals, are no match whatsoever for Vladimir Putin.

I mean, really! What is the CIA for? What is the NSA for? What are the rest of them for? Americans would do better to close down these incompetent, but expensive, “intelligence services” and pay the money to Putin as a bribe not to select our president. Maybe the CIA should get down on its knees and beg Putin to stop electing the President of the United States. I mean, how humuiliating. I can hardly stand it. I thought we are the “world’s sole superpower, the uni-power, the exceptional, indispensable people.” It turns out that we are a nothing people, ruled by the President of Russia.

When the Democrats, CIA, and media decided to launch their PR campaign against Trump, they didn’t realize how inconsequential it would make the United States appear by putting American democracy into Putin’s pocket. What were they thinking? They weren’t. They were fixated on making sure Trump did not endanger the massive military/security complex budget by restoring normal relations with Russia.

There is no sign that American leadership in any area is actually capable of thought. Consider Wall Street and corporate leadership. To boost share prices Wall Street forced all corporations to desert their home country and move the production of goods and services sold to Americans offshore to where labor and regulatory costs were lower. The lower costs raised profits and share prices. Wall Street threatened resistant corporations with takeovers of the companies if they refused to move abroad in order to increase their profits.

To continue reading: Vladimir Putin: The Most Powerful Person In The World

Record “Wealth” in America: 72% of US businesses are NOT profitable, by Simon Black

Debt-fueled asset appreciation, not business profitability, has been behind the increases in “wealth” since the financial crisis of 2008-2009. From Simon Black at sovereignman.com:

The Federal Reserve in the United States just released a new report showing that “Total Household Wealth” in the United States has reached a record $94.8 trillion.

That’s an impressive figure.

Even more impressive is that Total Household Wealth has increased by $40 trillion since the lows of the Great Recession in 2009.

No doubt there’s probably a multitude of central bankers and bureaucrats toasting their success in having engineered such magnificent prosperity.

And it’s certainly an achievement worth celebrating. As long as you don’t look too closely at the data.

Total Household Wealth is exactly what it sounds like– the total net worth of every person in the United States, from Bill Gates down to the youngest newborn baby.

So when you add up all the 330+ million folks in the Land of the Free and tally up their combined net worth, the total is $94 trillion.

The thing is that the VAST majority of that wealth, especially the incredible growth over the last 8 years, has been from increases in just two asset classes: real estate and the stock market.

In fact, stocks and real estate alone account for roughly 2/3 of the wealth increase since 2009.

I’ll come back to that in a moment.

Now, simultaneously, we see plenty of other interesting data, also published by the Federal Reserve and US federal government.

Both the Fed and Census Bureau, for example, tell us that over 80% of businesses in the US are “nonemployer” companies, i.e. businesses which only employ one person (the owner), and often provide his/her primary source of income.

Yet according to the Federal Reserve, only 35% of these small businesses are profitable. Most are operating at a loss.

In other words, only 35% of the companies which make up 80% of American businesses are profitable.

You’re probably already doing the arithmetic– this means that a whopping 72% of all US businesses are NOT profitable.

That hardly sounds like record wealth to me.

To continue reading: Record “Wealth” in America: 72% of US businesses are NOT profitable

 

The Sideshow That Never Leaves Town, by Butler Shaffer

Many of us have been trained to serve the state, and the training becomes more ingrained and pervasive with the young. From Butler Shaffer at lewrockwell.com:

“There is nothing more frightening than active ignorance.” 

– Wolfgang von Goethe                

Growing up in Nebraska, I was delighted each September, when the State Fair opened. I enjoyed walking the midway – accompanied by the spirit of P.T. Barnum – listening to sideshow barkers peddling their shows for “just ten cents, one thin dime.” Bearded and tattooed ladies, two-headed calves, and fortune-tellers were among the offerings.

With last week’s closing of the Ringling Brothers, Barnum and Bailey Circus, a significant part of American culture has disappeared: circuses and carnivals. With the exception of 1950s era network television circuses, these extravaganzas were largely performed at the local level, abetted by the main street circus parades that brought us downtown and enticed us out to the circus grounds. With network television bringing so many of our demands for entertainment to the national level, traveling circuses, carnivals, and fairground midways have largely disappeared; although the sideshows have not. Freak shows have gravitated to television news networks, with anchors tantalizing us with the “breaking news” of assorted cranks and misfits waiting to challenge the suspension of our intelligence. “See the lady who can speak endlessly without saying anything;” or, “see the SUV that will bring the world to an end;” or “see the lady carrying a severed head.” H.L. Mencken was prophetic – as usual – in labeling politics as a “circus”, and a “carnival of buncombe.”

My understanding of history has led me to the view that Western Civilization is in its final stages. The structuring and regulation of life-sustaining processes have proved as fatal to our culture as cutting off a bird’s wings would seal its fate. To forcibly deprive individuals of their self-directed, self-interested nature in order to serve some mythical collective, has brought us to where we are. Beneficiaries of this herd-oriented mindset are institutional interests with a highly-concentrated presence that could not be maintained without the coercive force of the state restraining the development of competitive alternatives that would arise in a free market. Those interested in seeing how the business system has benefitted from this economic structuring, are invited to read my book In Restraint of Trade: The Business Campaign Against Competition, 1918-1938.

To continue reading: The Sideshow That Never Leaves Town