Anti-Capitalism Never Made Much Sense
Amazon fulfillment center, Madrid, Spain
I find it weird that anti-capitalists focus on companies like Disney, Facebook, Google, Microsoft, Apple, and Amazon and not the multinational conglomerates. Let’s focus on each one individually, shall we?
Disney owns something like 25% of all filmed or animated entertainment brands. Sounds like a lot, but entertainment is a luxury good no one actually needs. By being such a well-off system, capitalism in the computer era leads to a lot of leisure time and long lifespans. Mental and physical exhaustion is uncommon, but not truly rare. Escapism is what we spend a lot of our copious free time on. Disney does take advantage of this, raking in the cash off movies, streaming, merch, etc. But what doesn’t Disney own? Oh, that’s right: A company that connects you to the Internet! Or products that connect to the Internet!
While Amazon has the Fire Stick and some low-tier tablets (I’ll get to that company shortly,) I’m not talking about Amazon. It is mostly a consumer products seller. No, I’m talking about AT&T and Sony. AT&T, for those unaware, bought Time Warner a little bit ago. Time Warner, if you’re not up to date on corporate holdings, owns DC Comics, Hanna Barbera (Looney Tunes and Cartoon Network,) HBO, and every movie Warner Brothers has ever released. And, at one point, AOL and the Huffington Post. (Hilarious.) Notice the issue? AT&T was that big telephone company whose monopoly (which the government allowed for decades) had to be broken up by the federal government in the 1980s. These days, AT&T is one of the largest cell phone service providers in the world. Not only does AT&T own one of the largest streaming services around, HBO Max, but own a way to connect to it. I am not an anti-capitalist by any stretch of the imagination, but this seems like a more questionable set up than owning Marvel, Stars Wars, Pixar, and all the movies and television shows 20th Century Fox ever released. Rife for abuse.
Sony, for any movie buff, owns Sony Pictures and Columbia Pictures, which used to be an American company that has a history in Hollywood dating all the way back to the Golden Age. Sony is primarily a consumer electronics company. If you’ve ever seen a Sony-produced movie in the last two decades or so, you might notice the insane level of Sony product placement porn. Most prevalent of all in the Spider-Man pictures. Free advertising is free advertising, but most film studios get paid to do that. While Sony has had limited success entering into the cell phone marketplace (much like Microsoft,) it doesn’t mean it doesn’t have a lot of fingers in a lot of pies. Video games, video game consoles, portable video game systems, desktops, laptops, headphones, televisions, portable music players, speakers, a recording label, an animation studio, etc. Owning the product and the means to watch it. Once again, a questionable formulation.
This doesn’t make AT&T or Sony monopolies in the true sense of the word, just that they are more open to abuse and ethical qualms than Disney is. These are all luxury goods I’m talkin’ about here. This is not energy or the water supply. This doesn’t make Disney good either, but it also doesn’t make Disney a monopoly. The primary goal of any business in a capitalistic economy is to make money, especially for its shareholders. Disney does that in spades when movie theaters and its parks aren’t closed due to a global pandemic.
But let’s move on.
Facebook owns a lot of things. Most of those things are social media brands or companies. Of all of them, I barely use them outside of Instagram1, likely because I am not a teenage girl or a grandmother. I’m not the target demographic. Facebook, beyond social networks, owns a VR video game company for the Oculus Rift peripheral and a YouTube competitor that got them into a load of trouble a few years ago that’s basically just Facebook video. To be brief about that last part, Facebook greatly exaggerated (i.e., lied) about its internal viewer numbers for videos posted to Facebook, which, once this was exposed, led to a massive amount of unemployment for a lot of companies. This included Internet media operations and some YouTube creators who were enticed to post videos on Facebook first or at the same time as their YouTube ones. The reason I even know about this was due to Glove and Boots, a puppetry comedy skit YouTube page.
Those guys got screwed by Facebook. But, moving on…
Facebook, like Twitter, is a luxury good no one actually needs. Yes, entertainment companies and celebrities can use it to manage their brand, but that’s not what anyone would call necessary like crops or oil. Facebook may want to come out with a cell phone or other consumer hardware/software, but Mark seems to be sticking to what he knows: How people think. Yes, somewhat terrifying outside of context, but that’s how he made all his money.
Google is primarily a company built around the world’s most popular search engine. Google Search is still a ridiculous amount of Alphabet’s annual revenue. Yes, I don’t like the name change either. It also owns my favorite streaming service: YouTube. I am fluent in YouTube, just like I am in memes. I love it so. Google has broken ground in various other markets, such as computer software and an Internet browser. Google Chrome was the David to finally knock the Goliath of Internet Explorer off its perch as the number one Internet browser in the world. The young finally outnumbered the old and the stodgy business types who still default to making their websites work only on Internet Explorer (although, this is changing, least of which is that Microsoft is seemingly replacing it with Microsoft Edge.) Google makes innovative and intuitive software. Not a monopoly as each of Google’s products have copious competitors. Some of which are owned by the other companies I’ve already mentioned or will mention shortly. Google does not own a cell service provider or a hardware company. Google instead gives their largely open-source software out for free to hardware companies and end consumers as a means of bringing people to the websites and services that make Google most of its money. YouTube probably doesn’t even make Google all that much cash. In the end, Google is basically a more profitable and less elitist version of Linux.
Microsoft is the leading personal computer software brand in the world. From the humble beginnings in his (well-off) parents’ garage, Bill Gates would build a business empire that would truly change the world for the better. Microsoft makes most of its money as the primary computer software for business. Apple may be popular with the creative types on the West Coast and the occasional “acts smarter than they really are” college student, but Microsoft has basically everyone else. That’s known as market capture, and it makes Microsoft so much money almost passively. Like the Coca-Cola of computer software. Coca-Cola, while top dog, doesn’t even really own that much outside of soda and other non-alcoholic beverages. Pepsi actually owns a lot more. Frito-Lay? That’s a Pepsi company. And that includes most things you find in the chip aisle, even if you don’t realize it. I trusted you, Miss Vickie’s! Pepsi even owned Pizza Hut, Taco Bell, and KFC before spinning off its restaurant holdings to Yum! Brands after Coca-Cola smartly approached the non-Pepsi-owned restaurants and told them go with us for your beverage needs or you’re putting money in your competitors’ pockets. Hell, Pillsbury even owned Burger King at one point.
Microsoft owns Xbox, but most of its consumer electronics holdings lose Microsoft money, much like Google’s ventures that isn’t its search engine. Microsoft sold the original Xbox console at a loss to the tune of $50 to $100 on every unit sold in the early days. It was an aggressive market strategy that eventually paid off. Its second console likely won its console generation after the PS2 kicked the original Xbox and the Nintendo GameCube (my personal favorite video game console of all time) right in the teeth. The Windows phone was discontinued the same year Microsoft paid likely millions to Blumhouse to be the primary product placement in Get Out. It didn’t help that the protagonist’s phone in the movie died almost immediately after being unplugged multiple times. I feel like Jordan Peele did that on purpose. Microsoft, like Google, has mostly one product with the occasional diversification. We haven’t even gotten a live action Halo or animated Minecraft (Microsoft bought that from notch for billions a few years ago) movie yet!
Apple is basically hipster Microsoft, but makes all of its hardware in-house. Microsoft makes the software and leaves the hardware decisions to companies like Dell and HP. Apple manages to pull off a near 50% profit margin by not only making everything itself but also insanely marking up the price tag for virtually everything it sells. An Apple executive once said he couldn’t make a $500 computer if he tried. That’s because while Apple probably could sell an Apple computer for that amount, a $500 computer would kill their brand, which is all about being premium. Even if it really isn’t. I’m writing this on an Alienware desktop right now. Which, as a beefy boy with all the bells and whistles outside of a premium monitor (didn’t really see the point,) all together was still less than a bargain basement new Apple laptop with zero premium features or software. iTunes is the prevalent MP3 purchasing platform, although Amazon has a pretty good one, due to Apple Music being the main way most people listen to music outside of Spotify and YouTube. I don’t know the numbers, only my preference as a music buff. I buy most of my digital music on iTunes because I like to own my music and not depend on the Internet being good to listen to my tunes. I have an iPhone as my only physical Apple product outside of AirPods I got as a gift and other iPhone-related peripherals like headphones and chargers. Building my library on iTunes and listening to Apple Music just makes sense. Amazon’s music service, while not terrible, is not really considered the most intuitive.
Amazon (I got there eventually, those waiting on bated breath for it) is the premier consumer products seller in the world. Everything from action figures to milk, now that Amazon owns Whole Foods, delivered to you within hours or days, depending on perishability and/or shipping speed chosen at checkout. Starting out as an Internet book marketplace, Amazon now basically sells everything. It even has brands such as Amazon Basic, an office supplies brand. Jeff Bezos is easily one of the greatest businessmen in the history of capitalism. Like Bill Gates, I don’t agree with his opinions on world events, but he is a business genius. While Amazon is a titan, it is not the only place to buy stuff. It is just usually the most convenient or cheapest (and sometimes both.) Want an action figure? eBay might be cheaper. Want a bag of chips? Wal-Mart is almost certainly cheaper and faster if you go to the store. In the pandemic, Wal-Mart (other grocery stores are available) might even bring it right to your car! Yes, Amazon now does movies, various electronics products, and streaming at this point, but even though Amazon Prime is in over 80% of U.S. households, it does not have market capture in the way you’d think. Because Amazon Prime Video is a free bonus for Amazon Prime’s free two-day shipping of any product sold or guaranteed by Amazon, a lot of people forget to download the Prime Video app or use it. They’re mostly paying that annual or monthly fee for the free two-day shipping.
Multinational conglomerates own a lot of companies in a variety of industries, sometimes a market capture in a particular industry without most people realizing it. While there are a lot of laundry detergents brands, you will notice a good chunk of them are owned by the same few companies. Same with cereal, condiment, salad dressing, canned goods, and pasta brands. Just be aware of this and make informed decisions if you don’t like certain companies. The brand might be coming from inside the house!
As a closing point, there’s a reason most sane people want to keep Huawei out of America’s telecommunications grid. Why? The Chinese government. Obviously.
- I have a humorous action figure photography Instagram. You can find it here. I usually post the pictures to Twitter around the same time, so be sure to follow me on Twitter as well, where you will see a snapshot of my brain at any point in time. Hell, the opening sentence of this article was nearly lifted word for word from a Tweet I sent out right before I got out of bed in the morning I wrote this article. Gotta promote my brand!
You could have made a lot of you point with a few links to these kinds of images.Report
There are very few anti capitalists. Mostly what you hear are people who are critical of some aspects of how The Big C works here and in the west. Peeps who advocate buying responsibly or ethical consumption are capitalists they just usually don’t define themselves that way. Also capitalism is such a wide term it doesn’t really tell you that much. My general rule is 90+ percent of everything talking about capitalism or socialism is garbage but I might be a bit low on the estimate.Report
You don’t need a lot of them.
You just need the ones that do exist to be in the right places.Report
They are ranting on Twitter. Poised like the stealthy tree sloth to pounce and devour any capitalism that comes within reach. The revolution is at hand or clawed foot I guess.Report
“They’re only changing a couple of policies. I don’t see what the big deal is. Those policies were bad and needed to be changed anyway! Also, the Slippery Slope is a fallacy.”Report
Why yes SS is a fallacy. Glad you read the first couple chapters of an undergrad intro to logic textbook. Behold all the anti capitalist policies being passed. Like……. Um….. Yeah that.. UmmmReport
I pretty much agree with you. The way I see this fight is muilti-fold though and possibly saying more about personal psychology and aesthetics of the participants than anything else.
1. There is a large section of right-leaning people from libertarians going on right-wing who still occupy a world where Reagan is hailed as the conquering hero and anything less than the Reaganite view on markets/business is concerning and signs that the Eastern Bloc will resurrect itself at the push of a button like the Simpsons joke. I can’t tell if it is out of sincere belief or cynical action but this group does seem to think that the new crowd of people calling themselves “socialists” are the second coming of Clause IV of the Labour Party or much worse. Personally, I have my doubts about how many of the new socialists could tell you what Clause IV was. For the people who I think should know better, I suspect sincerity. A lot of this also includes the political equivalent of a middle-aged crisis because you have well, lots of middle-aged people who are shocked that today’s youth does not think Reagan and his crowd are the bee’s knees.
2. As you said, socialism has become a term that is void for vaugness and being overbroad. I think a lot of people calling themselves “socialist” these days is a reaction to the long-standing right-wing tendency to call anything left of the Koch Brothers/pure anarcho-capitalism “socialist.” The other part is the descriptions are all over the map. As far as I am concerned, most people who call themselves “socialist” these days are more like old New Deal liberals who wanted a welfare state combined with heavy regulations on businesses to make sure nothing goes off the rails because of greed. But there are enough people who really do mean they wanted to burn every part of the current economy down to the ground and start again to do some great nutpicking. Said group has no political power but are very loud on the internet.Report
Yeah. Lots of people want policies like the notorious commie hell hole of Norway.Report
I’ve witnessed something really interesting in the last few years, really starting back in 2010, but at a much faster pace since 2016/17: a lot of people, young and old, beginning to call themselves socialists, with no real awareness of what that might mean (it could mean many things, obviously). Through engagement, then, with leftists online and off, they begin to develop a knowledge of socialism in all its complexities, begin to develop tendencies, etc. It’s fascinating to watch, because for so much of my lifetime, the people who became leftists largely did so by learning about socialism and then deciding to call themselves socialists, i.e., for as long as I’ve been paying attention, it usually happened the other way around.
So yes, I think a combination of the right calling everything socialist, along with the abject failures of the Democratic party, has caused people to decide they don’t want to be associated with “liberalism,” while at the same time minimizing the fear of being associated with “socialism” that’s been so prevalent here since the dawn of the Cold War.
I find all of this very exciting, and have really enjoyed watching people here locally go on this journey and become very active politically as a result.Report
Also, those kids who’ve been reading Marx and Debs and Angela Davis and Adorno and the Combahee River Collective and Alex Vitale for a year or two, and block walking for local and national issues pretty much every weekend even in a pandemic, have even less time for posts like this that fail to engage anything leftists are actually saying than I do, which is too their credit.Report
I do think the 2008-2010 fiscal crisis and long recession had a large part to do with it along with Obama’s failure at recognizing the Republican right-wing for what they were.* That being said, I do sense a fair amount of inchoateness in how people describe socialism especially in determining what is a big business they hate and what is a big business they like. There is also an unfortunate tendency to make :”small, independent business” a synonym for “local retail establishment/cafe/bakery/bar/restaurant with a shabby chic vibe that gives me warm fuzzies” and not think of the local dentist or accountant as a small business.
But I seem to see a lot of people whose ideal community has all the coziness of the shire and all the coneniences/options of a major, international metropolis like NYC or London.Report
I don’t know folks on the left who like big business in any form.
The local business thing is a big point of debate within socialism, in its current American form and traditionally. Lots of anarchists/syndicalists/other co-op type folks who are really into the idea of local businesses, but I think pretty much all of them recognize how reactionary local business owners tend to be in the aggregate.
Also, while I occasionally pine for a time when in any interaction I had with leftists, online or off, I knew that the person had read Benjamin extensively, or could recall intricate details about the meetings of obscure Bolsheviks in 1918, it’s exhilarating to watch energy pour into the left, even if a lot of the people joining now don’t have fully formed ideas about complex social, cultural, and economic systems quite yet. The existing leftists groups they’re joining are going all in on education, so that someday soon perhaps they will.Report
Worker’s cooperatives can work but in my experience, they tend to get pretty typical in corporate structure as they get bigger. Small business owners are historically among the most reactionary (about the only time I hear right-wing radio or news in SF is in small businesses/restaurants).
But there is absolutely a kind of middle-class or above person on the broad left with vague visions of William Morris/artsy/boho socialism in their heads without realizing its limitations.Report
I’m, erm, less confident in modern education resulting in self-declared socialists reading 100 year old theory than others.Report
I see it happening at least once a month (when a local group I’m a member of holds online education sessions… used to be offline, but I think online actually works much better).
Also, I started a Capital reading group 3 years ago, and opened it to anyone, but the response was so great we had to break it up into several reading groups. The hunger for knowledge of the left is strong among the young’uns.Report
I’ll take your word for it.Report
Feel free to join us, or someone more local: https://www.cosdsa.org/Report
Hey there’s a Paris Commune discussion tonight!Report
I told ya, they’re learnin’.Report
I don’t know if there are any chapters in Colorado, but since everything’s online today, if you want to go with a group that is smaller (and international), but that is all about political education, the Platypus Affiliated Society hosts a ton of really good talks and panels. Just have to ignore anything Cutrone says.Report
Forgot my asterisk.
The Democratic Party, to its credit, seems to have largely learned the lessons from the Obama and Trump years. Even Chuck Schumer who is proving to be an effective majority leader because being a minority leader is a thankless task where everyone beats you up. I was apprehensive on Biden in the primaries but he has proven himself to the task and his governing record is fairly progressive so far. There were some missteps like last Friday’s announcement on the refugee cap but the admin quickly reverse course after pushback.
We still have a Manchin/Sinema problem though.Report
The idea that the Democratic Party is failure is an article of faith among Republicans and the online Left but isn’t really believed among most Democratic Party members.Report
I think that the current form of “Socialism” has less to do with stuff like “Strong Social Safety Nets” and more to do with the redistribution of positional goods.
And that’s going to get disappointing in a hurry.
That said, the excesses of Capitalism were not even close to being reigned in by Capitalists. The pendulum swinging back was to be expected.
I’m just going to be irritated when I hear that “well, that wasn’t *REAL* socialism” about whatever the hell it is that is going to be instituted.Report
I think you’d be surprised at how many of the current breed of socialists are social democrats who really do want a strong, comprehensive social welfare system that, to be sure, redistributes wealth a great deal, but does so to vastly improve the quality of life of most people.
Granted, I hope many of those people realize just how strongly the current system militates against even that relatively modest change, and that even if such change were possible under current conditions, they would be insufficient to accomplish most of their political goals, but I’m not in a hurry.Report
*I* want a strong, comprehensive social welfare system that vastly improves the quality of life of most people.
My problem is that I know that that won’t look anything *NEAR* like “pretty much what we have now, only cheaper” or “pretty much what that other guy has, only cheaper” and that has me saying “yeah… those folks aren’t going to enjoy what they end up with”.
But, sure. Let’s give it a shot. The quicker we get to “well, that wasn’t *REAL* socialism”, the better.
(When it comes to the pushback against even relatively modest changes, I am consistently surprised at the amount of NIMBYism and the extent of people’s yards.)Report
I’m sure a medical system free of cost (at the point of care), a system that gives power more financial security and more control over their workplace, that greatly decreases barriers to all kinds and all levels of quality education, guaranteed quality housing, reliable and convenient public transportation, etc., won’t have the effects on quality of life that large-scale social democracy has elsewhere, but I can’t think of why.Report
It’s like cold fusion. We’re just 20 years away!
That program we instituted a couple years back that made it through committee? That wasn’t *REAL* socialism.Report
It’s funny, you hear the “that wasn’t real socialism” thing both from libertarians/reactionaries as a criticism of the left, and liberals as a half-hearted defense of the left, but you almost never hear it from leftists, and never from educated (in leftism, not necessarily formally educated) leftists. In fact, if you listen to any conversation about the state of leftism between leftists, since the mid-50s (if not earlier : think the political-intellectual break between Sartre on the one hand and Camus and Merleau-Ponty on the other), you will hear them confronting both what happened between the Bolshevik Revolution (and during it), and what then came over the next decade, and also the bigger issue, Stalin and Stalinism, and what it means for Marxism, for communism, and for socialism more generally. Much of contemporary Western Marxism is specifically a response to the extremes of anti-Communism on the far right (e.g., in Nazism) and left wing authoritarianism. Far from saying, “those aren’t the same thing,” they work to make sure that, even if they view authoritarian communism as a betrayal of the principles of Marxism/communism/whatever, whatever social changes they seek won’t lead to them again.Report
both from libertarians/reactionaries as a criticism of the left, and liberals as a half-hearted defense of the left, but you almost never hear it from leftists
It’s true that I haven’t argued this stuff in earnest since the oughts but “that wasn’t real Socialism” was still alive and well 15 years ago. Even now, defenses of Stalin include “what about the East India Trading Company?” (granted, this is on twitter and we all know that there is no shortage of people arguing things that nobody is arguing on there).
Far from saying, “those aren’t the same thing,” they work to make sure that, even if they view authoritarian communism as a betrayal of the principles of Marxism/communism/whatever, whatever social changes they seek won’t lead to them again.
I would be entranced to have a conversation about this because this is so very far from my experience.
I guess I’m still stuck in the mode where I am used to arguing with people who explain that Stalinism wasn’t *REAL* Marxism but still get irritated when they get asked if they’d have thought it was close enough for jazz contemporarily.Report
A nationalized health service, lets call it NHS for short, is always 20 years away?
Its less like cold fusion, and more like, America has kerosene lanterns and the rest of the civilized world has LED lights.
But here, “elec-tricity” is always 20 years away, and always an outlandish impossibility.
Because multiculturalism, or something.Report
Erm, no Chip.
Here, I’ll copy and paste what I said again:
We argued this a million years ago and we can do so again. Given that we have a price problem we will need to either manage demand downward or somehow increase the supply of health care and, for some reason, the solution that people always want to discuss is “we need more efficient administration!”
When the problem is a price problem.
Anyway, I am reconciled to the fact that we’re going to have something like an NHS.
But it’ll be a lot closer to what I imagine that means in practice than something a lot like what we have now, only “free”.
We’re going to have multiple tiers of health care. And pretty much every tier but the top two will be considered either “one of the crappy ones” or “the crappy one”.
I imagine that hoarders and wreckers will be blamed for this.Report
Why do you guys always describe such banal and ordinary things like national health care, gun control, and public housing, things that exist everywhere in the world but here, in such bizarre hypotheticals?
Again, its like you’re issuing dark warnings about what might happen if we allow fluoride to be added to the public water, or if we allow horseless carriages to be ridden down the streets.
Chaos! Disappointment! Dogs and cats living together!
You must know that the things you’re predicting are almost word for word what every conservative has ever said about every advancement, from municipal power to seat belts to same sex marriage.Report
Chip, what I am saying is that Britain’s NHS or the various National Health Services in Europe Proper are not “pretty much what we have now, only cheaper” or “pretty much what that other guy has, only cheaper”.
Yes. It exists over there. But they have made trade-offs.
They include trade-offs that, when I have suggested them in the past, you have pushed back against (e.g., an FDA that has a risk model much more like the EMA’s).
I am not arguing “THIS WILL NEVER HAPPEN!”
I am arguing “it’s not going to be like you imagine it’ll be”. It’ll be like what they have in Europe. Only worse.Report
If we revoke our drug laws, it won’t be like what they have in Amsterdam.
There will be tradeoffs, costs, unexpected consequences.
It will be like what they have in Amsterdam. Only worse.
Which is a fine argument, unless someone asks, “How do you know this, Chip?”Report
Chip, believe it or not, I actually wrote a post about how I didn’t know what a Legal Marijuana America would look like! And, get this, I saw my not knowing what that looked like as *A PROBLEM ON MY PART*.
So when you say “There will be tradeoffs, costs, unexpected consequences”, I am 100% down with that!
I’d like to discuss what they are!
You know what I don’t want to do?
In response to someone saying “there will be tradeoffs”, asking why they think that legalizing marijuana is impossible.
Colorado legalized recreational marijuana, you know.Report
“Why do you guys always describe such banal and ordinary things like national health care, gun control, and public housing, things that exist everywhere in the world but here, in such bizarre hypotheticals?”
it’s really funny how you make up cool stories where literally everywhere in the world is better than America, and when someone says “yeah it’s not actually like that” you get all huffy and accuse us of insisting that utopia is a bizarre hypotheticalReport
A lot of the new self-referred socialists are really just New Deal/Great Society liberals. The reason why they started adopting the term socialsit seems to be mainly a reaction against the Right denouncing everything to the left of them as socialist like you point out. They are also associating capitalism with a lot of things they hate. Many of them seem to be frustrated educated people or artists that don’t like how they are doing economically and want something where they have greater access to the pie.Report
My observation about 5 years ago was they were trying to describe Venezuela’s policies as Northern Europe’s.
Hmm… looking over the Democratic Socialists’ website (AOC and Bernie’s group), I see they’ve removed the part about “true socialism has never been tried”, “the workers should own all big companies”, and rest of their central planning planks.
That leaves them with Green New Deal, worker’s unions, and Medicare for all. Apparently they have no position on who should own/run business (or economics in general) or Venezuela and the other communist experiments.
Their wiki still has their 2016 statements of support for Venezuela and how their economic collapse was the fault of the US.Report
but entertainment is a luxury good no one actually needs.
Huh…Report
I can’t tell whether this post is a spoof or not, so “Huh” is the best I can do.Report
I think it is sincere.Report
Most of the shrieks about cursing and decrying “capitalism” are using a definition of “capitalism” so malleable and changeable as to be meaningless.
Most of the time they’re not particularly interested in abolishing private property, profit motive or establishing state ownership of the means of production; by and large they just want capitalism but with more environmentalism; or more identity politics, or more state safety nets. Newsflash: the Scandinavian nations are capitalist- in some respects like business regulation they’re more capitalist than we are in North America.Report
Cue the meme of the two guys arguing over whether Norway is capitalist of socialist.Report
Most of the shrieks are less about Capitalism, and more about Capitalists, because as they say, no one hates Capitalism more than Capitalists.Report
Who are you defining as capitalists here? Upper-middle class professionals with liberal politics? Bari Weiss’ substack Penthouse forum just ran a screed from a guy who was deeply upset that he was paying 54K for private school tuition and his daughter was coming home with “woke” ideas.* There seem to be lots of finance bros who make lots of money who get deeply upset and defensive when anyone offers even the slightest critiques of their fortunes and who they achieved their fortunes.**
*Though it was amusing to see how quickly the Internet was able to find the guy’s resume and tear it to shreds because he was on the outer edges of the elite finance world and VP at HSBC is like one promotion level up for junior analyst.
*That being said, COVID and working from home seems to have taken some sheen on working in I-banking because it is all the hours (perhaps more) without the ability to go out and blow steam and party like a 23-25 year old with too much money.Report
Capitalists being the titans of business, who extol the virtues of competition while doing everything they can to get government to limit or eliminate the competition for them.Report
But with the right politicians in power, they won’t be captured or even capturable!Report
The capitalists who Oscar describe above fund think tanks filled with true sincere believers in capitalism and competition while also funding politicians who will give them a leg up.Report
What we need to do is just get the right politicians in power.
Then we’ll be able to establish a system that won’t have to rely on which politicians are in power!Report
Ah those people! I agree! The problem is that a lot of libertarians and right-wingers get funded by this crowd and are aware that said titans of business can cut off the trough at anytime.* So they focus all their hate on upper-middle class liberal professional middle-managers with some mild critiques of business.
*Though they seem deeply upset that corporations did not like the Georgia voting bill.Report
I largely agree but there are enough nuts out there who are loud on the internet that nutpicking is easy and these people do mean Clause IV socialism or what not. I also have to concede that a fair number of people I know and observe seem to think that “socialism” means “And I will never have to work a crappy day job again and everyone who wants it will be given a perpetual MacArthur grant.” But it is important to understand, why socialism has become a description again. I was at a fairly lefty college in 1998-2002. A lot of people I knew back then basically had the politics you describe above but almost no one used the term “socialist.” The emergence after the 2008 crisis/long recession is interesting. And I do think it is because the right-wing has been getting more and more stubborn at arguing that only anarcho-capitalism is acceptable and getting massively upset that Reagan is no longer the bee’s knees.Report
Well sure, but that GOP you’re describing is, itself, utterly imploding. Meanwhile Uncle Joe is stealing all Trumps most useful heresies and using them like the liberal ideas they are.
A lot hinges on what happens next. If Joe can steer most of the energy this MMT phenomena is generating into infrastructure and things that will yield compounding benefits in the future then people will be talking about carving him onto Mount Rushmore. If all this just turns into bloated bureaucracy, props up the obscenities of University administrations and leads to stagflation then he’ll be the next socialist Satan and, while Reaganism itself may not come back, then something that rhymes with it will.Report
“There is a lot of ruin” in a political party. I doubt that the GOP will suffer a whig style collapse and the Democratic Party still has a huge problem of states like Ohio, West Virginia, et al. being filled with older, less educated, white voters filled with cultural resentments. Manchin is the best we can hope for from West Virginia and when he goes, we can probably kiss that seat goodbye for a generation.
My pessimistic view is that we have 20-30 more years of the current GOP mantra’s of “conservatism can’t fail, it can only be failed. tax cuts, tax cuts, tax cuts, own the libs.”Report
Oh I don’t think they’ll go the way of the whigs, but they’re changing dramatically. I honestly have no fishing clue what they’ll look like by, say, the next Presidential election. Pretty exciting!Report
If you said “changing”, I would agree.Report
Elizabeth Warren who seems to be a great bete noire for the libertarians and the right wing considers herself a capitalist, not a socialist. Bernie Sanders for all his trademark socialism is more of an old style New Deal liberal. Most people who call themselves socialist these days are probably not against the profit motive but motivated against decades of right-wing/libertarian propaganda that amounted to “anarcho-capitalism without a safety net” or bust.
I do not think there is anything wrong with luxury goods or the profit motive. I will spend way more money than many people on a pair of shoes or a shirt if I think it looks good. I also think the best way to get more affordable housing is to deregulate zoning and build more housing and fully concede and support that “luxury condos” will be built first. That being said, I think there is a government responsibility to regulate large parts of the economy and business in order to protect the common good. This means keeping a watch on the financial sector because that part of the economy has the ability to cause massive layoffs and recessions suddenly. It means environmental regulations and protections for the public health and laws that do not allow management to be too assholish or abusive. There is more to life than consumption of goods and the right-wing thing seems to be about getting everyone to see themselves as a consumer and forger about human autonomy and dignity.Report
Welcome to being a Democratic Socialist.
We have comfy chairs.Report
You guys need to get some economics textbooks to read while you sit in those chairs.Report
The ones that say you can develop rational systems to explain the actions of irrational human beings? Those text books?Report
It’s fascinating how ignorance shields itself from exposure to knowledge with rationalizations like this. This is roughly on the same intellectual level as “My grandpappy weren’t no monkey!”Report
I have three drinking buddies who are practicing academic economists. We talk regularly about all this. They generally agree that economic is trying to make the rational out of the irrational.
Nice try.Report
There’s nothing wrong with capitalism that hanging everyone responsible for the collapse of 2008 wouldn’t cure.Report
I honestly don’t think you’d need to hang more than 20 of them.Report
We’ve seen what happens when you err on the side of measures that are too small…Report
And hanging the correct ones, rather than the employees offered up as sacrifice.Report
So, not a fan of “Hang them all and let God sort it out”?Report
More a cynic that trusts the guilty parties will find a way to slither away from the torch wielding mob while letting the staff suffer their ire.Report
One of Cain’s Laws™ says that any situation where it is easier to get rich by manipulating financial paper than by managing the underlying productive resources will end badly. Banks and bank-like entities are a necessary evil. They ought to be taxed and regulated so that it is REALLY hard to get wealthy that way.Report
I would argue that a huge chunk of what banks do should just literally be done by the government.
To start with, they should operate any part where there’s no risk. Checking accounts, savings accounts (I.e., buying part of the debt, like how CDs work now.), any sort of financial transactions like a debt card system (People forget the government already operates one of those for ‘food stamps’.), online payments, everything.
Additionally, the government should operate any part where there is a risk, but it’s risk they are already taking on. There’s no actual reason for them to resell loans to anyone. Student loans, FHA mortgages, etc. If the Federal government is the entity making the loan, or authorizing it to be made, they should keep that loan. This idea we should ‘get it off the books’ by selling it to the private sector is nonsense, and honestly just a way for companies to make money via outsourcing their loan origination to the government.
I would also argue for some sort of small payday loan system, where people can get advances on paychecks at fairly reasonable interest rates…in fact, I’d like to see that be fairly automatic with overdrafts.
Private industry should only step in where there is some large variable risk to be appraised, like mortgages and loans outside the system, or actual investments, or real credit cards.
…but wait, you ask. Where were banks get money to lend out? And I ask: Have you become trapped inside the movie It’s a Wonderful Life?Report
With respect buddy, that’s nuts. you start out saying the Feds should take on banking stuff where there’s no risk, then you go on to say that they should also take on stuff where there’s moderate risk (checking accounts, overdraft protection, student loans), and finally add that you think they should also run operations in areas with enormous risk like payday lending. Just a mild reminder that payday lending is not a very profitable line of business. Those eyeball popping interest rates pay for a huge amount of defaults. Wherever localities have banned the high interest rates and fees- the payday lenders have just folded up shop.
The services you’re talking about having the Feds offer would either be an absolutely epic sucking black hole of lost money (in simple risk returns alone, but if you add in the innate characteristics of public service employees doing this stuff, holy fish that’s a lot of lost money) or the services would be so narrowly construed as to functionally not be available to anyone.Report
He believes that “payday loans operated by the government” would actually work more like an advance on your weekly paycheck. Since the government operates the “bank” (actually a depository service) where your paycheck goes, they can just take the advance back out before putting the rest into your account.
“What if I don’t use the government bank?” ho, ho, ho, it’ll be illegal not to, remember how the PPACA worked?Report
Gosh I hope that’s not what he has in mind. All of the developed west has privately operated financial institutions for good reason.
Err.. though to quibble, I don’t require the PPACA outlawing private insurance. The only vaguely similar policy was they charged you a tax penalty if you were running around uninsured.Report
That ‘good reason’ being: Wealthy people with all the money do not their money in a place the government can see and access it, in case the poors start getting ideas about taxes or even accountability.Report
A reminder, folks: We live in a world where various states have said people can get paid in _preloaded debit cards_. It’s apparently vitally important we make sure people can get paid into any bank account they want…except, of course, the low-wage workers, who a) might just be handed a payroll debit card and have no choice at all, and b) might not have any sort of minimum balance or be able to pay the fees required for a bank account anyway.
But I guess we have to keep that bank information out of the government’s hands…except for the whole, uh, ‘businesses must file mandatory W4 forms’, stuff…hmmm…so, I guess the government has literally all that anyway…weird to complain about it?
Having a bank account that is your interface with the government does not hurt anything, has major advantages, and the people who are complaining either are, or have fallen for the philosophy for, people who are trying to confuse the government of their monetary situation to avoid taxes.
So, yes, people should be required to use the government bank to collect TAXABLE INCOME. You get paid money that comes in as reported-on-mandatory-W4 income, that money has to be paid into to a government bank account. The account everyone has, that is linked to your tax ID. It’s also the only place you should be able to pay income tax from or get refunds to.
That’s how normal income should…and, yes, I’m aware that some people have income that does not function that way, they sell stuff online or whatever and collect money in Paypal, and I’m not making any rules about that, or saying you can’t get money there. The ‘You have to put income in these government bank accounts’ should be a rule for corporations with a certain amount of employees, not individuals. People can have other bank accounts all they want, they can even transfer their money out immediately, as soon as it comes in, I don’t care.Report
Pssst: The government _already does_ student loans. Already. In the actual world. They just _pretend_ it’s third party called Sallie Mae.
I’m saying they should do the loan servicing too. Instead of selling them. If they can come up with the rules to standardize the risk to sell the loan, they can just accept that risk themselves.
And in what universe do checking accounts, by themselves, have ‘moderate risk’? About the only risk that can exist is the bank accepting bad checks and making the money available too quickly. Which is a trap that is very easy to avoid, especially when a large chunk of the checks are on themselves.
As for overdraft protection _and_ payday advances…they’re the US government. They know where you live. They are where tax refunds go, they are where wages go. You can’t just open a new one.
It’s _really_ goddamn easy to stop people from just wandering off and not repaying them.Report
Yyyyeah so make take payday lenders and Vinnie the loan shark, take the least appealing elements of both of them, combine them, then give that thing the powers of the Federal government and set it loose. What could possibly go wrong?
There’re all kinds of liberal ideas that are at significant risk of losing the government tons of dough while also at least possibly solving some actual problems. We should pursue those instead of the wackadoodle idea of federal retail banking and lending.Report
Would this be a good place in the conversation to note the actual existing examples of government-run banks?Report
Feel free, make sure it’s a place where the government run bank is also, by law, the only bank permitted in the country since that’s the proposal on the table.Report
Switzerland?
So we just need to be more like Switzerland.
Why is that so hard?Report
China comes to mind. The obvious risk when banks become an arm of the government is they are forced to support other gov policies to the detriment of money.
For example pension funds are large so activists are often trying to have them disinvest in [whatever]. The problem is this lowers the return on pension funds.Report
When fiduciary duty runs counter to political policy…Report
It’s more like when politicians or activists want a club.
Why invest in oil (global warming), guns, tobacco, countries we dislike, Israel, companies which dislike unions, etc.
California runs into this problem all the time with it’s big gov pension funds.Report
When a NINJA home loan’s thoroughly appalling
And would make an honest underwriter blanch
That’s when the clever fellows come a-calling
And they put it in the 3A-rated tranche
When fiduciary duty’s to be done (to be done)
A defector’s lot is oft the better one (better one)Report
Props!Report
IIRC and a quick google search suggests around half of Swiss banks are owned by public entities and the remainder are privately held.Report
My bad.
I thought the proposal on the table was “a huge chunk of what banks do should just literally be done by the government.”
Outlawing private banks? Nah, this comrade didn’t get that communique.Report
No, at no point have I said that should be the only bank permitted by law.
I said that people should be required to have an account, and that account should be the only way the government accepts or disburses cash. And mid-size and above companies should be required to use that system for paychecks, just like they’re required to issue W-4s.
You keep pretending like I’m saying other banks won’t be allowed to exist, and I have literally no idea where you are getting that from.
The amount of time and effort our government has spent _hooking into_ the existing financial system in this country, with multiple places of trying to find points of access (The IRS, social security, EBT, accepting credit card, and banks transfers and checks, having to issue frickin debit cards, etc) and even having to MAIL PAPER CHECKS to people who it doesn’t know the bank account details of, is almost certainly well above what it would cost to just operate a bank account for literally every taxpayer, hooked to their social security/tax ID number.
HOWEVER, that bank account would, (rather tellingly for the bullshit we put up with from of the banking industry), be basically exactly how much bank _most people_ needed! Whoops!
That’s not the same as barring them, it’s just realizing that 99.999% of people only _need_ one deposit account, and giving everyone one for free, with no fees, that they have to use for certain things, probably means no one will even want another. Especially if the government operates a free payment system for retailers to use that that only talks to them.
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And I love how people keep making up risk. No, actually, bank giving people small loans to current account holders isn’t particularly risky, and you know how we know that?
Because retail banks, right now, literally do that. They call it overdraft protection, and frame it as a fee instead of a loan, but it is a loan.
They use this to make a lot of money. The Federal government doesn’t need to make money there, so they can reduce those ‘fees’ quite a lot…and then reduce it even more, because they don’t have to worry about people just walking away from their account, so the risk is much lower to them than a random bank.
But keep pretending like we don’t actually know these numbers, and it’s all just random risk that could somehow bankrupt the government, because it’s not like there’s an entire branch of accounting that exists to assign monetary values to risk or anything.
And while we’re at it, let’s also pretend that the Federal government could go bankrupt or even be impacted if it ‘loaned’ every single person in the US a full single paycheck of up, let’s say, to $2000 and never got it back, if everyone took that money and just walked away from their account.
The Federal government has literally mailed $3200 worth of free money to everyone in the last year.Report
I am intrigued. Seriously.
Would we be able to deny these accounts to Undocumented Dreamers Who Just Want A Better Life For Themselves And Their Families or does anybody who wants one get to claim one?Report
Well, you have to understand…Report
Why would you want to?
I mean, you might as well ask “Can Russian and Chinese millionaires deposit money in American banks and possibly even buy stuff with that money?”Report
Because we’re making some distinctions between this bank account being the one that the government uses to make/disburse payments and the ones that Russian and Chinese millionaires deposit money in today.
Like, this isn’t the same kind of bank account that you have right now.Report
OK.
So, why would you want to restrict the accounts to documented citizens?Report
I didn’t say that I wanted to restrict the accounts to documented citizens.
I asked if we would be able to deny these accounts to Undocumented Dreamers Who Just Want A Better Life For Themselves And Their Families or does anybody who wants one get to claim one.
Your answer is “I think that anybody who wants one of these special USA bank accounts should be able to get one!”, I gather?
Or have you not said that, you are just changing the subject from the topic of who would (and who would not) qualify for one of the bank accounts to the topic of how I feel about things?Report
What would be the harm in allowing, as you put it, Undocumented Dreamers Who Just Want A Better Life For Themselves And Their Families to have one?Report
I’m not there yet, Chip.
I’m in the “We should create an Official USG Bank Account Program” place. I’m asking if there are limitations on this theoretical program
I still don’t know whether there are.
Is it your position that anybody who wants one should be able to get one?Report
I don’t know either.
At this moment I can’t see any harm.Report
Well, one of the things that would be required for me to get on board this USG Bank Account Plan would be that these accounts would be similar to a US Passport, Social Security Number, or similar. (Like, these would also be available to LPRs.)
If not, meh. Yeah, I’m not on board.
Lots of luck getting people on board, though! I am interested in hearing the arguments you come up with why people should be on board with changing things!Report
So, without even being able to articulate any harm, you are convinced the accounts should be restricted to documented citizens.
OK.Report
“We should change things.”
“Convince me.”
“NO!”
“Well, I’m unconvinced.”
And here we are.
I look forward to hearing the arguments for why we should change things!Report
I’m not trying to convince anyone of this, but thought it was interesting to point out how even the most simple economic policy proposal gets sucked into the vortex of cultural grievance.
In this case, the simple proposal for postal banking got suddenly derailed by the prospect of Those People being allowed to use it.Report
Do you think that Undocumented Migrants should be eligible for US Passports?
Or do you have racist cultural grievances?
(For the record, Chip: I have registered my current bank account with the Feds. When I have, for example, a tax refund? They drop it right in my current bank account! The same kind of bank account available to Chinese and Russian millionaires!)Report
That’s why I asked you for harms.
What would be the harm in giving undocumented immigrants passports?
A lot, because it would effectively grant citizenship to those who haven’t been naturalized.
What would be the harm in having undocumented immigrants have a government checking account?
Maybe there is some, but so far you aren’t articulating any, just a flat rejection of the entire idea based on that alone.
So it just reads like a culture war thing, where you are upset that Those People might get something nice.Report
Meh, you’re the one who wants to change things. We have things that do this sort of thing already.
You can’t give me a reason to change them from the stuff we have that already does these things.
So here we are.
Hey, if you’re interested if whether Undocumented Dreamers Who Just Want A Better Life For Themselves And Their Families can get bank accounts, they can. Just like Chinese and Russian millionaires.
I don’t see any reason to change things, Chip.Report
Well, that’s just it, you aren’t objecting to “change” as such.
You already said you are open to the idea, if it was limited to US citizens.
I press this issue because we see it a lot and it really inhibits the ability to speak to conservatives in good faith.
They profess all sorts of high minded principles about Burkean modesty and limited government and fiscal restraint, but none of those are actually what concerns them.
Its cultural resentment, underlying virtually every single issue.Report
I’m interested in the idea! I am!
Oh, it’s just going to recreate the wheel?
Nah. It does nothing that we’re not doing already.
I look forward to hearing the arguments for why we should change things!Report
I want to be able to vote with my feet when big gov’s programs aren’t as perfect in reality as they are in the Left’s imagination.
The “one central [thing] will just work” doesn’t seem to be the reality.
For example my wife got unemployment because she was fired. The State’s website for handling that is bad. It crashes. It has a silly long wait before you can login. It can’t undo mistakes. I have no choice but to use it.
Competition and the ability to walk away is really good at keeping services focused on my needs. When I needed to change schools, it was a good thing that there was an out-of-district alternative.
One of the real problems we have with police reform is we don’t have the ability to change providers. The State has a monopoly on the use of force. If that service sucks, then too bad, it’s a monopoly.Report
Pretty sure I explained that by saying ‘social security/tax ID’. If we give non-citizens a tax ID, they should be able to open an account, in fact, that should be _part_ having a tax ID/social security number. If we do not give them a number, they do not get a bank account linked to that number.
Dreamers, in fact, do have (Or, rather, can get by asking for) a tax ID number. That was one of the things that deferred action did.
Now, there is a slight, odd twist there in that you _currently_ only get a tax ID number when eligible for employment (You have to first get an ‘Employment authorization document’.), and a lack of that would screw things up for legal non-citizens who would need to get or pay some _other_ sort of taxes or fees. Like for underaged people who haven’t bothered to get the paperwork done yet…and I don’t think people who aren’t old enough to work can get ’employment authorization’ at all?
But that’s easy enough to fix just by saying “Every legal resident of the US should get a tax ID number even if not technically eligible to be ’employed’ here”, which is stupid we don’t do already.
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Fun fact in relation to your gotcha question: It is CURRENTLY illegal for banks to allow illegal immigrants to open a bank account anyway. While non-citizens can open bank accounts, in the US, banks are required to verify tax ID/social security number OR see some sort of documentation like a tourist or student visa that proves someone is in the US legally but doesn’t have a tax ID.
Now, commercial banks can indeed give bank accounts to tourists and students, unlike what I’m proposing, which…is fine, I don’t care?Report
So when the gov wants to increase minority college percentages or the numbers who own houses, they can push those loans onto people who can’t pay them back, and then force those people to pay them back anyway.
And when the gov (or parts of it) behave badly, it can’t be sued unless it allows itself to be.
It seems really easy to picture this creating problems.Report
…force them to pay it back instead…just making them homeless, which is how the current system worths? Huh?
I get your _point_, in that the Federal government enforcing loan collection could be a bad thing. Regardless of the situation, having to borrow money, and being unable to pay it back, is going to suck.
But..your example sorta points outs out the problem there, in that _current_ versions of this have people losing their houses or the car they pawned, or whatever, which…is not worse than just having the government garnish wages. And current payday lenders, they just keep adding to the money you have to pay back, and some point it’s just blatantly unrecoverable and that person will never have credit again, which will cost them a hell of a lot of money in rent and other things over their life, in addition to being hounded by creditors forever. In addition to the fees being absurdly high because they are unsecured loans.
Having the government do this means the government can set rules repayment and lack thereof…and I point to child support to something that the government actually does this with. (Although the government should be much laxer with loans than with child support.)
Rules can be set where only a certain amount of income, over a certain point, can be garnished. The government can extend a _lot_ of grace, especially since they don’t have to worry about a lot of things…people can’t move away, or get a good job and just not pay it, or all sorts of situations that other lenders have to worry about…on top of the fact the government doesn’t actually need the money!
It doesn’t hurt the government one bit if someone takes a year to pay back a payday advance they got because their car broke. That sort of money is literally an accounting error to the Federal government. We don’t want to just give it away infinitely, sure, but as long as there’s a total cap, and enough interest to encourage repayment, who cares?
Everyone who has ever talked about the payday loan industry has heard defenders that make a reasonable point: Sometimes people just need a small amount of cash to keep things level. That is entirely correct, it can be the difference between success and failure, you have no car, you have no job, everything spirals. You borrow to fix your car, everything’s good, you pay it back.
It is the possible aftermath that is the problem. Let’s _deal_ with that. Let’s build a safety net that includes ‘You can just take some money from US’s petty cash for a bit as long as you put it back when you don’t need it.’
What bank do you have that can be sued?!?!
Check your contract, man. You’re going to forced arbitration.Report
You have more faith in the gov’d intrinsic benevolence than I. My expectation is ethics are largely driven by the role.
Ergo if the gov starts selling used cars, someone will realize it’s fiscally a good idea to pay the salesmen on commission and look the other way when he lies about how well the car works. Or if the police depart keeps drug money it “finds”, it will go looking and all money becomes drug money until proven otherwise.
This is why you don’t want to have your banker, your judge, and your cop to all be the same person or answer to the same person.
I want the regulator for pay-day loans to be totally independent from the operator.
If the gov has a Ferguson-like fiscal interest in squeezing the poor, then we should expect that it will squeeze the poor.Report
Just imagine how much easier it would be for LE to do CAF if the money was in a government bank account.Report
Right now, the regulation for banks is…bankers. A lot of bank regulation is done by the Federal Reserve. Which is literally operated by banks.
This is on top of the revolving door of bankers and bank regulators in government regulatory positions.
Payday loan companies, OTOH, are barely regulated by _anyone_.
You keep proposing some alternate ideal version of the universe to what I suggest, where you can sue your bank, or banks are well regulated instead of causing a financial crisis in the near past, or payday loans are regulated _at all_. You can’t use that to object to someone changing _this_ world, where those things are not true.
And you’re about to say ‘Oh, they’ve started regulating payday loans’…in reality, the most regulated they are is merely ‘the top interest rate can’t be higher than X’, which is an extremely trivial ‘regulation’.
It seems extremely odd to argue that the government would somehow operate _worse_ than how payday lenders are currently forced to operate even under the harshest regulation they are currently subject too.
Have you noticed that every single ‘government trying to make money’ is either local, or Federal law enforcement who can keep the money?
And that’s because local government and law enforcement are often set up where the people making the rules are the direct beneficaries of incoming money, or lack of outgoing money, in what is the Most Obvious Mismanagement Ever.
So there is a very obvious solution there, and it’s so obvious that it doesn’t need to be a solution, because it’s just how we would set such a thing up: The people making regulations for this should have no incentive to try to make money from it.
You know, like 90% of how the government works? The people running the Social Security Administration have no incentive to not send out social security checks.Report
Yes, fully agreed, Banks have near total regulatory capture. Note that’s a very different problem from “they’re not regulated”.
“Well regulated” is claiming that if we ‘really’ regulated the banks according to how it “should” be done rather than what we see in reality, things would work differently.
I’m not claiming they wouldn’t be different; I’m pointing to how the regulation you claim you want works in reality. I’m also applying that to the rest these sorts of ideas. In the real world, we see “regulation” isn’t the same thing as “well regulated”. We also see the gov as a force rather than a “force that is good by definition”.
If you want to regulate payday lenders, then regulate payday lenders. If you can’t do that in the real world, then why should we believe that giving legal crime to the gov is going to result in good things? The War on Drugs works very differently in reality that it was supposed to when Clinton cranked it up, that’s because the gov isn’t intrinsically a force for good and follows incentives, which in this case are bad.
I would prefer to look at “the gov abusing people because of poor incentives”. That means the war on drugs is in. Immigration and Naturalization services is also in, their rules are the result of so much political virtue signaling and micromanagement, ditto welfare. https://en.wikipedia.org/wiki/Social_programs_in_the_United_States#Social_Impact
The political incentives for the gov making and collecting loans to/from the poor are terrible. Some will default, they will be demagogued, harsh rules of punishment will be created. An example of this is the gov deciding student loans can’t be discharged in bankruptcy.
It is a fantasy to think pay day loans would be done right by the gov. The real-world outcome would be something like pay day loan companies, as they currently exist, running that sliver of the gov and passing laws to encourage their use and ensure collection.Report
There is also just straight up fraud by whatever employees are there.
https://oig.ssa.gov/audits-and-investigations/investigations/june11/illiarrest
Employee crime aside, the federal government is always looking for ways to pad the budget. Sure, it may not be a directive from on high, but the bureaucracy has incentives to bring in revenue. You have to put in place incentives to make revenue generation a null value across the board, from the customer facing employees up to the top. No padding the department budget, no bonuses or awards for bringing in extra revenue, etc.
Just looking at CAF, the feds pocket quite a bit of money from CAF, and what they don’t pocket, they send downstream to states and locals. So it’s not a reach to imagine that if the fed.gov got into the business of making loans (rather than simply managing accounts for the un-banked), the potential for generating revenue for the fed, or finding an excuse to share with the locals…
You have to have an airtight plan for not only how to prevent that, but how to make sure the next administration doesn’t. I mean, sure, Biden wouldn’t do that kind of thing, but another Trump…?Report
UM, no. Unless you have statutory authorization to receive non-appropriated funds (like National Park Admissions or Army Corps permitting fees) federal agencies CAN’T “pad the budget” by charging people for things. IF a federal office receives non-appropriated funds as a “gift” it reverts to Treasury, who has separate rules on how to handle that.
We can’t go asking. We don’t get bonuses if we do.Report
So you have a federal agency that charges interest for loans, or charges fees for services, that money can either got to the department budget, or to the general treasury, correct?
If it goes to the general treasury, that’s great, one incentive off the table (no padding the budget directly), but I assume such things are tracked, and at some level, people get kudos for bringing in revenue. Probably not at the customer facing level (I don’t expect my local Park Ranger gives a hoot how many passes they sell in a season), but someone up the food chain does.
So now I’m looking at Wells Fargo, and thinking, how do make sure those incentives are not in place and can not be put in place?
And again, I look at CAF, which was only ever intended to be used against powerful crime lords, but in reality, it’s used against regular people not connected with any crime.Report
No – federal agencies that charge fees only do so with Congressional authorization, and that money goes back to the agency to offset expenses – all of which is reported to Congress annually. The few agencies that do host loan programs – like the SBA – don’t process the loans themselves; they generally contract with the banks to do so. And again, the authorizing legislation for that loan program will tell the agency where any accrued interest is to go (it often but not always goes back into the loan program to allow more loans).
Maybe, but my experience with senior career feds is they don’t. In fact much above GS-12 the only awards people get are for things like saving the government money or delivering innovative services (or length of service career awards). There are some agencies – mine included – where employees can get “bonuses” for performance, but we are paybanded and the time in grade automatic pay raise was removed when the bands were created. Which means any pay raise or bonus I get is supposed to be based on my annual performance plan. All that hooey about making government more like a business and such.
We already have a huge legal disincentive in the federal government – the Anti-Deficiency Act. in a nut shell its illegal for agencies to spend more money then Congress authorizes, and its illegal for agencies to move money around above a cert percentage without additional Congressional authorization. That and, amazingly, government doesn’t have a profit motive.Report
So back to CAF, how is it federal LE agencies bother with small time CAF? I’ve read stories about the DEA, the IRS, the SEC, etc. going after mom & pop places for CAF, with no evidence of criminal activity.
I get why local PD does it, but if the feds are not permitted to keep or spend the money, why do they do it? Is it a special carve out for enforcement agencies?Report
That’s a good question – I don’t know the LE side of the federal government very well.Report
SO, bear with me, because gaming these things out is, IMHO, important.
Let’s say we have Federally run payday loans (I’m sure someone will come up with a clever acronym for it) linked to federally operated bank accounts. On it’s face, not a bad idea. Government has no profit motive, so the interest can be a few points above prime (to help cover operating costs), account fees are minimal, etc.
But there is the implication that the IRS will have eyes on those accounts, for tax reasons. Ergo, federal LE can get eyes on those accounts. Now LE has both a financial incentive through CAF, and a career incentive through showing action with regards to crime (and we know that LE likes to play up their penny-ante crime fighting efforts into a Big Damn Hero PR event, so…). Given that, unless we lock down the account privacy, I can imagine bored LE looking for anything suspicious enough to give them probable cause to seize funds, pad their budgets, and career, and maybe not even need a warrant, or subpoena?
I mean, I like to think LE doesn’t so that kind of crap, except they do, and the get media support and kudos around for doing exactly that kind of crap (and they are real good at acting all aggrieved when folks sue them for it).
Now, perhaps if CAF wasn’t a thing, or had a higher bar to clear, or there was a tight firewall between account activity and LE inquiries (which doesn’t exist, because banking regulations require that LE have access to those records upon request, plus the $10K reporting requirement), we wouldn’t have to worry about such things.
But we do, and asking someone to think these things through is legit.Report
This is a completely surreal hypothetical. Why would FBI agents have the ability to randomly browse through these accounts? Why has such a system been set up in this hypothetical?
You realize that the FBI can’t access interagency records for _anything_, right? Even government records! That is not, in fact, how the government is set up, computerwise. When the FBI wants records, even from the government, it has to formally ask for them via subpoena. This is on purpose, to stop exactly the sort of searching you are proposing.
Now, of course, ‘subpoena’ is just a fancy way to say ‘asking for them in connection with an investigation’, and in fact the FBI abuses its subpoena power all the time.
https://www.nytimes.com/2019/09/20/us/data-privacy-fbi.html
But…that’s how it works for existing banks, so once again we are at the ‘People are comparing what I have suggested with a hypothetical ideal universe instead of the universe we have’.
In both the current universe, and what I propose, the FBI will, still, have complete and total access to the bank records of anyone it wants by merely ‘opening an investigation’ of them, with no real justification required at all…however that’s not the same thing as having the records of _everyone_ at their fingerprints which they can just flip through looking for crimes, which isn’t true in either universe.
If someone has a problem with this, I suggest they complain about that problem, and not the thing I propose, which does not alter that problem in any way, shape, or form.Report
I don’t have a problem with what you propose, conceptually (something I’ve been pretty clear about), I have a problem with what the execution of that concept would look like today if implemented.Report
My guess would be some combo of “soft target”, “letter of the law”, virtue(?) signaling, and “look busy and useful”.
Now I still expect the lion’s share of the problem will be created by our political class virtue signaling.Report
“I said that people should be required to have an account, and that account should be the only way the government accepts or disburses cash.”
Which is what I meant by “it’ll be illegal not to use the government bank”, by the way.
“Rules can be set where only a certain amount of income, over a certain point, can be garnished.”
So if I make less than a certain amount of income I can just borrow money from the government forever and never have to give it back? Awesome!
“Let’s build a safety net that includes ‘You can just take some money from US’s petty cash for a bit as long as you put it back when you don’t need it.’”
Who decides when I don’t need it? Me? What if I just say “eat me, I ain’t payin’ it back ever no matter what”? Do you send the cops to arrest me? Do I just never get to have a loan again? I need the money or I’ll starve, you heartless bastard, wasn’t the whole point to let poor people like me have money, do you hate poor people that much?Report
This is how we get rules (i.e. laws) that squeeze the poor. For the good of society of course.Report
If you make less than a certain amount of income, you almost certainly have been _given_ a very large chunk of government money at one point or another, via tax subsidies at minumum. Way more than I’m suggesting loaning anyone.
So being given a small loan and not having to pay it back _at all_ would be literally the same thing…except that’s not even what I’m suggesting! I’m just saying ‘Paying it back only happens when you have a job/tax refund/whatever going through your account’.
Literally every part of that paragraph has been answered by me, before, in this thread. But let me answer them once more, pretending that you are operating in good faith that you clearly are not:
The ‘person’ that decides you don’t need the money, so it can take it to pay back the loan, is algorithms that see you have started earning some sort of steady paycheck and that all of it is not being used. These should be in a fairly long lag time…ideally, everyone would be _deciding_ to pay the loan back well before that point, and it just get pulled out if you have clearly recovered financially and are just sitting on the cash to pay it back.
Hence charging ‘reasonable interest’ to disincentive people sitting on the money, especially since they know they can just borrow it again if needed.
No, we just don’t give you your tax refund. Or…we just take it when your wages are paid.
If wages are not being paid, if a person is not making enough to pay back the loan, it seems REALLY obvious what I want to happen, but apparently I have not made it clear enough: I do not want them to have to pay the loan back while that is true.
What sort of nonsense is this? I clearly am talking about a government program, with rules and regulations, not people begging in lobbies. You don’t go ‘asking for a loan’, you just log into your account and say ‘I need to borrow some money’.
As I made very clear, there will be a total amount you can borrow. That’s it. I not only talked about a cap, I suggested one of $2000. Although it probably should tied to inflation and local standard of living in some manner instead of just a fixed amount.
Any more lack-of-reading comprehension questions?Report
When you are willing to spend hundreds of millions of dollars to run a private undersea telecom cable just to be able to take advantage of something like a 5ms information advantage, something is wrong.Report
Oh yeah.
We could get away with it merely being 20, but it’d have to be a very, very particular 20.Report
https://www.youtube.com/watch?v=YSrvFjT0vmYReport
What sort of logic is this? ‘Simply described companies can’t be negatively impacting the market?’ Is that the claim here?
And…most of these companies are only simply described because huge parts of them were not described, for example. Amazon is not ‘mostly a consumer products seller’…it makes a huge amount of money from its cloud servers.
Also, asserting that Google doesn’t make much money from YouTube doesn’t _disprove_ Google has a monopoly…monopolies often run loss-leaders in unimportant things to _keep customers inside them_ for the important thing.
Same with asserting that Amazon doesn’t make much off Amazon Prime, and literally the only reason it exists is so that people will think of Amazon as a subscription service that they need to get their money’s worth from. Yeah…that’s how monopolies often operate…they’d rather have a _consistent_ userbase than actually trying to compete individually. It’s worth it to _lose_ money on individual transactions if it keeps any other firm from getting market share.
And it sure is weird how both Microsoft and Amazon have repeatedly violated the law for having been lead by just geniuses.
Is this a parody that I’m just missing?Report
It is worth noting that Jeff Bezos has, for at least a decade, described Amazon as a data aggregator and seller. the retail and web services stuff is fluff compared to that.Report
I’d have an easier time believing that if he wasn’t consistently accused of stealing IP from small companies.Report
Yes. There’s something predatory about providing a marketplace then scouring your marketplace for poachable items based on data/sales and then skewing the marketplace search to your poached items – harming your erstwhile partners/clients as competitors.
If the argument is that Amazon offers such a lucrative market that poaching is a cost of business… ok, I suppose. But if the argument is that Amazon is the only real market and going to business there is an open invitation to anti-competitive poaching which puts you out of business? Then it’s a capitalism problem that capitalism warns us about.
The Amazon Marketplace model in these scenarios bears a slight resemblance to the practices CCP employs for access to their markets. I find it odd that we’re all good with both.Report
I agree entirely. Amazon is the racket that’s just screaming out to be broken up and that is with them currently operating in a market share grabbing mode. If/when they switch to profit mode it’ll be absolutely egregious.Report
Capitalism ought to always look with suspicion on businesses whose apparent industry is ‘Provide a place for people to buy and sell goods’.
Not at the small scale. Like, if a company that builds a mall and leases space in it…someone has to own that space and manage it, sure, and obviously should make some sort of profit for running it.
But…we should be dubious if someone owns _all_ the malls…and strip malls…and individual commercial properties…in an entire town. Or…the entire nation?
And they…also start setting up competing, better-positioned store in those malls. At some point, we have to admit there’s something wrong here.
Now, the obvious objection there is, as there is no such thing as limited real estate on the internet, that no one is stopping competitors from Amazon.
Which…firstly, isn’t entirely true. Amazon actually colluded with book publishers to get where it _started_, a bookstore that expanded. Amazon’s illegal practices quite likely should be blamed for destroying the entire bookstore retail industry, even if we didn’t notice that because by the time it finished happening, Amazon had moved on.
However, ignoring that: There seems to be some sort of weird idea in US pro-capitalism that just because something is _theoretically_ fixable by the marketplace, we are not allowed to do anything about it. We have to restrict ourselves to problems the market can’t fix.
Now, the thing is, I’m not sure Amazon’s market dominance in the reseller market _is_ fixable by the marketplace. Even if Amazon behaves completely legally from this point forward, I’m not sure anyone could climb the economics of scale to challenge them.
However, I’m a little tired of arguing that, because that is literally the wrong argument. I don’t care about what _could_ happen. I care about the current state of reality.
We need to stop creating hypotheticals about how the market could fix the situation with Amazon, and realize it’s _not going to_. We need to stop pretending that capitalism is literally some invisible hand that reached down and fixes things, and admit…sometimes markets just break, for a very long time. Sometimes in ways that literally cannot be fixed without taking them to pieces. Especially since we refuse to step in to _tweak_ them in any manner, we refuse to have any sort of maintence.Report
Hard to say, really… when the sizable majority of your Profits come from a line of business delivering cloud services… it really isn’t about being a Data Aggregator and Seller.
“Amazon Web Services, the cloud computing giant led by the now-future Amazon CEO, closed out 2020 with more than $13.5 billion in annual operating profits, responsible for more than 63% of the entire company’s operating profits for the year, on annual AWS revenue of $45.3 billion, up nearly 30% year-over-year”
All the other low margin non-profitable stuff? Loss leads and market positioning.
Honestly, there’s no earthly reason why Whole Foods and AWS are the same company… not even ‘vertical integration’ is in play. If we wanted to look at non-punitive ‘trust-busting’ we should break up Amazon into multiple wildly successful companies. Viva capitalism.Report
It is interesting to see that the people who said “Amazon won’t ever be profitable selling stuff at a discount online” were right, and that Jeff Bezos turned out to be one of those people.Report
A bit off topic, but related to our previous discussions of UBI:
A new citywide, anti-poverty proposal by Los Angeles Mayor Eric Garcetti would give cash — strings-free — to thousands of city residents in the coming months.
Garcetti’s $24-million Basic Income Guaranteed program, which will be included in his city budget to be released Tuesday, would provide $1,000 a month to 2,000 Los Angeles families for a year. There will be no obligation on how to spend the money, according to the mayor’s office.
https://www.latimes.com/california/story/2021-04-19/garcetti-los-angeles-universal-basic-incomeReport
First, good for him. I’m all in favor of gathering more data on how this would work in practice.
2nd, if we wanted to expand that to everyone in the country it would cost roughly 4.2 Trillion dollars a year.
For perspective, that’s roughly the same as all federal spending combined. Medicare, Medicaid, Social Security, Defence, Other, and payments on the debt.Report
But of course, the mayor isn’t sending a $1000 check to every household in the city.
2000 households out of about 1,400,000 households in Los Angeles= the benefit is given to 0.0014 of all Angeleno households.
Expand that nationwide and see what you get.Report
Your math is solid. Expanding that to the entire US would cost about $2B per year. That’s the good news.
The bad news is not getting into this program because your household has a dollar too much income would result in your household being $12k poorer than the household who did get in.
This is an experiment, not something that can be expanded. If we’re going to expand it then “universal” has to mean “universal” and it can’t create a grim poverty trap.Report
Exactly. Everyone gets $1000. You and I see our taxes go up probably more than $1000. People further down the income ladder might see their taxes go up $500, people even further down might pay an extra $100.
Figuring out who pays how much is the trick.
But the system works (in theory) because I don’t have to apply for the $1000 if I find myself un-/under-employed (thus wasting time burning through whatever savings I might have while I wait for the bureaucracy to do it’s thing), and if my wages for the year tick up, then I just start contributing more.Report
It most certainly can be structured to work, however the way it’s being sold is “an extra $12k for everyone”.
The reality would be a tax increase for everyone above the bottom 7% (i.e. everyone who makes more than $12k/year).Report
Right, but you scale it. The guy making $13K pays an extra $10 in taxes. The guy making $130K pays an extra $1000. The guy making $1.3M pays an extra $100K.
Or something like that.Report
Agreed, we can make the math work… but… the politics of this is pretty ugly.
The people on this board are better informed and smarter than normal and it was only after we’ve had this UBI talk several times that no one made the “I or a guy I know will be better off” mistake.
This is a tool for helping the bottom 1% (or less) a lot. The break even point is about 7% (or less).
The top 93% will be worse off. It’s been sold as a tool for helping everyone but the top 1%. We’re deep into “lie of the year” territory but the math here is simple enough that everyone will see it at the time.Report
You sell UBI like you sell any insurance, you pay for it so it’s there if/when you need it.
Will some folks exist on the UBI long term, just just constantly un-/under-employed? Yes, they will.
Small price to pay for all the potential benefits.Report
There are about 120 million households in America.
Multiply 120,000,000 x 0.0014= 168,000 households receiving a benefit.
168,000 households x $1,000 = $168,000,000.
168 million dollars isn’t a rounding error to the Pentagon. It’s more like a small rounding error at a moderately sized federal agency somewhere.
If one is concerned about a cliff, the benefit could easily be graduated on a sliding scale.
But why even talk about this like its some hypothetical?
The EITC regularly delivers more than that to low income households, but does it in the form of a tax refund.
There are millions of Americans who receive what is essentially a no-strings-attached cash benefit of more than $1000 and have been for years.
And yet, behold! Does the sea boil, or the sky turn dark?Report
That’s $1k a month. My $2B figure was per year. It’s the same number.
As for the rest of it, I seriously doubt you’re willing to only have the 0.14% bottom of the income group have this benefit, nor should you considering that bumps them from the bottom 0% to the bottom 7%.
It’s not even clear to me how many people currently have zero income or what that looks like (when I had negative income my family didn’t suffer because we had other assets). Nothing you’ve said deals with the poverty trap.
The structuring of this is for an experiment and can’t be expanded to the federal level and everyone.Report
Fair point, my math was off.
But even at 2B/ year, heck lets expand it fivefold to $10B/ year, this is easily affordable.
For the record, I’m not in favor of a UBI so much as I favor what I call _UBI by other means” for example subsidizing things that poor people spend money on like transit, food, housing and so on.Report
For perspective, we’re already spending something like a Trillion a year fighting poverty.
https://www.cato.org/commentary/whats-missing-war-poverty
I would much rather reform housing than subsidize it. As long as we’re only building enough housing for the top X% the bottom (1-X%) will be priced out.
That’s probably where the most bang for the buck is… that and ending the war on drugs which fuels various problems.
Food has food stamps or whatever we’re calling it now.Report
More and more these days it all seems to spin back around to restrictions on housing construction.Report
Yep, because housing is the biggest line item on any poor person’s household budget.
Food is cheap thanks to subsidies, most utilities have subsidy for low income residents, clothing is cheap thanks to offshoring and technology, which leaves housing as the biggest hurdle.
We could and should loosen zoning laws and offer generous subsidy to providers of low income housing.
And again, “in-kind” assistance such as free public transit, free public broadband, free community college.
These all have a long proven track record of success.Report
I’d be interested in seeing the evidence for subsidies to low income housing providers resulting in success.
Same for free public transit, free public broadband, and free community college.Report
Sure!
To start off, the GI Bill and programs like FHA and VA mortgages offered easy money to homebuyers.
Second, the publicly financed highways and roads which made previously unfeasible housing projects suddenly feasible was a direct subsidy.
Free community colleges have resulted in affordable education for generations of people.
Also, government-backed student loans and Pell grant expanded the pool of college graduates from the rich to even the low income.
These are proven ideas, so proven and time tested that everyone just takes them for granted.Report
Oh, so we’re counting “roads” as subsidies now?
We’re already providing subsidies to everybody, Chip. I thought you meant stuff that we weren’t doing.Report
Well yeah, “Stuff we’re already doing” is a necessary component of “time tested and proven”.Report
Has it lost its efficacy?Report
Food is cheap thanks to subsidies
Crop subsidies have very limited effect on food prices, and are mostly for the benefit of farmers. Total spending on food in the US is about $1.8 trillion per year, and crop subsidies fluctuate a bit but are usually in the $10-20 billion range, so on the order of 1% or less.
You can thank technology, not subsidies, for cheap food. Unless you were talking about food stamps, in which case yes, those do make food more affordable for low-income households.Report
I expect a big purpose behind these zoning/other restrictions is to prevent low income housing from being created. NIMBYism
Thinking about the political forces at play and how determined they are, we probably need a federal law to limit or outlaw local control.
We’re nowhere close to that happening, but I find it hard to believe anything else works.Report
I had an interesting conversation recently with a guy who is working for a biotech company in this area. After he got his PhD, he moved to Boulder to do his post-doc. He bought affordable housing because it’s what he could afford. Boulder’s affordable housing program limits the increase in price to increases in income in the area, not the insane appreciation that’s been going on with regular housing for years.
Now he would like to move closer to work, but can’t afford to. His summary was something like, “When I moved to Boulder, if I had stretched my budget even farther and taken on a housemate, I could have probably bought a non-program house. If I had done that, the insane appreciation would give me enough equity to put in a different house that I could afford the payments, so I could move. Since I didn’t, I’m stuck in the program housing unless I leave Colorado, but that would have unfortunate career consequences. No one told me affordable housing was a trap.”Report
Of course it’s a trap. Any affordability program that ignores economics becomes a trap.Report
I don’t have a lot to disagree with on that Chip. But damn does loosening the zoning rules seem like a challenge right now. The Baptist/bootlegger NIMBY coalitions rampaging the west coast right now just boggle my mind. I never thought anywhere would beat urban New York for building restrictions but California just has to be first in the nation. Not to mention Seattle and Portland, wowza!Report
One of the big issues with housing is how to deal with vacancy. This is one of the big reasons communities and developers are not eager to go on building sprees except in some very hot markets. If you build a housing complex (houses or high rise apartments), and the demographics shift away from the area, you’ll have a very expensive money pit on your hands.
So, given our current system, we will likely never have enough permanent housing to meet demand.
What we need is a way to ‘mothball’ housing, and perhaps shift it around, but that makes folks think of trailer parks, and cheapness, and all sorts of other negatives. Trailer housing isn’t even that movable, and a lot of trailers just won’t survive moving (because they are cheaply built).
Perhaps our resident architect has some thoughts on this? I mean, I do, but I don’t live and breathe that kind of stuff…Report
I can imagine that represents a problem, but not near the same problem as NIMBY’s and their hammerlock on zoning and construction regulation present. In the white hot markets there isn’t a lot of risk to building the damn house, it’s getting the regulatory permission to do it.Report
Vacancy is part of the NIMBY concerns. No one wants to live next to the empty housing project from 20 years ago.Report
Mmmm it’s a pretty small one considering the worst NIMBYism is in places where demand is absolutely white hot and has been white hot for multiple building cycles.Report
FYI It’s $1000 / month, so that is $168M x 12, or ~$2BReport
It is important to remember that a UBI is something your or I might get, but it would be paid back almost immediately through taxes. Figuring out the optimal point when someone earns enough to be a net contributor versus a total beneficiary is one of the reasons we need data like this.Report