(week of December 29, 2008)
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Quality is going to make the comeback whether the folks want it or not.
I am bumming that I did not make it to BB&B for that 99 dollah personal valet so
I can hang my thrift store clothes on it. Too bad that thing probably won't make
it to the 2nd hand store unless it wasn't opened. The one thing the f(F)ed is missing
is that it can't re-inflate peoples souls. Almost everyone I talk to has changed.
Hell, I don't even start the doom and gloom conversations anymore. I personally
feel that if the power structure doesn't pull something out it's hat very soon we
could have the French Revo Duex instead of the greater depression. The people now
don't have the guts to just tough it out and their distrust of the elite is too great,
I don't even think they could re-inflate with a big war based on some so called
terrorist event at this point. I think it is done for the few and the masses
will benEfit most with is coming.
Good example this morning. I like how this one item
(standing valet a.k.a. towel rack?) illustrated the waste in
the entire chain.
I use to work weekend craft shows in the early 1980s
with my parents. Local people from around the US midwest
would make and sell their own items in little booths in an
indoor venue (county fair building, gym, etc). Any little
knick knack or towel rack was available. Prices were
affordable. Cover to get in was $1-$5. Some of my family
eventually went into wholesale marketing of these items and
did quite well for a number of years.
By the early 90s the big-box marts killed these local shows.
By the 2000s imported goods have destroyed the wholesale
business of the majority of domestic arts and crafts except
for an extremely small slice which caters to the high-end.
A CD cabinet which family members sold in the 90s for
$50 was made in the USA of hardwood, had two drawers,
and was hand-painted (lead-free!). The prototype I have is
now 20 years old and is still intact and the finish is good.
Last summer or the summer before in a big box tool section
I saw two rows of pliers. One was $9.99 and made in the
USA and the other was $8.99 and made in China. I handled
both and the only difference was the color of plastic coating on
the grips. They could have literally been made on the same
factory machine. Guess which row was fully stacked and
which only had a couple left? No-brainer. Everyone wanted
to save a buck, of course.
Reading your entry today--the part about the "executive standing
valet" from BB&B--reminded me of a great short story by B.Traven. I
read it maybe 30 years ago and haven't forgotten it. I don't know if
this is the whole short story but even if it's not you'll appreciate it.
Capitalism has several components:
Owner by achievement as opposed to owner by birth or privilege
wage labor by citizens not by subjects or slaves
capitalism works with supply and demand and allows for correction
capitalism demands democracy and a social contract because capitalism means
personal responsibility, there are no roles in capitalism, everyone must make
their own destiny.
Unlike a Lord or Baron, a capitalist can lose their property and do not have to
be killed to get by other citizens
I want to say that I am a socialist, I do not believe health care, roads, schools, natural resources, heating, water, electricity and microsoft windows are part of capitalism. Everyone demands these products, for our a government to allow private citizens to take advantage of this is immoral and making money people holding a Gun not with well done commercials and good product placement.
Capitalism, democracy, and the social contract still corresponds with nature.
They all allow for correction just like nature does.
If some birds end up on a strang island they've never been before, they will immediately start evolving or correcting their physical appearance to adapt to the new situation. If a drought comes the animals will move to a new land. A forest burns by lightning and a whole new type of trees grows in its place.
If The People do not want certain leadership, it might takes years, but they will vote out that party. As opposed to having to kill the leadership and create chaos.
If The People no longer need a product, they slowly stop using it. Of course people lose their jobs, but people, animals, and plants have been losing their way of life since the beginning of the planet, it is part of history.
You point at the rocks at the Grand Canyon and say, "This is when the world had to do this to survive."
Unless we lose our food surplus and a large amount of humanity dies, and society gets sent into total chaos and we actually like Kunstler says become regional chiefdoms then capitalism will be lost. But I wouldn't surprised if we did actually end up in chiefdoms, that one chiefdom may be different than another. A chiefdom founded by a bunch of previous crazy christians I'm betting some would actually create a king, and perhaps mexican mafia catholic ones. But ones founded by resourceful union workers mixed with white collar workers would create democracies and small forms of capitalism.
Now I wouldn't be surprised that instead of Locke view of humans "improving" nature, humans might start thinking, "Destroy." Which would be a great reovolution.
The first U.S. presidential election had a country of less than four million: democracy, the social contract, and capitlism can exist with very few people using very little natural resources.
I've seen the phrase, "Is capitalism over" several times in the last three months. But I have not seen the phrase, "is the social contract over," and may we never live to see that day.
You advocate (and I fully agree with) small-scale agricultural production using resources available to individuals. The problem is that this requires a single family home with some land around it (more than the handkerchief-sized plots in most suburban areas). There should also be no local ordinances or homeowners' association rules prohibiting people from raising vegetables/etc. Many people do not have this luxury, but an agricultural cooperative can address their needs more than adequately. This is how it works:
Members pool capital and buy land. Obviously, this land is outside the city so that now the same dollar buys much more land than it would have in a residential subdivision. Also, since a larger plot is bought, the cost per acre is lower, and in some states (Texas, for example) it will qualify for an agricultural exemption (i.e. practically paying no property taxes). Economies of scale (i.e. buying in bulk) for operating the farm will apply. Members can also donate labor. They are paid in produce, proportional to the sum between their capital shares and their labor value. Return on investment is also enhanced by the fact that the dividends are not taxed -- you eat them instead!
There are other benefits, such as:
- having full control over the production process (i.e. to ensure that no hormones/antibiotics/toxic pesticides are used);
- having a healthy, value-adding way to spend free time, and something for kids to do other than hanging out at the mall;
- building a network of friends that can be used for other purposes as well (pooling together money to buy personal-use supplies in bulk, trading services and help, having fun together, etc).
It is crucial to agree on a charter of the operation in advance (including mechanisms for mediating disputes), using advice of attorneys and of others who had experience with similar endeavors, so that the vast majority of problems can be pre-empted.
The internet is great for coordinating the day-to-day operation of such co-ops.
All in all, I find this much better investment alternative for the small guy than what is currently available out there. What are other options? Buy a mutual fund and hope that the coming Peak Oil and demographic crises will not wipe you out in the following decades? Buy bonds and hope the government will not print enough money for bailouts to wipe out the value of your returns in the future?
As always, Wikipedia is a great starting point for this. Have a look at
and go start your co-op today! :-)
Stick to your guns with the idea that public sector employees are overpaid compared to private sector employees!
Kyle L. ignores several important points regarding the public sector/private sector compensation debate:
1. With globalization, it has become impossible to keep all of our high-paying private sector jobs in this country. The message from Corporate America is either work for less or don't work at all. Not that many industries have immunity from that dictate. Global wage arbitrage is the incentive corporations have to terminate highly paid employees and export their jobs to lower cost (primarily Asian) countries whenever possible. Think it isn't happening here? Think again. Plenty of Fortune 500 corporations are outsourcing huge segments of their IT departments to IBM service units based in the Philippines. Trust me, the Filipino employees are not averaging 80-90K a year in salaries like the US employees - the Filipinos earn more like 6K a year. And another thing you can take to the bank is that no public sector employee anywhere in the US is in danger of having his/her job outsourced to Asia!
2. Private sector employees are now taking pay cuts and benefit reductions (FedEx, for example). Except in Vallejo, CA, which has filed for bankruptcy, no public sector employee anywhere in the US is in danger of having his/her pay cut or benefits reduced (Jefferson County Alabama [Birmingham] may be the next public jurisdiction to file for bankruptcy). What is true is that a number of them may be getting pink slips in the coming Depression, but job cuts are always the last resort for governmental entities. The first resort is to raise taxes and the second resort is to reduce services. Only then will a public entity issue pink slips. In the private sector, job cuts are always the first resort so that Corporate executives can protect their own compensation packages (I was a Fortune 500 executive, so I know factually that this statement is true).
3. Most public sector employees are able to retire with guaranteed pensions and lifetime health coverage. Most public pensions are generous (50-75% of the average of the high 3 years' salary is fairly common) and are comparable percentage-wise to what high-level executives of corporations receive (3% of lifetime salary and bonus payments, which is a good deal for someone with 25 years of service). In the interest of full disclosure, I worked for 10 years in the public sector, long enough to qualify for such a pension, but unfortunately not long enough to receive lifetime health benefits. These days, such pensions are not available to rank and file corporate employees or small business employees. In fact, many corporations file bankruptcy just to dump their old defined-benefit pension plans onto the Pension Benefit Guaranty Corporation. When that happens, pension benefits are frequently cut substantially.
There is no reason that public sector employees should not share the pain with their private sector counterparts. In fact, in the coming Depression, I think public sector employees are going to be in for a very rude awakening as to the sustainability of their jobs, salaries, health benefits and pensions. Tax receipts in many states are plummeting, and there is no recovery on the horizon. Like it or not, the tax revenue at the state and local level is simply not going to be there to fund the continuing largesse received by public-sector employees. Finally, at some point, the private sector will no longer be willing to fund Federal deficits at zero interest rates. At that point things are going to get really interesting.
I may be wrong on some things, but want to learn. The important thing is to
get Americans thinking instead of falling for the B.S. We are unfortunately
following the Great Depression and the New Deal step-by-step. Substitute
Russia and China for nazi Germany and you can see WWIII coming as well. I
hope not as my children will get to be slaughtered in it.
One more addition to consider. Going to India for medical is a complete
vote of confidence in free market medical. They have a special hospital set
up like a resort. You are treated by a well educated surgeon, and the cost
is about 25%. There is real competition for your business since you can
choose to stay in America. The AMA monopoly does not exist and you can't
sue for "excessive" pain and suffering.
Also, since the doctors are not
licensed by U.S. boards, you are depending on word-of-mouth advise. This is
very anarcho-capitalist. Note that I am not anarcho-capitalist, I believe
in necessary government regulation, but it is interesting how they predicted
this sort of set up.
Bottom line, when you go (flee?) to India to get high-value medical care,
you are going to a total free market experience. You are NOT going to the
typical Indian socialized system.
Food for thought.
I would argue that capitalism today has mutated into various "malignant" forms.
They all (except West Africa) share a common trait in that they are suffering from
the cancer of government bloat. And the reason for this cancer is a mutation in the
DNA of the world's monetary system - the regime of fiat currency. This regime allows
the government (and a narrow, non-productive cross section of society affiliated
with it which we affectionately call the "elite") to effectively control the monetary
system. It allows the government to usurp resources from the private/productive sector
of the economy, increase its size, and in the process cause all sorts of misallocations.
Now, although it is not the cure for all ills, but a commodity based currency
(such as Gold, but it could be called "xyz" for all I care) would not allow the
huge cancers pervading today's global economy to develop and flourish. It would
prevent the massive cock-ups occurring in various economies today. The most important
function it would serve will be to impose discipline on all parties concerned. For
example, it's impossible to go 1:100 leverage in a gold based monetary system.
Also, any significant misallocation would cause interest rates to shoot up, thus
preserving valuable capital and preventing further misallocation. It would not allow
one section of society with effective control of the monetary "information system"
to enslave another through the distortion of price signals. It gives back monetary
control to "the market" - the collection of all the peole in the world with different
wants & needs as well as abilities - as no single entity controls it. A democratic
monetary system instead of the fascist one we have today.
-"Jobs" will be hard to find.
-"Work" will increase.
-Things will continue to wear out, people will continue to generate
needs. Less of that maintenance and fewer of those needs will be
addressed by people with "jobs".
-Asking for a job is akin to walking up to a pretty girl and asking her
to marry you.
-Asking for work is like walking up to the same girl and asking for a date.
-Jobs became the norm as we started buying big-ticket items on credit
-The people loaning money demanded some guarantee of future cash-flow.
-Work was the norm during the grand sweep of human evolution/history
-Even today, Amish count on a multiplicity of enterprises to generate
spurts of income.
-Taken together those spurts even out into a year-round flow of income.
-A multiplicity of enterprises requires a multiplicity of skills.
-In a survival situation, a Swiss Army Knife is more useful than a LASER
-The most profitable enterprise is to stop the arterial bleeding of
discretionary expenses within the household economy.
-Plant a garden
-Insulate and weatherstrip
-Treat clothing gently
-Consolidate trips, or better yet, stay home and make do.
-"Job" presupposes enough fossil fuel to either bring a large customer
base to me, or that I can inexpensively travel to my customer base.
-Meijer's (a Michigan supermarket) was radical in that they offered a
parking lot in addition to two places in front of the store on the street.
-Meijer's first parking lot accommodated 6 cars.
-Meijer's first "super market" regularly brought customers from twenty
miles away...an unheard of distance.
-Meijer's first super market was 1938.
-Our lifestyle choices are the biggest determinant of our health and fitness
-Much medicine can demonstrate little incremental gain to off-set huge
-Do high school kids really need to have $2800 a year spent to address
-Soap and water are cheap and effective...for many things
My future vocation may be running our household economy, peddling my
skills and adding to my portfolio of skills.
Anyway, regarding your "end of work" series...
We all know Argentina had a 'crisis' in 2001. Their currency devalued to about 1/3 and wealth was destroyed. As they stopped paying the outside world, they turned to within.
I am in Buenos Aires now. Our local contact tells me most of the people do their best to avoid paying taxes. Cash purchases rarely go reported. The police basically do nothing but stand around, though they will stand in front of your store if you pay them on the side to stand there. Petty crime seems to be high, though I cannot say for sure. Where we are staying is one of the best neighborhoods in the city. A two week rental of a two bedromm, 1.5 bath place ran us $1250 US -- significantly cheaper than a hotel. And the place is nice as well..
Food costs have been rising significantly, though most of it is cheap by US standards. Then again, selection is nowhere near as good. We also stopped in a CD store and bought two new CD's for about half US pricing for new releases -- go figure. I guess when money is less plentiful, then prices have to come down.
Retail here is NOT mega-malls, it is small stores everywhere. We were in the largest bookstore in all of latin America yesterday. I have seen Barnes & Noble stores in the US that were larger, and I am sure there are plenty of B&N's of that size everywhere.
Borrowing does not exist here. Want a car? Save up for it and buy it. Used cars go up in value, not down as inflation raises the prices of everything. Cars are not thought of as disposable items. Buy one and keep it forever as it takes to long to get the money together.
Want a house or a condo? Save up for it. Period. Or rent. There are no mortgages to speak of. Sure, some people can get them, but they are almost unheard of here. And, like the US, it almost makes no sense to buy, as rent is always cheaper than what a mortgage would cost you if you could get one to buy a place. The other issue in buying anything is the government becoming your 'partner' in ownership thru rising taxes. (Sidebar: I have a friend in CA who recently asked me if this was a good time to buy foreclosures in CA. I told him NO time would be a good time. With record state and local deficits, it is almost guaranteed taxes on property will keep going up.)
Unemployment in BA is pretty low, but the rest of the country is high. the best jobs here are private doctors, lawyers, and established private dog walkers. Yes, that is right -- dog walkers. People here love their dogs, and pay others about 100 pesos ($34US) a month to walk their dogs. A good established dog walker can get two sets of dogs per day, up to maybe 20 (yes twenty at a time), At $4000 pesos a month, he would be one of the higher wage earners in the city right on par with those doctors.
I spoke with a man today who works for a city transit agency in a suburb of BA. His pay? About $1000 US/month. To put things in perspective, a very nice 2 bedroom condo in a very nice area of BA would run you $250-500k US. A meal for four at a clean average plus restaurant would run you $ $40 US.. So, our meal for four would be roughly 7-8 hours of his time.
SO, having spent time in a society who saw a literal currency collapse overnight (from 1:1 to 3:1 Peso:USD), my takeaway is that society will survive in the US, though it will change. And like government in Argentina, our government will get 'cheated' of taxes wherever possible, and have to shrink at all levels. People will get along, things will shrink, business will become more localized. Mega malls may well die over time (certainly peak oil will kill them one day). Government will step in to subsidize trains and busses and other things like that to help the lower rungs, and the upper rungs will still get along a-ok -- so long as they do not wish to travel far from home.
This photo of 26 Dec 2004 INDO Tsunami , shows
7 poor persons about to be lost to the " Great Tsunami " ---- A
seismic wave from ~ 9.5 R - scale earthquake , eventually killing
~ 300, 000 persons more or less . As I am a greatly " Visual , &
Image " tending person , I Forsee 2009 to ~ 2012 as being in the
grips & aftermath of .... such a Great Economic Calamity , like this
Tsunami --- a stupendous , unstoppable force of " MASS WEALTH
DESTRUCTION " !! I though that this image has some bearing on
the coming .... Greater Depression 2 !!
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