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Piles of unused cash are toxic to their owners and to the world. We know how to fix that. (Photo by Andrew Magill)
What an investment deal I got for you. Get your checkbook ready, you’re gonna love this. We buy a bunch of bicycles, see, and we put them out all over the place for people to rent, really cheap. They just grab a bike, go wherever, and leave it. To get them used to the deal, we gotta buy a ton of bikes, really saturate the city. And we give them a few months free, then we charge them a little bit a month. Small fees, big numbers, we’ll make 20, 30 per cent on the money for sure. Why did you put your checkbook away? What could possibly go wrong?
You say it reminds you of the oldest joke in retail, about the guy who found a wholesale source of shoes for ten dollars a pair and planned to sell them for nine dollars a pair? Asked how he expected to make any money, he replied, “Volume!”
Yes, the bicycle scheme sounds just that dumb. Yet in a frenzy that came out of nowhere just two years ago, 40 — count them, 40 — companies in China raised over $2 billion in venture capital to execute the bicycles-for-hire business plan in cities around the world. In a few crazed months, in addition to the venture capital, one startup — Mobike — was acquired for $2 billion. Another — Meituan — did an initial public offering of stock that raised $4.2 billion.
What could possibly go wrong? Well, raising the money and buying the bicycles and advertising the concept went well, a good time was had by all. But at the end of the introductory free-use period — which was necessary to get market share in a market being contested by 40 companies — half the bikes had been stolen and other other half were pretty much wrecked. With no bikes left to use, nobody signed up to pay the fees, and those who did immediately demanded refunds. The companies might as well have chosen the nine-dollar-shoe business plan, because they are all winking out of business now, their billions of dollars in capital gone with the wind.
Where did all those billions of dollars come from? Can there really be that many rich idiots in the world?
Well, maybe. But I’m thinking the big spenders are really wealth managers playing with other peoples’ unearned wealth. Billionaires can only spend so much money on themselves, and no matter how hard they try they have these piles of unearned and unused cash lying around. And of course they want more, so they turn the piles of cash over to wealth managers and say, go out there and get me a 20 percent return, or I’ll find someone who will.
So the wealth managers get on the phones and launch their desperate searches for the next big, 20-percent-return thing, which are about as common in the real world as palomino unicorns. Their lust to keep their jobs, added to their clients’ lust for more of everything, adds up to a giant aching need with the IQ of a toddler and the critical mass of a buffalo herd.
When these guys and gals get a whiff of a sure-thing, slam-bang, 20-percent return, they stampede — into dot-coms once upon a time, into oil fracking, more recently, into farmland in Canada or Africa or wherever, into driverless cars or stem cell research or artificial intelligence or whatever scam is currently on their radar. They convince themselves that something’s going to work, they inflate a giant bubble as they fall all over themselves pumping money into the thing, then the bubble explodes and they go on to the next concept, leaving burned ground and human casualties behind.
The agents don’t mind so much, because hey, it wasn’t their money and they never have to return their fees. And the investors don’t seem to mind so much either, because the money keeps on piling up and you have to do something with it.
And there you have the core argument for the confiscatory taxation of excess wealth. We — the United States — used to do that. As recently as the Eisenhower Administration the top tax rate on the wealthy was 90%. When the income tax was first introduced, it was not levied on wages at all, it was only applied to what are known in the upper classes as rentiers — people who make their money with their money.
What we knew than, but have forgotten, is that unearned money is bad for people, and taking it away from them is a blessing. Plus, the piles of money that are toxic to rich people are good for the people when turned into roads and bridges and schools. (Eisenhower’s Interstate Highway System was built with rich peoples’ money. Since we quit taxing the rich, we can’t afford to fill the potholes in it.)
Alexandria Ocasio-Cortez, the Wonder-Woman Latina congressperson from the Bronx, has proposed a top tax rate of 75% for people making more than $10 million a year, to raise money to fight climate change. The right wingnuts are screaming “socialist!” But it’s as American as apple pie. Just ask General Eisenhower.
As yet another way of procuring more returns on their wealth, if I’m not mistaken, the billionaires and their lackeys sometimes (if not often) manipulate the geopolitics of this or that region around the world, causing endless strife and turmoil and profiting from it all. This was supposed to be Soros’ favorite game.
The courts are exceedingly splendid,
While the fields are exceedingly weedy,
And the granaries exceedingly empty.
Elegant clothes are worn, sharp weapons are carried,
Food and drink enjoyed beyond limit,
And wealth and treasures accumulated in excess.
This is robbery and extravagance.
This cannot be the Way.
(Laozi, Daodejing Chap 53)
And all this time I thought it was a rapacious ape following it’s biological programming and the Maximum Power Principle who was doing the destroying.
Blaming a human constructed ideology for doing something humans have been doing (overshooting) since they evolved behavioral modernity is the same as blaming the human constructed guns & bullets for killing.
Since when has the ruling and upper management/priestly classed ever not behaved as they are now? Since when have the masses not been as degenerate as the society will allow? For a brief period from 1945 to 1975 which only let SOME of us white folk countries build a the most equitable societies in history and even then we always had elites and underclasses. We were afforded the opportunity to be better angles of our natures courtesy of cheap abundant energy. The 30 years was the ‘Golden Age’.
And the whole time, including now, the US, Britain, France and other euros and their white colonials were plundering the planet and subjugating much of the humans to slavery, in all it’s forms, and poverty.
The record speaks for itself.
Up to date record of US imperialism. Make popcorn.
List of Atrocities committed by US authorities
Definition: An extremely wicked or cruel act, typically one involving physical violence or injury.
“If there is a country that has committed unspeakable atrocities in the world, it is the United States of America. They don’t care for human beings.” – Nelson Mandela
https://github.com/dessalines/essays/blob/master/us_atrocities.md
If there was such a thing as justice then the US and rest of the west deserves it’s collapse and suffering. There is no real justice and the reason we’ve been on a 500 year terror is because we could. If the energy was there China and her friends would be the next Ape kings and bury us. Hell, they even have legit reasons for payback, but if they did not, they would simply conjure up their version of white man’s burden.
The only thing different this time is scale.
I was with you until the last sentence.
“The only thing different this time is scale.”
Scale of what? Overshoot and collapse?
If that’s the case, you know where I stand. Collapse at this stage of human “development” will lead to a dead planet, there is simply too much “nuclear detritus” laying about, most of which will be released, post-collapse, into an atmosphere not designed to absorb it.
So we are here, at a potential/probable great filter end point. How we arrived at this end point is basic history, the only relevant question going forward is, what do we do now? Quit or fight?
Those are the two options. Though it will probably always prove impossible to rewire the biological programming of the rapacious ape, if we are to fight, should we not at least make an attempt to construct a human ideology that could constrain, for all time, the worst angels of its nature?
I wouldn’t count on it, Max. Ideologies, like all contrivances born in the neocortex (language, tools, machines, governments, arts, etc…) are very recent in the hominid experience. Though impressive on the face of it, such artifices serve only one purpose – to facilitate the fulfillment of our basic animal drives. These ancient desires, or instincts if you will, so dominate us that the numerous and diverse ideologies concocted over the millennia to lend some form of transcendence to the individual and/or collective human experience have proven hopelessly inadequate to stem the powerful riptide that Carl Jung calls the ‘id’. Johnny Cash refers to this force as ‘The Beast in Me’.*
*Check it out on youtube – it’s a hoot!
Who is to do the restraining, Max? Other humans? At our core, we are all the same, give or take a bit. Apneaman said it; any race, country, tribe, when given the opportunity, will abuse it. There really is no answer to our dilemma. Thinking about the possibilities may be a good mental exercise, but ultimately futile.
Greg, Darrel, Apneeaman, well said all.
At the Battle of Cannae 217 BC, 65,000 Roman heavy infantryman were surrounded by the forces of the invading Carthaginians and slaughtered almost to last man.
The tactics that led to the Roman army’s encirclement and destruction are well known to history (it is, after all, the most studied battle of them all), but what is not known and never truly will be, is how the thinly spread and outnumbered Carthaginians, using nothing but sharp-edged weapons, managed to hack down 65,000 better armed* fighting men over a span of 6 or 7 hours, without suffering nary a scratch.
Roman sources on the subject are scant (as always), and a modern excavation of the battle-site was never attempted, as the remains of the battle were centuries removed, so the conclusions are ours to individually draw; what happened in the collective psyche of the Roman army on that field and on that day, that could allow 65,000 warriors, wielding literally the best cutting-edge weapons of the time, to all be butchered like lambs?
Note: I’ve said for many decades, if you want to understand the true depths of the human “heart,” you only need to do two things: study the Einsatzgruppen from the perspective of a German policeman, who has volunteered for one of the deployment groups; or, imagine yourself in the center of the Roman formation at Cannae, and you have hours to make your decision, when the time comes, do you fight, even if you can provide but a few moments of token resistance, or do you kneel before the enemy, and bow your head, and offer up the back of the neck for the easiest and swiftest kill?
*Yeah, the Carthaginians were always scavenging Roman weapons after battles. Even at that early stage of the Roman experience, their killing tools were the best.
The thing about the marginal tax-rate of 70% that AOC proposed is that only income above about ten million dollars made in a one-year period would be subject to this tax. I just thought I would point this out, as such finer points tend to get drowned out in all the Randroid screaming about this proposal.
“Randroid screaming…”
Excellent. That’s exactly what it is.
President Eisenhower. Thanks for the education. Unfortunately he gave us Nixon. Kennedy didn’t have a chance. Last man I trusted, Ike. Although tainted by Sen McCarthy. My how times have changed. Or have they??
That’s a good article!
Please could you add a link to your posts to make it easier to Tweet, post to FB etc