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  • On 19 Apr 2014 in The Alienation of Work, Reality said:

    Rin says

    Reality says

    New jobs will emerge to replace them

    Fewer and fewer, as the decades roll by. Look, I work for monied interests and one of the things they don't like is ... headcount.

    If a rich person can create a fully automated company and only have a CEO and a few salespersons, that's what they'll do.

    So do they then spend all their time and earned money on Amazon? No! They spend that profit from automation on their wives, girlfriends, kids going to school and taking after-school dancing classes, personal trainers, house keepers, land scapers, chauffer, personal cook, etc. etc. These are all jobs! Working the production line will indeed be as obsolete as farm jobs a century ago.

  • On 19 Apr 2014 in The Alienation of Work, Reality said:

    What you are saying is that actuarial jobs will be replaced by computers, just like typist jobs were replaced by computers. New jobs will emerge to replace them, so long as the government does not subsidize unemployment to such a degree that sucking off the government's teets becomes more comfortable than kissing the asses of bosses and consumers.

    Seriously, when all else fails, kissing asses can be a real job. I for one would rather have my ass kissed by a real human being than by a machine. LOL.

  • On 19 Apr 2014 in Corrupted Capitalism and the Housing Crisis, Reality said:

    Wars often boost GDP. They do not boost the real economy, but usually destroy the economy or at least distort the economy into war production that has little peace time value in the eyes of individual consumers.

    Keynes' main career achievement was conflating GDP with the real economy. The poisoning of mind has been carried out wide and deep. Before Keynes, GDP was a metric for debt service capacity, not the size of economy (except from the perspective of a bankster trying to extract from the economy).

  • On 19 Apr 2014 in Corrupted Capitalism and the Housing Crisis, Reality said:

    sbh says

    It boggles the mind of a sentient being that some people would lay our fate at the feet of a sociopathic system that values only efficiency and profit.

    That would be socialists trying to plan an economy according to their own visions of efficiency. Whereas in a relatively free market place, individual participants express their wishes and relative orders of importance through their purchase decisions. "Profit" in a relatively free market place means satisfying more of other people's "wants" at the cost of less "sacrifices" by other people. That may indeed be anathema to people who desire to build their own political grandeur at the expense of other people's blood and sweat.

    I am an archetypal Scot: I revere thrift. But, as a world participant, and not a mere pedant, I recognize that government is not subject to the rigors of markets.

    What's that supposed to mean? Are you saying that the person wearing government costumes should be able to extract resources at will from others for free? without consent from the victims?

    Conversely, who in their right mind conditions markets to the benefit of government?

    That would the government officials regulating the market place to their own benefit. That's the bulk of the current law making process: proposing a law that threatens the livelihood of an industry then wait for the industry to cough up political donations; once the existing firms are paying up, they may as well pay to have laws in place that would limit competition. The ultimate loser in this game are the consumers. The corporations are essentially being tax-farmed by the politicians, to extract political donations.

    Only the simple-minded see the two as having the same goals or the same set of demands. Only government can stand up to the power of capitalism.

    The government has no goals, nor do corporations per se. Both are artificial entities, puppets. Real people use government and corporations to gain advantage over other real people. Often times it's the same people going through the revolving doors between government and corporations.

    Only capitalism can give virtuous life to the stored labor of human industry.

    Do you really think the craftsmanship that went into the horse carriage had less "stored labor" than the stamped steel auto body shell? "Stored labor" is irrelevant just like Marxist Labor Theory of Value is irrelevant and wrong. The value of an object is in the eyes of the beholder and relative to other objects. That's why central planners making decisions on other people's behalf are doomed to failure. Individuals have to be empowered to make decisions and make choices for himself and herself.

  • On 19 Apr 2014 in Corrupted Capitalism and the Housing Crisis, Reality said:

    hrhjuliet says

    SBH, your entire comment completely made my day. I can now go to bed not feeling that the world is overrun by sociopathic ignoramuses. It truly does help me sleep. It is rather comforting to know that there are people in the world with a conscience and an intellect. Cheers.

    LOL, SBH is a sociopathic ignoramus. He wants to structure your life. He thinks he is a great orator like Hitler.

  • On 19 Apr 2014 in #1 Cause of Death,, Reality said:

    Special Ops forces are delicate instruments, honed by extensive training and excellent pay. Over-use a precision instrument makes it dull and dysfunctional. Add a few years of rapid inflation devaluing their salaries and domestic strife lowering their morale, you end up with the farce like the failed Iran hostage rescue operation in the desert in 1980, which involved all the Special Ops branches.

    On top of that, using Special Ops domestically will eventually run into the late Roman Empire problem: the pretorium guards became good at one thing -- replacing emperors. Not even their own members could fend off the replacing act.

  • On 19 Apr 2014 in The Alienation of Work, Reality said:

    Rin says

    Folks, a lot of ppl don't get it, starting circa ~2025, a lot of work will start to become automated due to robotics/AI.

    In the transition period, from 2025 to 2050, there will be no more meaningful work for ppl to produce.

    As that occurs, a massive state/govt welfare state will need to evolve so that those who can't find work, which then will include actuaries, paralegals, pharmacists, and countless other former white collar tasks.

    Thus, we don't need to worry about politics because in effect, ppl will become redundant, as worker bees.

    A lot of work are already automated, for example farming with the GPS-controlled combines. Farming accounted for 80% of jobs in the US a century ago. Now only 2%. Somehow those 78% managed to find "new" jobs in the past century, which probably produced more than 200% new jobs, as more than half of the jobs created a century ago probably already disappeared.

  • On 19 Apr 2014 in The Alienation of Work, Reality said:

    Indiana Jones says

    Soap. Soap to be made either by individuals in the collective or if no one knew how to make soap, the collective would acquire it from another collective that did. Your soap is not a personal decision. It is a collective decision. You no longer have 63 bottles of salad dressing to choose from. You have 4. But those four are made lovingly from food grown organically by people in your collective and our healthful and delicious. And you don't have to buy it anymore, it is part of being in the collective and contributing your work.

    In other words, the "collective" would grant the 4 an oligopoly. In order to protect the "domestic" big-4 soap producers, I suppose the next item on the "collective's" agenda is import tariffs on soap bars from elsewhere.

    Corn. If the collective wants to switch their supplier of corn, then they can contact Bob's collective to see how they can work out a trade with them for their plump corn.

    Why should such a decision be made by the collective instead of by the individual? Do you want your Condo Association busybodies do your grocery shopping every week?

    Or they can ask Bob how to get that plump corn and grow their own. The collectives share info with each other because they are interested in bettering lives of all and there is no need for competition. Competition is based on scarcity, and there is no scarcity.

    If you truly believe there is no scarcity, can I move in your house this weekend? and help myself to, not only your food and clothing, but also your sexual charms? There is no scarcity, right? Why doesn't your husband share every piece of info with me, about YOU! including hands-on experience!

    What you are proposing here is essentially the Stalinist Collectivization, and Maoist / Pol Pot Communes. If you think the previous paragraph was crude, trust me, when collectivism comes like it did for the hapless Russians, Ukrainians, Chinese and Cambodians, you will not own your own body. Your feminine charms will belong to the "leaders" whether you like it or not. You will be starving so badly you will offer yourself up to the "leaders" just to get a can of tuna or even less, like so many thousands/millions of women did in those countries. People need to realize that, in addition to the 100+ million people killed by those collectivization attempts in the 20th century, there were billions people who had to live through dehumanization that came before deaths.

  • On 19 Apr 2014 in Money has corrupted us. We no longer understand what it's worth, Reality said:

    sbh says

    CaptainShuddup says

    Do you know the dollar was worth a dollar all the way until the end of World War II

    No matter what Faux Noise tells you, a dollar is still worth just a dollar, Captain.

    The US Dollar was defined by the Founding Fathers according to the average circulating weight of the Spanish Silver Dollar in North American colonies (and most of the world then not on British gold standard). That silver content weight was about 3/4 an ounce of fine silver, meaning the 90%-silver disc minted by the Spanish colonial government using (what is now) Mexican silver had about 3/4 troy ounce of pure silver in it. Prior to 1873, anyone digging up silver from the ground could ask the US Mint to turn that newly found silver into dollar coins free of charge. That was the money supply for base money. i.e. money supply was literally in the hands of the people, usually those who were desperate enough to hack the ground and get silver out of it, instead of being in the hands of a bunch of academics selected by the banksters. After silver was demonetized, the value of US dollar became defined by gold alone, at about 1/20th ounce of fine gold (meaning a 22karat disc containing almost an ounce of pure gold had a face value of $20). The dollar value in silver terms actually went up as a result, peaking in the early part of 20th century at a dollar buying nearly 6 ounces of silver. That ratio dropped precipitously after WWII. By the late 1960's, the dollar became worth less than 3/4 of ounce of silver, and stayed below that ever since, now at less than 0.05 ounce of silver.

  • On 19 Apr 2014 in Corrupted Capitalism and the Housing Crisis, Reality said:

    drew_eckhardt says

    hrhjuliet says

    But the private firms are not simply free to respond to market signals. Instead, under a corporatist structure, the government directs firms in the ways in which they should employ their resources, sometimes through moral suasion, but more often through regulation, tax policy, and legal directives.

    Or the private firms have the government operate on their behalf to provide tax breaks, limit competition, make below market rate loans, buy their product, subsidize their sales, and compel purchase of what they sell.

    I think you guys are talking about the same thing. Government favoritism to some and the burden of government on others are the two sides of the same coin. The government itself is a net consumer; it can not provide favoritism to anyone without first taking the cost of that favoritism from someone then add on its own cost of running the bureaucracy to enforce the tilted playing field.

  • On 19 Apr 2014 in What if Bundy had been a deadbeat black man or native american?, Reality said:

    sbh says

    With so much public land in the west, and the mandate for multiple use, and budget cutbacks pressing the BLM to mothball road systems and access to large swaths of country, should the government start selling off remote territory to ranchers or wealthy Ted Turner types?

    Yes.

    Even transferring "ownership" to the individual state or county would make things better than the current imperial administration of land from "Rome." The current imperial bureaucracy approach invites cronyism and corruption. The approach was tolerable when most of the land was inaccessible or un-useable. However, now the land has clear market value, it's a grave error to continue manage it through a bureaucratic central government commune approach. The result is not equal access by all but some insiders are always more equal than others. The lack of a transparent market to handle necessary transfers between different usages will always lead to inefficiency and corruption.

  • On 15 Apr 2014 in Detroit Sells Homes for $1,000, Reality said:

    bob2356 says

    zzyzzx says

    It is almost impossible to think that any large American city would be forced into the position to sell broken-down homes online.

    Obviously the writer isn't old enough to remember the 70's. If online existed then many of the cities would have done the same thing. Baltimore sold a bunch of white stoop houses for $1.00 each. Jersey CIty was essentially giving houses away. A friend of mine bought an entire 3 story firehouse which was huge for 12k in downtown Jersey CIty. I thought he was nuts. I was so wrong.

    Out of curiosity, what did he do with the firehouse?

    Those clearance sales are crucial to the revitalization of a city. New owners with zero debt (and hopefully low property taxes too) will have money to float the local economy. Both taxes and mortgages are cost of doing business and staying alive in a community.

  • On 15 Apr 2014 in Japans Population Shrinks for Third Year, Reality said:

    Bellingham Bill says

    What happened to Japan was they hit a wall wrt growth.

    http://research.stlouisfed.org/fred2/graph/?g=xqk

    real GDP blue, employment red (right axis)

    Japan was running a very high-debt economy 1960s-1980s, but the music stopped for them in 1990 and their high leverage in the private sector could not be repaid, too many speculators caught out by the change in credit conditions and loss of bubble pricing mentality.

    Japan hit a wall called "the limitations of central planning." Their rapid economic growth in the 1950's-70's was largely the result of copying the good practices of the US. When they reached the US level by the 80's, they ran out of good things to copy. So their central planners copied and improvised upon a massive monetary bubble, bigger than even the US original back then. That's the fundamental cause of their stock market bubble and real estate bubble.

    Japanese population stagnation is also the result of central planning and massive financial bubble: the funny money spewed out by the Japanese central planners have resulted in a warped population distribution, with too many people attracted to the tightly packed metro areas, where money printing is taking place. We know damn well that urban populations around the world tend to have negative population growth. It is the suburban and rural incubators that replenish the urban "lost" population generation after generation. Japanese monetary policy and central planning economic model simply have made their rural / suburban population incubators threadbare.

  • On 15 Apr 2014 in Japans Population Shrinks for Third Year, Reality said:

    Bellingham Bill says

    Chicago Boys ran Argentina into the ground in the 1990s

    "Record foreign debt interest payments, tax evasion and capital flight resulted in a balance of payments crisis that plagued Argentina with severe stagflation from 1975 to 1990. Attempting to remedy this, economist Domingo Cavallo pegged the peso to the U.S. dollar in 1991 and limited the growth in the money supply. His team then embarked on a path of trade liberalization, deregulation, and privatization. Inflation dropped to single digits and GDP grew by one third in four years;[2] but external economic shocks, as well as a dependency on volatile short-term capital and debt to maintain the overvalued fixed exchange rate, diluted benefits, causing the economy to crumble slowly from 1995 until the collapse in 2001"

    Let's translate this: the Argentine economy was in the ground prior to 1991 (remember the Latin America debt default around 1990??). The Chicago boys rescued Argentine economy, giving rapid growth at low inflation for half a decade or more. Then the damn socialist government/culture couldn't resist money printing. What else could "overvalued fixed exchange rate" mean? Only the Argetine government could print Argetine Peso; it's not like the Peso was a fruit naturally grown on trees. Fixed exchange rate was designed as a mechanism for limiting local currency printing, just like when the US Dollar was fixed to gold and silver. The fix is never over-valued unless the government starts to cheat and print more money than it should have, like LBJ did and made the Bretton Woods fix rate "overvalued" and untenable.

  • On 15 Apr 2014 in Japans Population Shrinks for Third Year, Reality said:

    Bellingham Bill says

    Believe it or not I'd like to build a ~20-unit apartment bldg in Tokyo serving gaijin like me. There's a screaming market demand for low-BS housing for foreigners.

    Believe it or not, the market price is a mechanism to keep the outsiders out. LOL. I'm sure you'd love to have a condo in SFBA or NYC too. Too bad so does everyone else and his dog.

  • On 14 Apr 2014 in I find it interesting...., Reality said:

    What the typical academic geographers call "plateau," the local people in Nevada call "high plains."

  • On 14 Apr 2014 in San Diego woman outbid of her dream home exacts strange vengeance, Reality said:

    This is actually an argument for higher prices: since each family needs a house . . . there would be just as many people getting out-bid at lower prices, especially if lower prices induce more people into the buyer pool in search for a chance of a life time. Higher prices would also induce builders to build more, so as to alleviate the perceived shortage.

    Jokes aside, this loony might destroy the whole neighborhood someday if she won the bid.

  • On 13 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    tatupu70 says

    Reality says

    Which part of my second sentence quoted by you above don't you understand? I addressed yield chasing already. "So long as cash flow works" (an expression from your earlier post) has a specific meaning: positive cash flow. That does not apply to cash buyers. Cash buyers are yield chasers

    And yield is determined by cash flow. Didn't think I'd have to explain that to you.

    No, you didn't have to. I already addressed the ROI on cash investment in my original post. You were the idiot who didn't know what "so long as cash flow works" means in real estate investing (and many other lines of business that live off loans); that is a reference to marginal borrowers and ponzi borrowers who have to roll over debt principal on continuous basis.

  • On 12 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    tatupu70 says

    Reality says

    tatupu70 says

    bgamall4 says

    Because the Fed forces the house prices up in the midst of wages declining.

    You keep saying that, but can't explain how.

    Lower interest rate translates into higher rent cash flow multiple for the price of the asset. That makes the asset owners richer, exacerbating the wealth disparity.

    That wasn't the question. Read more carefully next time.

    That was the question. You are projecting your own reading comprehension deficiency. Why do asset prices rise despite stagnant economic conditions? Because lower interest rates give the meager cash flow a big multiplier in the equivalent of P/E ratio for real estate.

  • On 12 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    tatupu70 says

    Reality says

    Cash buyers by definition don't worry about cash flow, as they have no loan to service. Cash buyers are chasing yield, which becomes a necessity also due to FED interest rate policies.

    lol--you're kidding, right? They don't care about ROI? Cash flow and yield are basically the same thing.

    Which part of my second sentence quoted by you above don't you understand? I addressed yield chasing already. "So long as cash flow works" (an expression from your earlier post) has a specific meaning: positive cash flow. That does not apply to cash buyers. Cash buyers are yield chasers.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    tatupu70 says

    bgamall4 says

    Because the Fed forces the house prices up in the midst of wages declining.

    You keep saying that, but can't explain how.

    Lower interest rate translates into higher rent cash flow multiple for the price of the asset. That makes the asset owners richer, exacerbating the wealth disparity.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    tatupu70 says

    bgamall4 says

    Low prices were driven by lack of credit. Credit availability drives home prices. If the banksters pull the plug, your house worth 900k in the SF suburbs could drop to 200k. But they won't do that unless they have no other choice since it hurts the banks. But it could happen.

    The last 5 years should have convinced you that that wouldn't happen. All cash investors come in and buy when the cash flow works. They don't let prices fall that far...

    Cash flow would not work for 900k houses, unless we are talking about a large apartment building with 10 or more units.

    Cash buyers by definition don't worry about cash flow, as they have no loan to service. Cash buyers are chasing yield, which becomes a necessity also due to FED interest rate policies.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    Peter P says

    I don't think a bank account is supposed to give you any real return. "Risk-free" interest is merely a compensation against the loss of purchasing power over time.

    Let's also not forget the time value and cost of delayed gratification.

    Why should anyone get a return without putting his capital at risk?

    There should be risk with putting money as deposit at the bank, just not the same risk as bonds issued by the bank (one tier lower on precedence) or stocks of the bank (one more tier lower).

    Middle-class retirement is a recent phenomenon. In reality, it is more like a Ponzi scheme created in the last century. People should NOT be assured a future, because it is not written yet.

    A great society does not pursue certainty for its people, rather, it embraces uncertainty.

    Agree with the sentiment. However, retirement and taking care of surviving spouse (usually old female) used to be something that the upper middle class were able to do before the central bankers made a hash of people's savings. Comes to think of it, while full retirement was not possible for the working class, even the middle class historically had savings to supplement their income at advanced age.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    control point says

    Reality says

    If you want to argue for argument's sake, your kryptonite is that the table is for 2009, and the year on the calendar now is . . .

    That's point #1. Point #2 is 20.19 > 20. So you lose.

    LOL, Reality. This passes for an argument in Cambridge? How the mighty have fallen.

    That was the essence of your technicality argument. I only learn from the best.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, Reality said:

    control point says

    Nope,. life expectancy for a woman at age 65 (as I said) is 20.19 years.

    http://www.ssa.gov/OACT/STATS/table4c6.html

    Assuming there aren't other smart guys in the room, your kryptonite.

    Thanks for the explanation of life expectancy that I already knew. Unfortunately for you I am right and your assumption that I didn't know that is wrong.

    If you want to argue for argument's sake, your kryptonite is that the table is for 2009, and the year on the calendar now is . . .

    That's point #1. Point #2 is 20.19 > 20. So you lose.

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