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Keyword: ‘On the Necessity of Being a Multi-Millionaire under Late Capitalism’

On the Necessity of Being a Multi-Millionaire under Late Capitalism: 3

August 8, 2020 21 comments

In the previous part of this series, I wrote about how housing polices of countries in anglosphere are optimized to benefit those who have lots of money rather than satisfying the housing needs of everybody. That is why, in the past 40 years, housing prices and costs have gone up far faster than the “official” rate of inflation. This is also the reason why developed countries outside the anglosphere have a far wider range of housing and why anglosphere countries have unusually high number of homeless compared to other developed countries. Now let us talk about the cost of education under late capitalism where, once again, we see a very similar trend. FYI- I plan to cover the effects of late capitalism on medical costs in future parts of this series, however that subtopic is almost certainly going to require more than one post.

Anyway.. back to the topic at hand, have you ever wondered how the cost of higher education rose so much in certain “developed” countries during past four decades? Some of you might not believe it, but there was a time when attending public universities in this country cost very little. Boomers such as MikeCA could attend well regarded public universities for the equivalent of less than five thousand dollars in today’s money, while doing so right now would cost approximately 20-40 thousand per year. But there is a even bigger question- namely, why hasn’t attending universities in other developed countries (especially outside anglosphere) become similarly expensive during the past 40 years? What explains this most peculiar difference?

While I encourage you to confirm it (with Google, or even better- Bing), the yearly fees at public universities in countries ranging from Italy, France, Germany to Japan, South Korea, China are between 1-5k dollar equivalent (or adjusted for purchasing power). They are even lower in most central and east European countries. In other words, university fees in rest of world retain the same relation to income as was the case in USA between 1945 and mid-1970s. And let’s face it, the quality of undergrad education at a decent public university in one developed country is pretty much identical to that in another. To put it another way, the student who spends 20-40k per year for attending an undergraduate program at UCSD or Berkley is not learning anything different or better than his or her equivalent attending a similar university in France, Germany, Japan or in any other developed country. So what is the ‘murican student paying extra for?

1] The first reason for the higher fees at universities in USA (and anglosphere in general) comes down to the changing employee composition of universities in these countries. Forty years ago, the number of teaching (and research) employees at these universities were almost always larger than the rest, and administration-types were typically outnumbered 2:1 by faculty. Today, almost every single university in ‘murica has anywhere between 2 to 4 times more administrative-types than faculty. To make matters worse, these parasites typically get paid almost as well or better than faculty. So how do universities try to control costs? Well.. by not hiring faculty positions and increasingly replacing them with temporary sessional “instructors” who are often paid wages below the poverty line. Universities in anglosphere are, nowadays, run as employment schemes for administration-type parasites. Providing higher education is, at best, a very secondary goal.

While universities in non-anglosphere European countries have also seen some administrator bloat, it is noticeably smaller. Moreover, the differences in pay-scales between them and faculty combined with the generally higher degree of government funding for higher education in those countries have kept things far more reasonable in those countries. But how is administrator bloat in anglosphere universities related to late capitalism? One of the distinguishing features of late capitalism aka neoliberalism aka financialism is its very strong emphasis on performative bullshit rather than actual results. There is a reason why LIEbrals in this country think Obummer was a great president, when at best he was a failed mediocrity. That is also why companies in the anglosphere are constantly talking about “empowering women”, “elevating black voices”, “celebrating trans” etc rather than paying their employees a decent wage.

Administrator bloat is about creating the optics of doing something rather than actually doing anything useful. It is about creating the illusion of work through endless meetings, conferences, seminars and reports by people with borderline parodic job titles. It is also about late capitalism obsession with “metrics” and other minutiae that are irrelevant in real life. So why does this administrator bloat keep growing. Well.. how many of you would refuse an office job which paid well, had a nice pension plan etc even if it required you to perform totally useless “work” and maintain ideological conformity at the workplace. Also, administrator-types hire more underlings to enhance their status even if it means destroying the original institutional mission.

2] The second reason why the cost of universities in the anglophone (especially USA) has gone up a lot in past forty years is also linked to late capitalism. See.. in late capitalism, government’s main function shifts from maintaining an equilibrium between money and labor to facilitating the looting of everybody else for the benefit of a select few super-rich people. Part of this process involves the government cutting taxes for the rich while simultaneously funneling more money towards them. One of the main reason why government support for universities has declined over past 40 years in certain countries has to do with reduced taxation of large corporations and the rich. Guess how universities in those countries make up for that funding shortfall..

But there is more. As part of their acceptance of the cult of neoliberalism, governments in the anglosphere have also privatized many services which once helped universities make some money. These range from meal plans for students in residence, management of residences, maintaining and renting out sports and other facilities etc. So, not only have neoliberal governments in the anglosphere reduced their contribution to the budget of universities but they have also crippled their ability to make some extra money from services which they used to provide in the past. But wait.. there is more.

Another feature of late capitalism is the strong desire to extract ‘value’ from things which either should never be treated that way or look for alternative sources of money for continuous growth once they have depleted the surrounding environment. This is where all those overseas students, especially from some Asian countries, come into the picture. It is no secret that universities in the anglosphere have aggressively recruited students from well-off families in Asian countries to fuel the latest stage of their pyramid scheme. And why not.. those students pay far more in fees as well as live in the more expensive new residences. Increased “diversity” of the student body, therefore, is not about combating racism. Instead it is about collecting lots of money from Asian students wanting to get credentialed from a university in the anglosphere.

In the next part, I hope to write about how late capitalism has created a dysfunctional and very expensive “healthcare” system in this country.

What do you think? Comments?

On the Necessity of Being a Multi-Millionaire under Late Capitalism: 2

August 2, 2020 8 comments

In the previous part of this series, I made a point that over the past 30 years, living standards of almost everybody in west have diminished considerably. This has occured due to the convergence of two factors. Firstly, the cost of the basics such as houses, automobiles, higher education and in case of USA- healthcare, have increased far faster than “official” rate of inflation. To make things worse, wages have either remained stagnant or decreased and in an increasing number of cases- the jobs have been shipped overseas without being replaced by anything comparable. Even the few well-paying jobs left in this country have become far less stable than they used to be just two decades ago. Furthermore, these changes have impacted those under 40 or 50 much harder than those above that age. So it is not just a “Millennials”, “Gen Y” or “Gen Z” thing.

So now let us talk about the role of financialism aka late capitalism aka neoliberalism in creating this terminal dystopia. Make no mistake, the situation the west (especially USA) has gotten itself into is, for all practical purposes, terminal. It has also fucked over the 99% to enrich the 0.01%.. and yes, there is a reason I wrote that sentence the way I did. To better understand what I am going to talk about, let us compare USA (the most afflicted country) with others such as Japan, South Korea and Germany (among least afflicted). How is life different for the median person in the least afflicted countries compared to the most afflicted one? Let us start by talking about the relative affordability of decent quality housing in nice or even OK neighborhoods.

If you have seen vlogs of expats in Japan and South Korea, one thing becomes obvious rather quickly. While many of their less expensive apartments are small- almost every single one of them is reasonably well built, adequately furnished and in areas that are not sketchy. Note that apartments in these countries come in a range of sizes allowing even somebody in a menial job to have an OK place of their own. More curiously, unlike in the anglosphere, East-Asian countries have been able to ensure that the rents and prices of these apartments are strongly linked to real income of the people. Even somebody living in Tokyo or Seoul, two of the largest megalopolises on earth, can easily find safe and affordable housing that is not too far away from their place of work and other amenities. Oh.. and they have excellent public transit systems.

Now compare this to the situation in Bay Area, where even a shitty bachelor suite within some century old building in the Tenderloin district of SF is somewhere between 2500-3000 $ per month. The same holds true for NYC, where anything that affordable in a non-sketchy area is both rare and rent controlled. Without going into too much detail, the same holds for other metropolitan areas in this country such as the LA megalopolis, Boston and its suburbs, Chicago and its suburbs, DC and its suburbs… you get it, right. But why is it so? Why can you find very affordable and OK apartments in two of most urbanized countries on earth with very little flat land suitable for building cities but not in one of more sparsely populated countries with tons of open areas suitable for expansion of cities?

But why restrict our comparison to East-Asian countries? Even more USA-influenced western countries such as Germany, Czech Republic or less-influenced ones such as Italy or Spain have no shortage of decent and affordable housing in their largest cities- with some exceptions like Frankfurt. My point is that the disproportional increases in cost of housing in Anglosphere and closely associated countries (Netherlands, Switzerland) during past 30 years is an aberration among developed countries. But why? Well.. the short answer is that this has occurred due to deliberate government policies, just as the relative inexpensiveness of housing in East-Asian cities is also due to government policies.

The slightly longer answer is that government policies in the Anglosphere have consistently favored the interests of who have capital and land over everybody else. In contrast to that many other countries, especially in East-Asia and continental Europe, have decided that the well-being of the majority is more important than extra enrichment of a minority. And let me remind you that it was not always like that. For the first three decades after WW2, any white person with even a mediocre job could afford to rent or buy a pretty decent place to live in almost any part of the country. Sure.. those places did not have 5 bedrooms and a man-cave, but they were quite acceptable and in OK neighborhoods. Even as late as mid 1990s, the median person with a job in SoCal or the Bay Area could afford an OK house in a non-sketchy neighborhood.

But what does any of this have to do with neoliberalism aka late capitalism aka financialism. Well.. everything! See.. the high and rising costs of housing in the Anglosphere has nothing to with the natural constraints on the ability to build more housing etc. Instead, it is about creating artificial scarcity via rules and regulations to extract an increasingly larger proportion of income from most people to line the pockets of those who already have tons of money so that they can use that extra money to play ever more elaborate sterile financial games which yield no return in the real world. Financialism is a form of parasitism that is too incompetent to even reproduce itself- just look at the poor fecundity of the so-called “elites” and “masters of the universe”.

In the next part, I hope to go into how financialism has fucked up healthcare, education and a whole lot more. We will also go into why boomers were cheering for deregulation in 1990s and early 2000s, which led to the rise of financialism.

What do you think? Comments?

On the Necessity of Being a Multi-Millionaire under Late Capitalism: 1

July 5, 2020 36 comments

A few years ago, I wrote about how the Simpsons show was a marker for demise of middle-class in USA. The point I made in that post was that the Simpson family’s lifestyle, as depicted in that show, was not only possible, but considered normal as late as the early 1990s- when that show debuted. However, today the idea of a guy who barely completed high school having a stable job which pays enough to support a wife and three kids, own a modest house along with a couple of second-hand cars would be considered fantasy. So what happened between the early 1990s and today? How did we go from a point where a stable middle-class existence was the unquestioned norm in western countries to one where most people are heavily indebted precariats with zero chance of a better life in less than three decades- but especially in the anglosphere.

To better understand what I am talking about, let me tell you a little story. See.. there are two reasons why I took the educational trajectory which I ended up taking. Firstly, I liked my area of study and was very good at it. However, there was a second reason- employment in that area provided a guaranteed stable upper-middle class lifestyle for many decades (starting from end of WW2 to the mid-2000s). Even academics in that area could expect a very nice and stable upper-middle class, albeit a bit less well compensated than those in industry. For example, one of my academic mentors (born in 1945 or 1946) became a tenured professor by 30, got married, had three kids, was able to buy a nice house and expand it, buy a second vacation home, decent cars etc, take long vacations, a few sabbaticals, got a steady stream of OK grants and ultimately retired with a decent guaranteed pension.

The important thing is that he was able to all of that with an income equivalent to somewhere between 70-120k/yr adjusted for current levels of purchasing power. Sure, his wife worked too for some years, but she made probably 40% of what he made even in the best years. In other words, it was possible to enjoy a very nice and stable upper-middle class lifestyle for somewhere between 100-150k/yr even if you had three children who had to be put through university. Sure, it helped that the city in question was not coastal California or NYC level expensive. But still.. my point stands, and he was not the only one. As late as end of 1990s and early 2000s, this lifestyle was considered normal for someone in academia- at least in the parts where I lived. Industry paid better, and starting salaries of 80-90k after a PhD were fairly common even in late 1990s. A good number of them ended up making the equivalent of somewhere between 120-150k for most of their careers. Did I mention that the jobs were far more stable then?

Anyway, the point I am trying to make is as follows: it was perfectly possible for a couple making about 200k/year with one or both in pharma or allied sectors to live a very comfortable and nice lifestyle in certain places in NE USA (MA, NJ, non-NYC NY) or west coast (Bay Area, San Diego, Seattle). Also, these jobs came with excellent healthcare packages and defined-benefit pensions. Of course, this has not been the case since 2009- but that is another story. Now ask yourself a simple question, how was the pharma sector capable of providing such nice working conditions for many decades and why did this start coming to an end by middle of early 2000s? It is not as if pharma suddenly became a far less profitable industry, did it? So why did that sector change its business model after decades of it working nicely, starting in the 1990s. Yes.. the rot began a decade or so before things went to shit.

To understand what went wrong in that sector and many others all over the west, you have to begin by asking a simple question- who are corporations run for and by whom. Well.. as it turns out, for many decades after end of WW2, corporations in the west were run to achieve two ends- personal profit for owners of capital AND well-compensated stable employment for the rest. The idea was that a high standard of living would keep people from getting interested in more ‘radical’ ideologies such as socialism and even full-blown communism. But once state communism fell in Eastern Europe by 1989, the west (especially anglosphere) had no reason to balance the interests of capital AND employees. It is therefore not surprising that neoliberalism, which started in the late 1970s, did not really take off until 1991. Yes.. that is why a lot of the deregulation of western economies started after 1991. But what is neoliberalism anyway?

Well.. if I had to define neoliberalism, here is how I would do it. Neoliberalism is an ideology that pretends to profess belief in “free markets”, “free trade” and other totems of classical liberalism such as individualism while transferring power and money from elected government to unelected corporations using excuses based in the bullshit lies of pliant economists and other so-called “social scientists”. For examples, government deficits and ‘printing money’ are very bad if they are used to fund the needs of average people but very smart and correct if they are used to make corporations and a few people very rich. Here is another example- according to this ideology, allowing monopolies and oligopolies to exist is a great idea as long as you can pretend to show that they don’t overcharge customers. Here are a few more examples..

Pretending to care about black lives and diversity is the right thing to do, even if you are actively involved in trying to suppress wages, steal wages and otherwise screw your employees- many of who might be black and non-white. There is a reason why corporations are so enthusiastic about supporting “woke” activism. It is all about maintaining a fake image that nobody but their own inner circle believe in- not unlike Nazis pretending that they were committing ethnic genocide to make the world ‘a better place’ or Zionists pretending that they are on a civilizing mission in the Middle-East. Same crap, different bottle- rinse and repeat. As I have said many times, the difference between LIEbralism and CONservatism is that the former are more vain about their public image, while the later are clueless.

Anyway.. let us get back to the topic at hand, specifically the part about how it is necessary to be a multi-millionaire to enjoy living under late capitalism aka financialism aka Neoliberalism. A few months ago, I decided to calculate the amount of income and wealth necessary for somebody in 2020 to live like an OK paid professor in 2000- in the same city. After some calculations I arrived at an interesting range of numbers. See.. to do everything he did and live with same margin of comfort, a person would require around 300k. But wait.. some of you might say, haven’t you accounted for inflation. Yes, I have and that is why I listed his pay range as 70-120k/yr (over career) adjusted to current levels of purchasing power. And you know something else, that is very close to the current pay range for positions he occupied in that university over his career.

To make another long story short, he simply could not have enjoyed the lifestyle he did had he joined the same university 25 years after he did (so, in the late 1990s) or today. And this is true not just for him and other academics but for most people in pharma, biotech, law and even programming. While Google and FB reputedly pay 200-250k for some of new hires in the Bay Area, I would like to ask you to have a look at living costs in said area. Try finding a modest but decent house within a 30 minute drive of workplace that is less than a million. Have a look at the costs of houses in areas with “good school districts” (an insanity most peculiar to USA). Calculate the costs of sending kids to university even if you get a few scholarships.

And we are not even getting into issues such as age discrimination, poor job AND career security, risk of divorce leading to financial ruin etc. It is so bad that only types of professions currently make enough money to live a secure upper-middle class lifestyle as it existed twenty years ago- medical practitioners and established lawyers. I am sure that some silly valley fuckwit will jump in now and say something about “learning to code” or some other inane bullshit about getting the right credentials. But it doesn’t matter anymore. We have already reached a stage where entire professions from academia, scientists, engineers, accountants, mid-level managers and many many more have gone down from solidly upper-middle class vocations to working class.

And they are the “lucky” ones since professions that once used to solidly middle-class such as assembly line workers, retail staff, construction workers etc have gone from middle and working class to precariat, while those that were working class such as delivery drivers, truckers, hotel and restaurant workers etc have become the working poor. It is no wonder that more than half the people are a couple of paychecks away from irreversible financial ruin. In the next part, I will go further into how financialism aka neoliberalism destroyed affordable housing, healthcare, education and a whole lot more while boomers were cheering for deregulation in 1990s. You will also see more examples of how being a multi-millionaire is a necessity under late capitalism.

What do you think? Comments?

Thoughts on Trends in New Automobile Sales and Neoliberalism in USA

July 19, 2020 10 comments

While trying to write the next part of my series, about the necessity of being a multi-millionaire under late capitalism, I had an interesting insight which didn’t fit in that series but was, still, very important. In some ways, this is a much belated sequel to one of my older posts about how the increased cost of cars is about late capitalism in action. In that post, I made the observation that the much diminished interest of Millennials, Gen Y etc in car ownership has a lot to do with the deleterious effects of late capitalism aka neoliberalism (specifically its american variant) on their lives. Also, I am not hopeful about late capitalism disappearing without causing far more damage and misery to almost everybody. Things are going to get far worse.. I mean.. interesting.

The first time I considered writing this post was about three years ago when we started hearing about how american automobile manufacturers were going to end the manufacture of everything other than pickup trucks, crossovers and a few high-margin car brands. At that time, the most common explanation floated for this shift centered around how american consumers had fallen out of love with cars and gone for pickup trucks and crossovers. Even at that time, I though this explanation sounded highly dubious- but was just not interested in following it, as this occurred at around same time as election of Trump. But I seldom stop thinking about an idea or topic, even if it is on the backburner.

A few days ago, a number of random occurrences made me seriously revisit this topic. It started with a seemingly random search about the number of automobiles sold in USA by year from 1978 and 2019. It yielded this graph, which displayed some rather interesting information. Note that 16 million vehicles were sold in 1986, when the population of USA was 240 million. Interestingly, 2019 saw the sale of only 16.9 million vehicles at a time when population is 328 million. Do you see the problem? Let me explain.. having an automobile is necessary if you live in almost any part of USA except perhaps NYC, Boston, parts of the Bay Area and a few other cities with OK public transit. Therefore, the ratio of vehicles to population should remain relatively constant.

But it hasn’t! Now somebody like MikeCA might say this has something to do with automobiles lasting much longer nowadays as compared to the mid 1980s. Well.. the increased quality and longevity of cars (especially Asian ones) definitely plays into the lower demand for new cars- but it, as best, can only explain part of the current situation. So what are the other factors I am alluding to? Well.. for starters, truck-chassis based SUVs and pickups increasingly became the main revenue generators for automobile manufacturers- especially american ones after the early 1990s. Then something odd happened after 2009.. old-style SUVs were very quickly supplanted by crossovers, pickup sales remained about constant and car sales after recovering for a few years between 2010-2015, entered a steep decline after 2016.

But what happened in rest of the world. Let us start by talking about countries in the European Union. Long story short, nothing similar occurred in the same time span. Sure.. sales were kinda low in the very early 2000s and between 2008-2012, and there has been a slight overall trend toward decline- but one that is linked to much larger demographic trends. But whichever way you look at it, the overall sales numbers were in same ball-park as USA (12-16 million/year) but there was no equivalent change in the types of vehicles sold. In other words, Europeans kept buying the type of cars they have been buying for decades. The same held for markets such as Japan, South Korea and other Asian countries except China.

China is an interesting case in that it has become the largest market for automobiles for the past decade. Yet, even in this still unsettled market, cars and a small to medium sized crossovers dominate the market. My point is that people in every large market for automobiles, other than USA (and Canada) are buying the same categories of the automobiles they have been buying for decades. So what is so different about USA that it is the only large market to have experienced an actual shift in the type of vehicles sold over past two decades? And what any of this have to do with late capitalism aka neoliberalism?

To understand what I am getting at, we have go back a couple of decades. See.. when I first came here a bit over two decades, I noticed many patterns. The one most relevant to this post concerns who bough new vehicles, which types and at what stage in their life. The brief version is as follows: buying a new car (frequently something from a compact hatchback to medium sedan) was almost like a ritual for most adults after they had got their first decent and somewhat stable job. so, while most people started with hand-me-downs or used cars, they would start buying new cars once they hit one of the supposed markers of “real” adulthood aka a decent job. I never saw anyone buying a new pickup unless their job required it.

While SUVs were a thing in the late 1990s, they were almost always bought by well-off people with kids who lived in McMansions and/or in certain expensive suburbs or exurbs. Almost nobody bought a new SUV as their first new automobile. It also helped that new compact to medium sized cars could be purchased for somewhere between 10-20k, and Japanese ones offered very good value for money. Even a few american ones were perfectly OK, as long you sold them off by the 6th year. My point is that new entry- to mid- level cars of decent to good quality were quite affordable- even for the median incomes of that era. According to most inflation calculators, 1k $ in 1999 is supposedly equal to about 1.5k $ in 2019. You will see why this matters soon.

Today the median car in those categories costs somewhere between 15k-30k, which sorta tracks inflation- but is a bit more than what it would have been in a perfect world. But what about incomes? Well.. as it turns out median and mean incomes adjusted for inflation have not really changed between 1999 and 2019- which is a fancy way of saying that a job that paid 30k/year in 1999 would pay 45k today. But there are two problems with this simplistic assumption. Firstly, many of the job which were available to a person in 1999 do not exist today. To make matters worse, people who had a decent stable job in 1999 no longer have a stable job that pays the same, even if they managed to stay in that field. The situation is even worse for new entrants who are stuck in an endless series of low-paying and unstable jobs unlike previous generations.

And it gets even worse. The real cost of living during the intervening two decades has increased far more than the 50% claimed by governmental agencies. Take rents for example. Rents today are somewhere between 2-3 times what they were in 1999, even if the apartment building has been standing there since the mid 1970s. The same is true for house prices. Note that the situation is far more dire in certain coastal metropolitan areas. Then there is the issue of rising costs in higher education. The student loan load of a person graduating from university in 1999 was a fraction of what it is 2019- and those have to be paid. We also cannot forget the insanely high costs of health insurance and high copays of most “healthcare” plans- once gain much higher than in 1999. Long story short, most people between 20-40 are broke or close to it.

And this is why the demand for new average-priced cars aka one of the signifiers of adulthood in USA have dropped so sharply. But what about the continued demand for new pickups and crossovers? Well.. guess who is buying them. Yes, it is almost exclusively Boomers and older Gen-Xers. These are the only two major groups who still have the financial capacity to buy new automobiles and like older people tend to, they buy large and bulky vehicles. Also, part of pickup truck demand is driven by people who have to actually use them for work in flyover country.

In summary the drop in demand for new (average) cars is driven by the same factors responsible for younger generation not having kids, marrying late or never, not buying houses, not eating out in expensive restaurants, not going on expensive vacations etc. They are fucking broke, overstretched, overworked and have no job security. The reason we do not see similar trends if change in automobile type preferences in Europe is that costs of living (housing etc) approximate income much better + healthcare is inexpensive and universal + higher education is inexpensive. The same is true of East-Asian countries such as Japan, South, Korea etc and yes, even China. But murican exceptionalism feels good, on the hole, doesn’t it..

What do you think? Comments?