Archive for December, 2011

My Kingdom for a Capitalist!

Friday, December 30th, 2011

Will somebody please tell me where all the capitalists have gone? But don’t be so quick to answer. You probably want to say something like: “Just turn on CNBC and you can see Larry Kudlow shouting about capitalism every day.” But I believe that Kudlow and his ilk are something entirely different.

Consider this quote from Harvard historian Niall Ferguson’s book “Civilization: The West and the Rest” (Kindle Location 4269):

“Capitalists understood what Marx missed: that workers were also consumers. It therefore made no sense to try to grind their wages down to subsistence levels. On the contrary, as the case of the United States was making increasingly clear, there was no bigger potential market for most capitalist enterprises than their own employees.”

In 1914, Henry Ford doubled the wages of his workers. That’s the kind of capitalism that defeated Marxism.

But today? All I see are “capitalists” doing the exact opposite: replacing $23 per hour American workers with $2 per hour Asian or Mexican workers by offshoring factories and offices, and importing millions of immigrants.

I submit to you that those are not capitalists at all. People like Larry Kudlow are really globalists and plutocrats. And we are witnessing the historical transformation of the USA from a capitalist nation into a South American-style plutocracy.

Perhaps you think that I am exaggerating? Well, consider this quote from geopolitical expert George Friedman’s book “The Next 100 Years” (page 120):

“In the 1920s, the world was in the midst of an accelerating population explosion. … The United States, facing an onslaught of potential immigrants, decided to limit their entry in order to keep the price of labor – wages – from plunging.”

Back then, both our business leaders and political leaders made sure that workers were well-paid. The result was the rise of the mighty American middle class. And those middle-class workers did indeed spend their wages, creating in the process a vast consumer market that became the economic engine of the world.

And today, not only do our business leaders seek to “grind down wages”, but our political leaders make it easy via record immigration and free-trade treaties with low-wage nations.

Whether or not the USA has a middle class at all is a political decision. And currently the decision is: no. It has been decided that the middle class will be feed through a wood-chipper that spits out vast profits for multinational corporations via global labor arbitrage and mass immigration.

Capitalist America, R.I.P.

Top Investing Websites

Monday, December 26th, 2011

Below is a screenshot from my new Rank-O-Matic app showing the top investing websites by Alexa Rank (click to enlarge):

As you can see, Bloomberg is at the top of the list, which isn’t too surprising. But I was surprised to see Business Insider out-ranking CNBC.

If you look in the “Change” column of the top five websites, you will see all zeros. That’s because ranks change less frequently as you move up the hierarchy. And the big moves for sites lower down on the list aren’t terribly significant.

I don’t claim these standings are comprehensive. In fact, as I looked for investing websites, I just kept finding more and more. For all I know this isn’t even half of them. If you know of any that I missed, please post a comment and I will include them in the next update.

If you are eager for daily updates, download Rank-O-Matic, and run it each day. The app can be used to track any number of websites, which you can group into categories. If you are new to Alexa, read my page: “Alexa Rank“.

And if you want to boost your rank and traffic, SEOmoz.org is the best in the business.

Civil War Rages Across Internet Over SOPA

Sunday, December 25th, 2011

SOPA is a bill in Congress designed to stop online piracy. However, its opponents consider it to be written far too broadly, and companies that support SOPA have been slapped with boycotts. The highest-profile casualty so far is Go Daddy. The registrar initially supported SOPA, but then got hit with a wave of websites (including Wikipedia) transferring their domains to other registrars. Go Daddy caved-in and now opposes SOPA.

Some critics think that the bill will overturn the “safe harbor” clause of the Digital Millennium Copyright Act of 1998. And that by itself could wreck the internet as we know it. Joel Spolsky of Stack Overflow discussed this in a recent podcast (starting at 27:55). As an example, he used a case where somebody posted a programming question on Stack Overflow. It turned out that the question was from a commercial product – a test that employers use to interview programmers, and was protected by copyright.

Under current law, Stack Overflow could not be held liable for that copyright violation, as long as they took the question down after being notified by the copyright owner. That’s the “safe harbor”. Under SOPA, they might be liable, and even have their website blocked – without due process.

Will websites that feature “user generated content” (including blogs that allow comments) be able to operate under SOPA? Maybe not. So, SOPA is also considered a threat to free speech, which explains the ferocity of the civil war that erupted last week.

Public companies that support SOPA might be of interest to short sellers since boycotts might result in negative earnings surprises. I’m thinking that companies frequented by techies might be hardest hit.

Read up on SOPA at Wikipedia.

Michelle Cuckoo-Cabeza

Friday, December 23rd, 2011

A few years ago, while watching CNBC, I almost fell out of my chair when one of the anchors said something like:

“Yes, Hugo Chavez is a dictator, but there is a serious income-inequality problem in Venezuela.”

A CNBC anchor criticizing plutocracy! Bizarre, right? Well, that was Michelle Caruso-Cabrera.

However, in 2011, “MCC” was sent to Europe to report on the financial panic. From Rome, she reported on the scourge of overpaid Roman cab drivers. In another report, she carried on about how the only solution for countries like Italy was to smash unions and beat down wages.

Quite a change of philosophy, right? I then went to Amazon and did “search inside” on her book for “Venezuela”. Not a word about income inequality.

So, what happened to MCC? I like to think that she got a memo from her boss, the “Jobs Czar” saying something like this:

“One more criticism of plutocracy and you will be reporting from Mongolia! Even if it is in an enemy country like Venezuela, plutocracy is plutocracy, damn it! And your job is to pimp plutocracy! Now hop to it!”

Of course, you can’t blame MCC for joining Team Plutocracy. After all, according to Wikipedia, income-inequality is even worse in the USA than it is in Venezuela. And one simply cannot expect to have a career in corporate America while being an advocate for the small people.

And what about those Roman cab drivers? Did they really bankrupt Italy? I don’t know, but last time I checked, labor unions have been around since the beginning of the industrial revolution, and Italy has done just fine for most of its history. If the unions were choking Italy, how come Italy has a $2 trillion economy? The 8th largest in the world?

But yes, unions can be a problem. Imagine a Midwestern town in the USA that had all of its factories sent to Mexico and China, and its service centers to India. It has double-digit unemployment, tax revenues are down, and the city can no longer afford to pay “exorbitant” wages to its union workers.

That is indeed a problem. But maybe it’s more a problem of globalism, no?

And why may I ask is the solution to any economic problem to beat down wages? Why isn’t the solution to raise the wages of German and Chinese workers instead?

Speaking of which, in CNBC’s coverage of Italy’s problems, I didn’t hear one word about how cheap imports from China have ravaged Italy’s industrial economy. Now that I think about it, I don’t recall hearing that mentioned at all in our corporate-owned media. We have to go to the British media to learn the term “wage dumping”. Here is the great AEP on the subject:

“Oskar Lafontaine, a leader of Germany’s Linke (Left) party, said the euro was hurtling towards destruction on current policies. He blamed Germany’s system of screwing down wages to undercut other EMU countries – or “wage dumping” – for causing the imbalances behind the eurozone crisis. “A shared currency cannot work without coordination of wage policy. Once wages have diverged as far as they have in recent years, devaluation and revaluation is the only way out.”

And Italy’s problems are not so much different than our own. After all, the difference between Germany’s and Italy’s wages are miniscule compared to those of the USA ($23 per hour) and Mexico, India, and China ($2 per hour). And thanks to the Beijing-imposed yuan-dollar currency peg, we also have a “shared currency” with China, just as Italy does with Germany.

Of course, such “labor arbitrage” is the very Engine of Plutocracy. So, don’t hold your breath waiting for it to be discussed on CNBC. And if the USA is ever graced with a populist dictator like Hugo Chavez, the Plutocracy will have only itself to blame.

Note to Plutocracy: Seriously; ease up a bit. You are riding for a fall. Check yourself before you wreck yourself.

Note: Here is a post I wrote about MCC’s assertion that “factory jobs are dumb.”

Civilization Ends in Alabama

Monday, December 19th, 2011

If you are intending to retire on Social Security, make sure that you are mentally prepared to live without running water and indoor plumbing.

Because that’s what’s happening right now in Jefferson County, Alabama.

Now, if you are Larry Kudlow, you are probably shouting:

“Aha! If Social Security had been privatized those poor people could have put their funds in a program run by reputable, private-sector firms like JP Morgan and making a much higher return right now!”

But according to the BBC story, JP Morgan helped to cause the problem:

“Investment bank JP Morgan Securities and two of its former directors have been fined for offering bribes to Jefferson County workers and politicians to win business financing the sewer upgrade.”

Water-and-sewer bills can be as high as $300 a month in Jefferson County, and some people have resorted to outhouses and bottled water. If your social-security check is only $600 a month, then you don’t really have much of a choice.

Maybe you think that I’m exaggerating about civilization ending. But consider this quote from Niall Ferguson’s book Civilization:

“My idea of civilization is as much about sewage pipes as flying buttresses, if not more so, because without efficient public plumbing cities are death-traps, turning rivers and wells into havens for the bacterium Vibrio cholerae.”

Half the population of Birmingham fled a cholera outbreak in 1873. Will we degrade to that level? Maye not, but having people install port-a-potties in their back yards is clearly a step in the wrong direction.