Exchange-rate-guarantee fee

What the hell? I’m getting charged for Amazon to guarantee the exchange rate for the duration of an instant transaction? Sure, sure, that sounds good. Slather on the extra fees. Death by a thousand cuts.

A few days later, Baker published the short post Why Should Anyone Care About Paying Big Bucks for Vaccine Government Funded? by Dean Baker (Beat the Press), which put a finer point on the oligarchic and classist nature of the government funding of research for which it then grants private patents.

“[…] reporters don’t seem interested in asking questions like this when the beneficiaries of government handouts are rich people (generally white). They generally are far more concerned about a few hundred dollars that might improperly be paid out to someone on food stamps rather than the hundreds of billions that the government hands out every year with its patent and copyright monopolies. (Emphasis added.)”

These are just some notes I plucked from an interesting email conversation with a friend.

On the distribution of resources and where to invest:

I think it’s important to think about companies that provide value in the “essentials” area (bottom of the Maslow pyramid) and those that do so in the areas that clearly involve “disposable income”. While we have so many people incapable of fulfilling their most basic needs, how much resource expenditure should be tolerated/encouraged for such frivolity? Those that benefit initially convince themselves that such progress is utterly necessary in order to drive society forward for *everyone*, but that sounds very much like the underpinnings of trickle-down economics.

On the transition from brick and mortar to Internet:

I’m reminded of the article I read last year in that magazine you gave me, about the fracking boom in the States. Most of the companies listed there were values in the dozens of billions, if not more, and had dozens of thousands of employees.

That is one of the differences I see in the move to Internet value as well: these companies are valued in the billions but have hardly any employees (relatively speaking). That is, they are perfect vessels for funneling a tremendous amount of wealth to a handful of people. That’s great for those people. Not so good for all of those who are finding it harder to find jobs in an economy based more and more on this scale of company.

And, without jobs, where do people get the money to purchase Uber services? This is all kind of short term, to my way of thinking. It’s short-term gain for Uber, but they too will collapse because Uber’s very model helps create a world where there are no Uber customers anymore. There are solutions to this, but they are either not very classically capitalist or quite fascist.

On the valuation of GoDaddy at over $2 billion:

As for GoDaddy: this is one of those company whose 2.25b valuation is an utter mystery to anyone who still thinks that the company’s main service is to its supposed customers (the users). They are very good for funneling advertising and “trapping” customers. This is considered to be very valuable to those who are just interested in turning a profit and not interested in *how* that profit is turned. As long as there exists such a strong separation between ethics, *true* value and investment, we will have these dilemmas.

The stock corporation was truly both a blessing and a curse. It allows companies to grow more quickly (and to presumably provide more value to its customers), but it also allows companies that would otherwise go out of business to survive and thrive simply because they know how to turn a profit (if not actually provide a non-parasitic value). The world would be a better place without GoDaddy in it. As long as GoDaddy can figure out how to make money for its investors, we’re stuck with it. And, no, I’m not sure what to do about that either: is it good or bad? Dunno. I’m just thinking out loud.

I just saw the article RadioShack continues death march, loses $98.3 million in a quarter by Megan Geuss (Ars Technica) and it got me thinking again: where do you usually find Radio Shack stores in the US? In poorer neighborhoods, where they more often than not provided a convenient place to find replacement parts for electronic goods.

Did the need for Radio Shack’s goods disappear? Or is it just that it provides value to the wrong target market? With our overemphasis on valuation, are we not also picking winners and losers? Are we not preferring the opinions of the wealthy over those of the poor? If you can vote billions, you get your way. Once again, we circle back to the question of to whom is value being provided?

The article, Not My Financial Crisis – I’ve Got Literally Nothing to Lose by Alexander Zaitchik (AlterNet), makes the following point about those who have not really participated in the economic boom, who don’t really do much more than scrape by:

“Scraping by will likely become even harder in the days ahead for people in my income bracket. But it seems to me that a decade of scraping by is good practice for whatever’s coming. And it’s just a fact that this particular era of capitalism hasn’t been very good for those of us at the bottom of the wealth pyramid. If it takes some creative destruction to herald a new, more egalitarian, better regulated economy, then so be it. Millions of us are waiting for the reckoning with belts already tightened. They’ve been tightened for as long as we can remember. (emphasis added)”

It is easy to sympathize with the emphasized statement above; it’s probably true. But, it also indicates that the author isn’t at the bottom of the heap or isn’t aware of the ramifications of a true restructuring of the economy. When economists claim that the system can be saved, they mean that it will be put back the way it was; they don’t mean systemic change, which would benefit the unwashed masses, but not before it starved half of them to death.

Moral-Philosophic Implications for Socialism in One Sector of a Visit from the Bernoulli Fairy by Brad DeLong (Grasping Reality) has some back-of-the-envelope numbers supporting the idea stated above that “[t]he only reason many schemes tend to succeed instead of fail is that people, in general, pay off their debts and work very hard.”. He comes to the conclusion that, when you invest in the market, “you are accepting assets that promise an average return of $125,000, and yet the market is silling to sell them to you for only $55,000”. Unless, of course, you make this investment right before everything goes in the dumper.