Labor Day = Yeah

Sep 7th

When you think of labor day what comes to mind? For me it is these 2 thoughts

  • lower earnings because few people are online today
  • since almost nobody is online, any hours worked today are me getting ahead of the market ;)

Working hard & working long hours can almost be a disease...the web makes it easy to be addicted.

But for every person who is putting in hard work trying to help people there is another person selling image.

The big issue with the image game is the risks. As the lies pile up they corner people into a bad situation, to where they can (and do) lose everything.

If I had to take a single point of reference to help a stranger judge the difference between a hack and someone who wants to honestly help people, I would say it is this: do they encourage you to take on debt.

  • If they do then there is a good chance they are the type of person who will go out of their way to screw you.
  • If they do not then they are likely not a maximizer type (because if they were then they would be encouraging you to go into debt to sell you more stuff).

It is not that all debt is evil (when I got started online I was naive enough to start on a credit card), but life and markets are unpredictable. If I wasn't smart enough to get a job to cover my 6 or so months of education before going full time online who knows where I would now be. What seems like a short term gain can lead to longterm failure. We are human, and so we are flawed. Wen you have debt/leverage you have no spare parts. So if something goes wrong you are done. Nassim Taleb spoke about the importance of savings and diversity of revenues as keys to survival, while noting that the very structure of our public markets encourages risk + leverage (options encourage short term performance & volatility rather than sustained growth, and you hope the guy on the next watch is stuck holding the Madoff ponzi bag).

The falls of past empires have typically been preceded by rapid inflation in food costs. Our food supply, like most other aspects of modern day life, has been so extended as to be poisonous. Fishes soaked in chemicals literally change sex back and forth, and shrimp in the ocean (with traces of Prozac) swim toward the light - where they get ate.

Its not about fixing the conversation. Its about filling in the blanks. If people are prone to click on something that is exactly what they will get, even if it is not something they want.

We misinform kids about sex in a way that can screw up the rest of their lives. Against the will of people data is collected so that they may be stalked and harassed. If you once thought you were fat in the past, long after becoming anorexic there will still be ads reminding you how fat you are, following you around the web.

When bits of culture die the life lessons wrapped in it fade as well. Sure there may be HTML codes for emotions, but (beyond ad targeting) it is hard to reduce people to number.

Is the push toward homoginization to increase yield and chasing the lowest common denominator making people happier or more miserable?

I realize that reading the above can quickly make me sound like some ultra left-winged hippie, but the point of this post is not a political one ... rather one on the basic rule of law.

We justify (or downplay) harming ourselves, our environments, and the environments of other animals so we can have more and better. But to do this we often take on debt and leverage and put ourselves in precarious situations. Worse yet, we often have *others* decide to take on leverage for us, without our desire or permission.

Why is it that the government is giving Google tax credits to build more low income housing while the Federal Reserve is sitting on over $1 trillion in bad mortgage paper? How can the government want to make housing cheaper / more affordable while simultaneously propping up (and thus ensuring overvaluation of) virtually the whole of the market? How can the government taking both sides of the same bet lead to anything but waste, fraud & abuse?

If you believe in efficient market theory then banking should represent a small portion of the profit pool (since banks are all dealing in the same commodity of cash). And yet the banking class keeps representing a growing portion of the profits, while the bad sides of their trades (the losses) are passed on to tax payers.

I don't mind someone else levering up with risk so long as they have to pay the consequences of their failures. But capitalism without failure is like religion without sin.

These banks threatened tanks in the street if they didn't get their bailouts.

They went so far as to say even auditing the Federal Reserve would threaten the financial system. Sorry, um, but that is exactly what the banking class did. If they are not punished for committing crimes then the lawlessness will only grow more extreme, as it has.

When the bubble popped some of these scammers, charlatans, shysters, swindlers, and tricksters claimed that "nobody saw it coming," but in fact as things started to go wrong these folks leaned into it and made it worse.

Rather than having CDOs go unsold they engaged in self-dealing & kept mixing the bad chunks in, sorta like making new sausage out of old sausage. They knew what they were doing. They intended to commit fraud:

"On paper, the risky stuff was gone, held by new independent CDOs. In reality, however, the banks were buying their own otherwise unsellable assets."
...
"One rival investment banker says Merrill treated CDO managers the way Henry Ford treated his Model T customers: You can have any color you want, as long as it's black."

Its labor day. The criminal bankers who ripped you off in the past, who are currently ripping you off with more crimes, and who will rip your children off are stealing your labor. And since neither political party cares to stop it its up to you how much you want to give...there is no end to how much they would love to take. Time for me to take a break. ;)

Published: September 7, 2010

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Comments

September 7, 2010 - 8:09am

Amen to that Mr Wall, as usual you are talking solid sense with a righteous, controlled anger, whether it's the economics of the world or the economics of Google.

I suspect some of your compatriots will decry you as some kind of communist (or socialist, apparently most Americans don't understand the difference), but over this side of the pond we're with you. :)

September 7, 2010 - 3:35pm

I tip my hat to you. This is by far your best post even tho it has nothing to do with SEO. Good work Aaron. I love it when bloggers go out of their niche to point out aspects that matter to everyone of us.

September 7, 2010 - 8:18pm

I told a number of my college friends not to forget:
100 years ago the fight was on and your (great)grandparents won a 40 hour work week, social security, and cheap college for you.
You should honor those who paved the way for you (fought and died for a life with dignity). That is what Labor Day is about, chief.

September 7, 2010 - 11:15pm

You are correct.

And how you honor them is by continuing their fight, by *not* allowing criminal elements in government & the banking class to use financial fraud to strip away all that was fought for.

Worth mentioning that a large group of people work over 40 hours while other large groups are unemployed, and many colleges are not cheap by any stretch of the imagination. They may at first *seem* cheap because the loans are easy to get, but the ease of getting the loans is directly correlated with the extreme cost.

In terms of the looting the bankers did, such criminals can only behave like they do with an ignorant populous ... so spreading the gospel and increasing resentment is the only real solution to the brazen looting and lawlessness that is core to country.

To quote someone far smarter than I am:

"Mass murders occur, which is what war is," Zinn, who was a bombardier in World War II, said in 1972, according to the file, "because people are split and don’t think … when the government does not serve the people, then it doesn't deserve to be obeyed. … To be patriotic, you may have to be against your government."

September 8, 2010 - 1:21am

If you haven't read it yet, you should read Upton Sinclair's The Jungle. You'd really like it.

September 8, 2010 - 4:01am

I should read that sometime soon :)

September 13, 2010 - 5:45am

The recession is the cause of many Americans finding money wherever t hey can get it. ”Jobs Americans won’t do” are being filled right now also. This comes from the Wall Street Journal.

Here is the proof: More American workers turning to day labor during recessionDay labor, once considered to be the almost-exclusive domain of undocumented workers, is now on the rise among former white-collar employees, male and female. You will find a lot more reports of non-Latino day individuals that are waiting on the street to get jobs.

September 13, 2010 - 8:25am

What caused the recession? Excessive leverage, credit risk pollution, and financial engineering fraud by the banksters.

September 20, 2010 - 6:24pm

I think it's funny how you grabbed a political clip that is over 2 years old (so it would lean to the left) when you could have grabbed a recent video where the dems are doing the very same thing (fear tactics) to pass healthcare and trillion dollar stimulus bills.

$111 million creates 55 jobs.
http://www.examiner.com/city-hall-in-los-angeles/city-of-la-stimulus-fun...

September 20, 2010 - 9:21pm

I think it's *petty* that you care if the examples used lean toward your own political affiliations.

That point is IRRELEVANT!

On your health care topic I could also point out how Bush signed that Medicare Part D in 2003, but THAT POINT IS IRRELEVANT.

Sure your brain has a reptilian piece to it, put the point of this post is to look a bit deeper than that. Look beyond the black and white political knucklehead garbage that the media sells.

BOTH political parties represent special interest (in terms of banking, finance, and health insurance) over the will of the people...and they do so with criminal intent.

When republicans ruled the criminals got their way at the expense of the middle class. Now that democrats are in power the criminals get their way at the expense of the middle class.

Until there is campaign finance reform or a bankruptcy of the country there is little hope for meaningful change.

Political ideology doesn't change that FACT.

September 20, 2011 - 1:56am

I have to say that video of everything is amazing and nobody is happy is just awesome. Classic stuff there.

When you say that people who are "hacks" are people who encourage you to get into debt, I'm assuming they want you to get into debt buying their products right? There is a kind of debt that is good. Buy assets using credit is one of the smartest ways to use debt to your favor. That's how rich guys get all the money.

I use my credit card to buy physical gold for example. Now using my cc to buy the latest info product or a car I can't afford is different altogether.

Anyway interesting article.

- Vince Delmonte

September 20, 2011 - 2:15am

...and the good debt vs bad debt meme is often bogus.

Using debt to buy internet stocks was a great idea because the web was revolutionizing the real world. Using debt to buy a house was a great idea because real estate always goes up. Right now education is allegedly a good debt (so long as you don't look at the student loan default rates & how hard it is to get rid of student loan debt).

Buying gold is all about hedging a risk of a disorderly monetary event and/or currency being repriced against gold at a much higher price (as has already happened in the past). But when will that happen? Who knows. The markets can stay irrational far longer than you can stay solvent. I wouldn't dare pay interest on debt to buy gold unless I knew I was already about to go under & was the type of person to max out their credit card before doing so. (Though that isn't my style.)

Sure a lot of business deals are done while being fueled with debt leverage, but the reason for that is the buyer only wants to risk a smaller % of their personal wealth & to get an amplified return off the small amount they put up. If the deal goes south the creditors eat the bulk of the losses (along with the pension plans of the companies) as the Sam Zell styled guru keeps most of his money and says "oops." The same is true for stock options that encourage excessive volatility because short of getting fired there is little downside risk to executives, while the sky is the limit on the upside.

Some of the ultra-wealthy may use leverage instruments for investment, but they won't do so paying credit card level interest rates. A large reason they do borrow is because they get dirt cheap rates borrowing against their savings that is stocked away in a tax-free carried interest account to benefit from compound growth before being taxed. But the ultra-rich certainly generally are not out buying gold on credit cards...the ultra wealthy are the ones who own that interest bearing debt. ;)

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