Sustainability

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." - Frederic Bastiat

Business Ethics vs Sustainability

The concept of business ethics is usually a self-serving approach to marketing.

Some people would rather make money dishonestly than honestly, getting satisfaction out of screwing people over (hi Andy), but gray is a broad spectrum. To focus on "ethics" is to allow relative justifications & miss the broader issues.

Likewise, additional layers of complexity promoting more rules & incentives over wisdom ultimately destroys the skills and will to develop legitimate leadership.

Rather than adding additional layers of complexity, what we should ask is:

"Is what we are doing sustainable, or is it not?"

That which can not be sustained won't.

Eradicating Poverty Opportunity

As the world has grown richer poverty should eventually disappear, however it isn't. The public claims from the US of supporting & spreading democracy are inconsistent with blocking the ability of a Hatian to earn a livable wage. "The Obama administration pressured Haiti not to raise its minimum wage to 61 cents an hour."

How is THAT for left-leaning altruistic behavior?

While funding a large imperial army that blows trillions of Dollars on fraudulent wars (and jails those who tell the truth) the government also helps bankers grift a large % of GDP through outright malicious fraud (which is never prosecuted). To embed that much corruption into the core of a political system you can only really have "democracy" over here so long as you fund exploitation elsewhere.

However, even that system of imperialism seems to be falling apart as Dollar depreciation not only caused the overthrow of many middle east governments, but inequality is also sharply rising in the US. The "recovery" happened for the investor class as we collectively as a society throw more people under the bus daily:

The structural problems is that way to much of our productivity (and all our increased productivity in the past 3 decades) is going to the investor class. Any solution to our structural problems must, therefore, contain an element of redistributing wealth from rich to poor and middle class people.

Wearing Political Blinders?

One thing I like about SEO is it forces you to view systems & attempt to understand ecosystems. If you don't learn many valuable lessons about society the online market is so competitive that it can & will wipe you out.

Some market purists might cringe at the word "redistribution" but ultimately covering the losses of the banking class was exactly that. Except it worked counter to the free-market ideology those same bankers preach to everyone else.

I have been called right leaning & I have been called left leaning. But I see both "labels" as missing the broader point of what happens in reality. When a right wing president was in charge the bankers were allowed to commit endless crime without punishment. Based on disgust toward that fraud a left wing president was elected on the promise of hope & change. He then proceeded to screw the general public while fellatiating the banking class. He is a sell out.

Money > Human Life

One thing I question the legitimacy of is why capital gains are taxed at a lower rate than normal wages. Is a person's blood, sweat & tears worth less than compounding interest on money? There is some theory that the capital markets are more efficient if they are taxed lower & that makes the rest of society more efficient, but that theory fell flat on its face when the US government shoveled trillions of Dollars into the banks & none of the bankers went to jail (even though some of them have stated before congress that they knew 80% of their "product" was defective).

Go Long Fraud, The Government Is!

AIG was nearly bankrupted from insuring mortgage-backed securities that were misrepresented (which was, of course, yet again, fraud & thus illegal). AIG, facing bankruptcy, was not allowed access to a taxpayer-funded bailout unless it waived its rights to sue the banking criminals which destroyed their company. What dirtbag in government decided that AIG (and taxpayers) should have their rights waved so that they can funnel money into criminal banking enterprises? Does it matter that many government "regulators" were former employees of AIG's counterparties?

If a certain class of individual is inherently destabilizing, then why (other than fraud) do we keep "doubling down" on hoping that group of people will eventually change their approach (even as we shield them from the negative consequences of their own actions by making everyone else foot the bill)?

We block them off from the market feedback mechanisms we pride ourselves on pushing on everyone else. Yet if their failure causes anyone else to fail we claim that it was a combination of "free market forces" and an individuals lack of performance that is to blame for their own plight.

Sure some industries get disrupted, but when one industry goes down another rises up. Not with the banking fraud though, it is just an across-the-board kick in the nuts to almost every non-banker at the exact same time. Since our monetary system is a debt-based system, one person's savings is backed by another person's debt, thus most people are *required* to live pretty close to paycheck to paycheck. Yet it is considered totally reasonable for the Federal Reserve to destroy their store of wealth AND their ability to earn at the exact same time:

Deflation and outsourced jobs is creating a loss of purchasing power at the bottom and middle income strata. Housing wealth destruction and job stability are exacerbating this.

MEANWHILE in monetary land….inflation is being injected into the system by the Fed who lend money to rich people who then buy commodities, driving up prices, who buy bonds which lower savings rates and borrowing costs, and stocks which drives down dividend yields and increases cap gains.

That hand is *anything* but invisible. Adam Smith wouldn't call that a "free" market & anyone who does is one or more of the following

  • ignorant
  • a liar

Since those who lost trillions of Dollars through intentional malicious fraud can't accept the "free market" forces that they suggest everyone else should be subject to, the only solution is "more debt, please."

The same banking criminals who caused the mess are paid interest to loan the government its own money, so that the banks may "earn" their way out of the bankruptcies they earned through their fraudulent activities.

2 Groups of Citizens, 2 Books of Law

Some bankers were caught bid-rigging to rip off the government. Those who they committed bribery with are now in jail. The bankers once again have nobody in jail, even though they were engaged in the exact same crimes!

Those same bankers got a slap on the wrist for laundering hundreds of billions of Dollars in drug money & then commit perjury before the courts by manufacturing robosigned documents to replace the ones they had to destroy to hide their mortgage fraud.

If we are intellectually honest, how is it that a person can go to jail for using a fairly soft drug like weed when the people who push hundreds of billions of Dollars of drug money (tied to much harder drugs & global violence) go unpunished?

But the drug money isn't enough.

Now they are trying to figure out how to steal social security funds that already withdrawn from you check into the abyss. The nationwide decline and austerity are already so obvious that the Oakland police publicly issued criminals a laundry list of crimes that they won't even bother responding to:

  • burglary
  • theft
  • embezzlement
  • grand theft
  • identity theft
  • required to register as sex or arson offender
  • dump waste or offensive matter
  • pass fictitious check
  • stolen license plate
  • extortion
  • vandalism
  • etc etc etc

If Markets Are Efficient...

There is no commodity in the world that is as commoditized as money is. Most of it doesn't even require actual printing, but is just digits on a computer screen...much like the digits I am typing right now. And yet the banking criminals have captured so much of governance that it is not uncommon to see them take 30% of corporate profits (and then shift the subsequent mirroring losses onto the public at large).

To claim that those huge profit margins (during fraud-driven bubbles) are reasonable AND that they deserved to be bailed out whenever they get things wrong is intellectually dishonest. If the taxpayer is capturing 100% of the downside risk, then why (other than fraud) are these banking criminals paid a single cent more than a person enlisted in the military?

Global Instability

Internationally we are at least as screwed up as we are domestically. Does outsourcing make the world more efficient? In many cases absolutely. But the global imbalances create unsustainable current account issues.

Can look to technology to solve the problems?

Maybe not!

Even The White Horses Have Bloody Hooves

Apple is one of the most profitable companies in the world. At the other end of that supply chain is a factory where harsh chemicals give employees nerve damage & people keep committing suicide. And as soon as those people get any aspirations at all, suddenly even the 3rd world slave wage labor is too expensive & over the next few years a million people working for Foxconn will lose their jobs to robots.

If even slave wage labor isn't competitive with robots then what does that mean for labor in countries with a higher standard of living, where the labor is far more expensive?

Eric Schmidt famously stated that laws are written by lobbyists & then Google quickly hired a dozen lobbying firms while significantly increasing their political donations. The lobbyist comment was a sneer at the system, until Google followed suit and started buying the political process. They make the same claims toward patents, yet they are investing billions of Dollars there as well.

Where Legitimate Innovation Comes From

Historically most valuable economic innovation (the legitimate kind, not the fraudulent financial engineering of the past decade) comes from individuals & smaller groups who challenge existing industries & powerful companies with creative destruction by making markets more efficient. The AT&T monopoly did a lot of great research, but anything that they thought could cannibalize their current business model did not see the light of day - sometimes for decades.

If we are moving into an ideas & technology driven economy (and that is where most of our growth will come from) then diversity should be cherished & encouraged. Unfortunately, the software patent wars lead to smaller developers being driven out of the ecosystem & innovation is slowed while the 800 pound gorillas & patent trolls engage in an arms race.

These sorts of "legislate away the future" that aim to keep existing powers at the top of the food chain are literally everywhere - from the food supply right on through to a proposed law that would harm the ability for whistleblowers to even highlight the pervasive epidemic corruption.

And Now On the Auction Block...

"US congressional parties now post prices for key slots in the lawmaking process."

The system of fraud is so unsustainable that the US got a credit downgrade. The criminal mortgage probes are fizzling out, but Fannie Mae needs more money! Those responsible for the downgrade (who committed fraud & then sold their junk to the government at above market values) are warning the US about the risk of it losing its worldwide reserve currency status. To make the bankers whole, everyone else must lose, at least up until that no longer works.

Exponential Growth in a Finite World?

We have a debt-based monetary system which requires exponential growth to prevent collapse, an oligarchy-based political system that punishes innovation & success while rewarding failure, and it exists in a finite world where we are reaching the peak production in key base-level economic inputs: like energy.

The same criminal banking organizations that forced you to eat their debts are now hoarding the physical commodities you need to live. And yet, our worldwide finance-first economy (where we put derivatives & abstractions before reality) is so dysfunctional that even the banks are engaging in massive layoffs.

The parasite ate the host & now the host has nothing left to give.

Manipulation vs Fixing The Problems

It is thus without surprise then that the government invests in manipulating the perception of reality (rather than fixing actual problems) and society has an issue with mass psychosis.

That which can not be sustained won't.

Dylan Ratigan's Mad as Hell on msnbc

Published: August 10, 2011 by Aaron Wall in

Comments

Vaselinessa
August 10, 2011 - 3:22pm

I don't mean to antagonize, but I have such a different grasp of economics that I feel I need to speak up, not to argue with Aaron but to give the readers an alert that The first few headings in this article are misrepresentative.

Unfortunately, the better part of the misrepresentation occurs because the most salient points of the matter are quick to share but offer a skewed view of what's going on and why (e.g. Obama administration urged against raising Haiti's minimum wage... therefore the Obama administration's action was destructive? not so). (Another big one is that the recovery is going to the investor class; true that the banking system was held intact, complete with most of its undeserving, unqualified execs, but the class of investors outside the industry lost huge and recovered little; what's more, I've seen with my own eyes gov't recovery efforts aimed directly at the working class.)

I can point out one obvious error, however, which indicates that Aaron doesn't have the grasp on economics and events that a reader might expect: "AIG was nearly bankrupted from insuring mortgage-backed securities that were misrepresented (which was, of course, yet again, fraud & thus illegal)."

Whatever he intended to convey, the implication in these words is that AIG was guilty of fraud. It's the other way around. The people taking out mortgages were the ones guilty of fraud (and contrary to the attitude of the article at large, it was chiefly lower-class and lower-middle-class house flippers).

August 10, 2011 - 3:44pm

And so do the actual facts!

I think you were trying to draw incorrect information out of context just so you could disagree with it.

For example, here:

Whatever he intended to convey, the implication in these words is that AIG was guilty of fraud.

No I wasn't suggesting that AIG was guilty of fraud. Rather that the bankers who had them insure used dogfood that was misrepresented were committing fraud.

The people taking out mortgages were the ones guilty of fraud

This *could* be true if there was a few percent of mortgages that went bad. However, when defective mortgages are 80% of production it indicates accounting control fraud within the bank. You could spend a couple hours listening to Bill Black interviews & speeches about accounting control fraud. There is no (legitimate) point in blaming the victims!

Further, if a bank is SO BAD at their job that they got took for a ride 4 out of 5 times they would deserve to be bankrupt...what business owner makes destructive decisions 80% of the time while still remaining in business?

I mean...how flagrant are the bank's intentions of fraud when they actually had a product called "liar's loans."

The "chiefly lower-class and lower-middle-class" angle is hard right-wing ideology to blame the crimes of the bankers on minorities. It is a form of racism marketed toward the poor & uneducated whites who want to be able to blame some of their own condition on another race (while being reminded that they are better than "those" people). Listen to Bob Dylan's Only a pawn in their game.

However, if you look at the *actual data* in terms of foreclosures you would see that it skews in the opposite direction: middle class to upper middle class. And what is remarkable about that is during a rise of unemployment the lower class takes it harder, so for them to be under-represented in the aggregate data of foreclosures means that the skew toward middle & upper-middle was even more extreme than the foreclosure data shows.

I am always disappointed by how ignorant society is...but if nobody mentions what is going on the ignorance lingers & people go around spreading garbage political ideology over truth. Sad, really.

Kris Day
August 10, 2011 - 5:51pm

We are drowning in a cesspool of corruption, no doubt about it. The answer: The 12 Tyrants. One can bicker over the details, but the tend is clear. Over the last 20 years there has been a massive exodus of good jobs and an equally massive redistribution of wealth. Nothing good will come of this. I wonder why there have not been riots here. I more highly medicated population maybe? Who knows.
As far as left and right, two puppets, one puppet master. I thought everyone knew that.

August 10, 2011 - 7:57pm

over-medication, massive deficits, welfare programs, easy student loan access, cheap subsidized food

Of course, at some point the gravy train ends...some are well aware of that...which is why CHF/USD is up something like 10% in a month & Gold is up like 15% in a month. Those moves would be considered strong YEARLY moves...but have happened in the past month. Worse yet, those moves are not off of lows on a rebound rally, but are the intensified continuation of a long-term trend. (a couple years ago the Swiss Franc was like $0.80 & it recently hit an intra-day high of over $1.40...and Gold is up from a under $300/oz to an intra-day high over $1800/oz today).

mattmorr
August 11, 2011 - 1:29pm

for the Bastiat quote. One of the most under-appreciated economists and political theorists of all time. I can't think of a single human being that wouldn't benefit from reading The Law and That Which is Seen, and That Which is Not Seen (both free online). I also really loved the subtle Schumpeter reference in the 'legitimate innovation' section.

GeorgeRaffter
August 11, 2011 - 2:24pm

Interesting to see that the clowns that got us into this mess and are still running the banks and the other financial institutions that were trading securities as dept and fraudulently insuring their risk are still at it and more.

JP Morgan is allegedly about to do an Enron.

http://rt.com/programs/keiser-report/keiser-debt-deal-gold/

14 mins in.

bweiss
August 11, 2011 - 2:33pm

The corruption is so blatant it's embarrassing for everyone...

dazzlindonna
August 11, 2011 - 4:10pm

I'm economics clueless, so let's get that out of the way first. But what is obvious to even me is that the entire system is corrupt and useless. What I don't know is how to fix it, and I was hoping you would have some suggestions in this post, but you don't. That disappointed me, because this is the second time today I've read a post that lambasted something, without providing possible solutions to the problem. (The first post involved scaring people regarding website security, while saying only that everyone should be more secure. The "how" was missing). I'm ready to protest. I'm ready to demand better. The problem is: I don't know what I should demand. I don't know what would work. In my experience, power corrupts, so even removing everyone from power, and replacing them would only be waiting for the time when the power of the replacements corrupts them as well. I think America isn't protesting en masse, or revolting, because we don't know what would work better. Call me stupid, but I just don't know.

August 11, 2011 - 6:33pm

what is obvious to even me is that the entire system is corrupt and useless. What I don't know is how to fix it, and I was hoping you would have some suggestions in this post, but you don't. That disappointed me, because this is the second time today I've read a post that lambasted something, without providing possible solutions to the problem.

The core issue is the corruption. We believe in "creative destruction" and ~ 10% of all US companies go under every single year. If we are willing to accept that as a driver of innovation (which I think is a great idea & has generally worked well) then we need to accept that everywhere. But when there is a core group of oligarchs who are above the law & not allowed to fail then we as a country are effectively against the free market ideas well allegedly espouse.

How does the problem get fixed? I don't know all the answers, but these are some of the potential ones:

  • one of the first steps with getting rid of corruption is identifying it. one of the next steps is spreading the word. if the message spreads far enough then eventually something has to happen.
  • individually, we can avoid taking on any personal debt + have multiple streams of income + savings. further if you have a savings or checking account at any of the large banks that caused this mess then pull your money out of that account & put it in a less corrupted smaller local bank.
  • at the government level, we can push for campaign finance reform & we need to push for justice to be done against the oligarchs. some of the bankers who were guilty of fraud who caused billions of Dollars of damage should go to jail (or, at a minimum, appear before the court so people can decide what is the appropriate punishment) & some of their companies should fold (rather than being bailed out at the expense of everyone else).
  • we can also push for a smaller government with a smaller military. I would love to see Donald Rumsfeld investigated over the bogus war in Iraq. If our own leaders who lie about military stuff were treated the same way we treat the people we go after then I suspect the fraudulent war business would seize up overnight. Note that by "smaller" government I am not saying we should have "no marketplace regulation" but rather things like this...we should decide if we should encourage the use of debt leverage to prop up asset values (does a mortgage interest tax deduction actually make any sense? no it does not, as it is a subsidy that flows to banks by increasing the price of real estate...it doesn't make housing any cheaper, it is just a market legislating their own profits).
  • require transparency in markets: all derivatives should be traded on an exchange. assets should be held at their actual value. currently accounting fraud has been legally approved for the large banks & allows them to hold assets on their books at an above-market valuation
  • don't require almost all money to come into the marketplace as debt (as the exponential growth of interest eventually eats away at gains of productivity & quality of life)
  • almost all the above suggestions come down to this: "the economic systems & justice system we believe in for individuals should apply to everyone across the board" & if people do not feel that they do then eventually things will get worse and worse when people doubt the legitimacy of governance: which they already do

In terms of this:

In my experience, power corrupts, so even removing everyone from power, and replacing them would only be waiting for the time when the power of the replacements corrupts them as well.

Decentralization is a key to rooting out corruption. It makes buying people off much harder & riskier & more expensive if you have to try to buy off 38,000 people across the country & it is hard to screw someone over if you have to look them in the eye every morning & they know exactly where you live.

dazzlindonna
August 11, 2011 - 8:18pm

See, I figure I'm at least as smart as the average bear, so unless I'm completely deluding myself, I'd venture to guess that if I don't see the obvious solutions, the less than average bears won't either. And this country is made up of average and less than average bears. These bears can understand the solution to a video showing cops beating the heck out of a person who isn't even fighting back. These bears can rally around that situation, and can protest such abuse. But say stuff like "all derivatives should be traded on an exchange. assets should be held at their actual value." and me and the other average bears go" uh-huh, whatev bro. " No, the average American doesn't understand economics, (or at least I doubt very much that they do), so no, the solutions aren't obvious to everyone. And I come from a state where the best and most liked governors in history were both extremely corrupt, with one even serving many years in prison, and if given the chance, the populous of the state would gladly re-elect either of them. Because they got stuff done. Right or wrong, that's the reality. Corruption isn't going away, no matter how many corrupt people you jail. Do I think we should jail them? Heck yeah! Will that solve the problem? I seriously doubt it. It's never stopped any other crimes from continuing on. Decentralization...not sure exactly how you'd see that working, but I see corruption at the local level every single day. Not sure how that would change anything. Again, I don't have the answers, but I sure don't think saying "it's obvious" is gonna move things forward any time soon either. In fact, to take that one step farther... you are someone I consider sort of a friend. We've met. We've spoken in person. I liked you. You might have even liked me. You'd be the kind of person I'd trust more than I'd trust some bear I've never met before, right? So when even someone I like and have at least some trust in, makes me feel stupid (and I know that wasn't your intention), then imagine how those other "talking heads" on tv make me feel. I tune them out. Other average bears tune them out. No point in listening to drivel that makes no sense to us, and makes us feel stupid on top of it right? So, anyone who thinks we're going to protest under those circumstances are probably going to be disappointed. Give us something we can truly "get", and maybe we'll rally around it. Talk over our heads and make us feel stupid, and all we can do is leave things in the hands of people who understand what they are saying.

August 11, 2011 - 9:15pm

...is to confuse & mislead people (so that they may be sold down the river and ripped off).

In the United States I don't expect anyone to protest until the issues impact them directly in an irreversible way. I suspect most people will remain selfish & willfully ignorant. And by the time they do care many will be driven by racism & such rather than looking at who is responsible for the actual problem. Did you ever see any of the ultra-right wing misinformed anti-fact meme about the foreclosure mess being because of poor minorities?

Diversion is a key tool to keep ignorance alive & well and that is what the "powers that be" are betting on as well.

I have no formal training in economics...but have read lots about it for a couple years. And one doesn't even need to know too much about economics to know that which is rewarded will continue and grow. If the banking class is able to rewrite the laws after the fact then there are no actual laws that matter. To that group the laws become nothing more than a "list of suggestions" to follow only whenever it is convenient.

Some small portion of people are putting in the effort to be educated. But most of the rest of them will get screwed.

The other hard bit is that in most cases the more clarity one uses with language (the above post used the word "fraud" 14 or 15 times) the less distribution it will get. It is no different than the interviews the media does about SEO where everything is black and white...nuance/meaning/understanding are not allowed into the product because they would either kill the colorful headline or require the reader to think. Both are no nos.

There are exceptions to the above...but they are just that: exceptions.

I prefer to read people who tell me the truth even if it is uncomfortable & even if it requires me to learn. Many folks want to be told everything is fine, even if it is not.

dazzlindonna
August 11, 2011 - 10:47pm

Ok, so now that we've established that I and my fellow bears are not only ill-informed, but are too lazy to put in the effort to become educated, we can begin to debate the point I was trying to make in the first place. This isn't about wanting to be told everything is fine. Even the average bears get that it's not. Ranting about corruption is fine and good. But what are the real solutions? Really. The ones that will actually make a real, significant difference. Making more laws? Putting more people in jail? Making government bigger? No, wait, making government smaller? No, what about...all these things have been talked about, implemented, unimplemented, ad nauseum over the decades. The reality is that nothing is working. The corruption is getting bigger. The system is so broken that it's impossible to tell what's even there anymore. The only way I can see for real change to happen is for the people to come together to make it happen, but we don't know what to come together ON. That's my point. And no amount of wishing for the general populace to educate themselves on any of this mess is going to make it happen, so might as well just scrap that idea, and come up with something else. Because otherwise, we end up with insane talking head politicians who know less than the average bear, but who have the podium anyway, telling us things, and people will believe them. We need people we trust to help us find solutions. You could be one of those, or not. I'm one bear who is willing to listen to your ideas as long as I'm not made to feel stupid or lazy. At that point, I might be able to help another bear understand something too.

August 11, 2011 - 11:00pm

...but rather enforcing existing laws. That is what needs to happen. The rule of law actually needs to be a rule (rather than a suggestion). But for the banking class it is not. That is the core problem.

Complex systems can get so complex that they have a sudden-stop collapse at some point. Some researchers believe that is what happened to many faded empires throughout history.

This is why having multiple income sources & multiple skills is so important...it gives you more options during market dislocations...you are not "all in" on 1 thing.

no amount of wishing for the general populace to educate themselves on any of this mess is going to make it happen, so might as well just scrap that idea.

That is probably true, yet exceptionally sad.

And that is precisely why we deserve what we are about to get.

mattmorr
August 12, 2011 - 1:43pm

dazzlindonna,

Check out a book called Economics in One Lesson by Henry Hazlitt. You won't be disappointed.

rumblepup
August 14, 2011 - 8:11pm

@Vaselinessa - I'm glad you added your comment on a blog where the author is involved with his community. It seems you picked the wrong guy to "fuck with" with extreme assertions that have no base in reality, and spew a rhetoric that is getting quite old and quite bothersome. Not to blow smoke up Aaron's ass ('scuse my French Aaron) but I must give credit where credit is due, when Aaron knows something, he's pretty much gold on it, and the backhand slap on your comment, which much eloquence I might add, it a very satisfying thing to see.

Now that I've brushed away the tard from my mind, I'd like to add a few thingums. I agree that what we don't need is new regulations or bureaucracy in order to deal with the cancer of corruption that has eaten away at our country, but we do need "an honest" cop on the beat to actually implement the rules on the books. Unfortunately, this shady and slight of hand legal manipulation has gone on for so long and has permeated so much of our culture, it's gotten to a point that we accept even the most subtle of infractions against what should be a beautifully healthy economy, in ways that we don't even realize.

I'm glad you mentioned Apple Aaron, and illustrated quite nicely some of the duchebaggery in their manufacturing process. However, and I haven't research your previous posts to see if you have mentioned this, when, in a supposedly consumer based society's history has it been OK to control the use of a product throughout it's functional lifetime? I can understand to a certain extent some amount of quality of service provisions that a manufacturer would like to see covered, but service level exclusivity with service providers that a subpar does not sit well with me. Apple might be able to tell me how to handle their IPhone, or the proper care and usage, but forcing a consumer to use AT$T and now Verizon, goes against everything I've ever learned about fair merchant practices, and I believe skirts pretty closely to violating First Sale Rules. They can say that their products "require" a certain level of service in the general market, and threaten you with nullifying their warranty, but the almost immediate rash of jail-breaking IPhones proved that they could work on any service. However, millions of Americans who should have known better just went along with this because of the "coolness" and "gotta have it" factor, never realizing that they've just been plowed.

And it's this naive acceptance from consumers of the all knowledgeable big freakin' corporate sales job that leads us further and further down what @dazzlindonna was describing, a sudden realization that we might have lost control of our own fates when it come to legal, consumer and lifestyle choices. I mean, tort reform is nothing less that corporate protectionism, but a certain conservative party lives and breathes by screaming it until they loose their breadth, and only when one realizes that the only fair fight we can put up as regular, everyday citizens against malfeasance from large corporate entities is in the court system, and even that has been chipped away since Reagan (the almighty one) was in office, do we realize that we have been snookered, and are royally screwed.

August 15, 2011 - 2:19am

in a supposedly consumer based society's history has it been OK to control the use of a product throughout it's functional lifetime?

As your comment stated...the problems here are a combination of consumer apathy & ignorance couple with the fact that in many ways consumers have a choice only amongst monopolies/duopolies (eg: the few remaining baby Bell companies & those who partner with them).

It is easy to say that Google is somehow more open than Apple on the cell phone operating system front, but if you asked Skyhook Wireless they would tell you otherwise. And an embarrassing internal Google email also indicated that:

it was obvious to the phone makers that “we are using compatibility as a club to make them do things we want.” - Google's Dan Morrill

If you want a deep dive into the corruption of media ecosystems by monopolistic powers research AT&T and the hush-a-phone & consider reading Tim Wu's The Master Switch. The Master Switch is an excellent book...one of my top 5 favorites I have ever read.

So I guess the answer to the above question where you added "supposedly" ... well it has always been fine & has always been the way of the world in media & communications...for hundreds of years. ;)

I also don't buy that our only defense is in the court system. I think it is typically and generally too corrupted by the same ideology of "company is more important than person" that the congress is.

Ultimately I think the only defense is through our purchasing habits: starve the beast & hope it collapses. I don't have a credit card or a single Dollar stored in any of the big banks. If 20% of people shifted to my approach on that front that would destroy a lot of the corruption right there. In many ways frequently changing consumption habits, favoring a #2 or #3 market player over the leader, and/or setting goals to consume less are the only forcing functions. Of course the government will step in and eat debt in your place, but if someone set up a viral campaign for folks to pull their money out of a bank like Bank of America or Wells Fargo or Citibank or whatever it wouldn't take a big shift to force them to collapse.

My only big issue with hoping for such social & political change is that government has a history of punishing the victim to make the criminal whole. Not only did the banks get a large infusion of cash & not only did the government ratchet up on debt to keep the banks afloat, but they also legalized accounting fraud to prevent the markets from valuing the big banks at what they are actually worth. In a society that allows the destruction of economic facts the legal system isn't the solution, but is part of the problem.

August 21, 2011 - 12:10am

Citigroup Collides With Death Pursuing Emerging Market Debts in Indonesia

After dropping his younger daughter at school, Octa walked into Citibank’s credit card collection department on the fifth floor of the Jamsostek tower just after 10 a.m. Four hours later, he left the 25-story building slumped motionless in a wheelchair -- a victim of what police allege was a violent assault by debt collectors. Driven to a nearby hospital in a Citibank car, Octa was pronounced dead on arrival.

So when others fail them, murder is appropriate. But when they fail society, its time for another round of bailouts & nobody is harmed other than the victims. Disgusting.

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