GE: The Story Of America

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If you were to pick one company that symbolizes how America has changed and been changed over the last half century or so, it would be General Electric. The company founded by Thomas Edison is in many ways a microcosm of the American economy over the last century or more. It rose to become an industrial giant in the 20th century, the symbol of America manufacturing prowess. It then transformed into a giant of the new economy in the 1990’s, a symbol of the new America.

Today, General Electric is a company in decline. After a series of problems following the financial crisis of 2008, the company has steadily sold off assets and divisions in an effort to fix its financial problems. In 2019, Harry Markopolos, the guy who sniffed our Bernie Madoff, accused them of $38 billion in accounting fraud. The stock has been removed from the Dow Jones Industrial composite. Many now speculate that GE will end up in bankruptcy in order to reorganize.

For those interested in a longer discussion about the history of General Electric, Myth of the 20th Century did a podcast on the company. One aspect they did not cover is how General Electric transformed from a company that made things into a financial services company that owned divisions that made things. Like the American economy in the late 20th century, the company shifted its focus from making and creating things to the complex game of financializing those processes.

Like many companies in the late 20th century, General Electric found that their potential clients were not always able to come up with the cash to buy their products, so they came up with a way to finance those purchases. This is an age-old concept that has been with us since the dawn of time. Store credit is a way for the seller to profit from the cash poor in the market. He can both raise his price and also collect interest on the payments made by his customers relying on terms.

For American business, this simple idea turned into a highly complex process, involving tax avoidance strategies and the capitalization of the products and services formerly treated as business expenses. Commercial customers were no longer buying products and services, but instead leasing them in bundled services packages, financed at super-low interest rates and tax deductible. Whole areas of the supply chain shifted from traditional purchases to leased services.

For example, a local supplier of industrial goods used to own a warehouse to hold the products he supplied to clients. Inside would not only be the products, but material handling equipment like forklifts and shelving. Outside at the loading docks would be a fleet of big scary trucks used to deliver the products. Of course, to make it all work would be a staff of people loading and unloading trucks, moving product around the warehouse, making deliveries to clients and so on.

All of this would require a lot of money to acquire and maintain. That small local distributor would have millions tied up in assets. This is where the magic of cheap credit came into the economy. Companies like GE could go to these suppliers and unleash that capital tied up in those assets, by converting them into leased services. The trucks, for example, would no longer be purchased, but leased from a GE division that paid the taxes, did the repairs and provided spares in peak times.

As an aside, another aspect of this new leased economy is what happened with the people inside of it. That local supplier could not only lease his trucks and material handling equipment; he could lease his people. The building, the warehouse people, the administrative staff, the trucks, all of it, could be turned into a single lease payment for larger operators. This allowed the big players to muscle out the small players in just about every aspect of the supply chain.

What really made this new form of store credit work was both super-low borrowing rates for big players like GE, but also changes in the tax laws that allowed these lease payments to be treated like depreciation. The customer not only got the benefit of holding his cash he would normally use for asset acquisition; he could also get favorable tax treatment on the lease expense. To no one’s surprise, the big lobbyists for these changes in the tax laws were the financial services firms.

That is what GE became in the 1990’s. It was no longer a company that made stuff and financed it for select clients. It was a financial services firm that owned manufacturing facilities that supplied products it could finance. GE Capital became a massive commercial bank, not entirely regulated like a commercial bank and free to invent new financial services to meet its needs. They bought up manufacturing and commercial services companies, in order to monopolize their financing operations.

In the old economy, the credit system existed to serve the broader economy. In the new economy, the broader economy exists to serve the credit system. That which can be turned into a credit instrument increases in value, while that which cannot be bundled into a financial instrument loses value. Small players that provide specialized services lose value, while global players with easy access to credit increase in value. Everyone and everything serves the global credit system now.

This is what happened with General Electric as its credit empire grew. It was first and foremost a finance company. Since the flow of cheap credit was unlimited, the need to find new places for the credit became the point of GE. They bought companies in order to have new clients for their financing arm. They expanded the realm of that which could be leased and financed. By the end of the Jack Welch era, the point of General Electric was to grow bigger in order to supply more credit.

This financialization of the economy also allowed companies like General Electric to maintain implausible growth rates. This is where that credit machine at the heart of the company came into play. They could finance acquisitions with cheap credit. They could structure the purchase of a company in such a way as to realize its revenue now, while amortizing its debt and expenses. Suddenly that new division was wildly profitable through the miracle of off-balance sheet transactions.

The last financial crisis broke General Electric, by exposing a reality of the modern credit-based economy. Without new ways to move credit through the system, the credit system begins to seize up. Since the profit in this system is entirely through the skim, the slowing of credit means a collapse in profits. Once those profits disappear, the ability to make interest payments declines and that slows the system further. GE was close to insolvent within days of the mortgage crisis in 2008.

That is the real lesson of General Electric. The company became something like the old Mafia bust-outs. The whole point of the business was to squeeze every drop of value from clients and divisions. Instead of running up the credit lines and burning down the building for the insurance, General Electric turned the human capital of companies into lease and interest payments. They were not investing and creating, they were monetizing and consuming whatever it touched.

GE came close to collapse in the financial crisis, but they were bailed out. They stagger on, despite having lots of divisions that make high quality products. The cost of unwinding the company back into a normal company will be high, maybe too high for them to survive. The same can be said of the American economy. It will have to be unwound, but there will be no bailout. Instead, it will have to unwind quickly and painfully, in order to become a normal economy again.

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251 thoughts on “GE: The Story Of America”

  2. None of my hipster friends who own coffee shops own their espresso machine. They’re all leased from coffee companies, under terms which force them to purchase coffee and beans from those same companies.

    I stopped believing the myth of the independent small business owner when I found that out. Serfs, the lot of them.

  3. Having been affiliated in various ways with GE Corporation since before birth ( GE is a multi-generational employer and a family thing, much like the military or government ) I can vouch for Z Man’s description of what went wrong at the company. In explaining where the dominance of finance over product came from, he might have added something about the hiring of Ivy-League elites directly into the top ranks instead of promoting from the shop floor which was the practice pre-1990s. Once upon a time GE was a company run by engineers and not MBAs. Same goes for much of the business world, in my limited view.
    One other thought though, Mr. Z: this article reads like you own the stock and got burned on it. I hope not for your sake. It has been a very bad ride. Curious if my intuition is correct?

  4. As a former employee of GE I can say that GE changed a lot once Jack Welch took over. Things went down hill from there especially when it came to employee moral. It went from a great place to work to a place that you knew your job was in jeopardy
    once you turned 50. At 50 it seemed like the company aid “how can we get rid of this employee.
    I sued GE when I got laid off. I won $575,000. The judge gave them a new trial, the judge did not let the case go to the jury, he made a summary judgement and I lost. He also told me to pay all of GE attorneys fees. NOt sure how much they were because I told their attorneys to send me the bill and I will pay it but I will then take this case the news media, one I trusted.
    We must of come to a agreement that day because I never got a bill and I never took it anywhere.
    I still stay in touch with people that work there and the general opinion I get is they hate the place.
    Good luck to all the employees still there, hope things work out for you.

  6. Total side issue: Stefan Molyneux appears to have been removed from YouTube for violating their policy. I didn’t know they had a policy against acting.

    • Well, you know the new acting rules:

      POC may only be played by POC, because racism.
      Non-POC may only be played by POC, in order to increase Diversity, Inclusion and Equality.

    • They have a policy against IQ discussions, especially when it comes to race differences, which Stefan, to his credit, has talked about a lot over the years. 17 videos with genetic and IQ experts all vanished. He’s talked to Helmuth Nyborg, Linda Gottfredson, Steven Hsu, Jason Richwine, Charles Murray, and more. But go ahead and call him an “actor.”

  7. This post of Z’s makes me feel nostalgic for the days when we would focus on real issues that were actually important rather than the insane hoax du jour foisted on us by the ruling class and their propagandists

    • Well focusing on the Apollo street theater takes our focus off; $Trillions being taken from us and given to Wall street and so the elites. Including no doubt a bailout of GE.

  9. My father died in 1999 and left my sisters and me a small amount of money. One of my sisters bought GE stock at around $56/share (she did not consult with me about the purchase). I bought some gold and silver. Guess who is happier about their purchase ? /s

  10. I worked for a small company in LA that GE (after I left) purchased in the late 1990’s. They chewed it up and moved it for consolidation with other similar companies which were previously purchased (Allis-Chalmers, and Gemini (Chicago Pneumatic) compressor companies). All these companies were US founded and HQ’d.
    They moved into a new large, wonderful facility in Wisconsin (moving out of older location from A-C heritage nearby). Then GE purchased Nuovo Pignone (Italy) and eventually moved out of Wisconsin, killing all those American jobs for Italian EU jobs.
    Rumors I heard of the NP purchase came with Italian government funding/ties – I would like to the details. GE came to the rescue of Italy and American jobs were sacrificed at the alter of profit.
    I have a hate on for GE and will never buy any of it’s products. It’s a destroyer of worlds and a turncoat of America.

  11. Bezos has just banned Drumpf from Twitch.

    Meanwhile SJWs have set up a guillotine outside Bezos house.

    They really are cowards you know.

  12. Great post, thanks. If we’re going to learn to watch out for our own, couldn’t we come up with criteria that would trigger a response to credit-run-amok before we’ve been overrun with replacements and our institutions turned against us? Pat Buchanan’s presidential run was a tipping point, we should have taken covert action then, even as a political minority.

    • Drumpf was just banned by Bezos on twitch.
      Bezos woke up today with a guillotine outside his house.
      They’re cowards, they’re just not afraid of the Right.

    • I could never watch Molyneux because his self-infatuated manner is disturbing. I’ve always thought he was safe from banning, since he had the philosopher shield. And it would be pretty blatant to ban a well-spoken philosopher. Who, as Z said the other day, does plenty of PC signalling to keep himself safe. Things are moving rather quickly.

      • I’ve often wondered about the bans and how they worked. All the techies now have some sort of official Leftist doctrine in their Terms of Service but it’s usually quite (deliberately, I’m sure) vague. It’s also usually impossible to get them to tell you exactly what you were banned for.

        I suspect the censors are just a collection of SJW women with useless college degrees given more or less carte blanche powers to ban anything they want within the vague guidelines of the ToS. Perhaps the method to this madness is just to instill terror through random purges along the lines of Stalin. Eventually everyone with a channel is so nervous that they will ask the censors to review all their content before they even put it out. Everyone is then assigned a “minder” (commissar) who perhaps has specialized knowledge of the field in which they operate. This might be a good way to get a little Stockholm Syndrome working too. Eventually YouTubers come to love their commissars and feel that they are an essential part of the production team.

        It’s very obvious to me that the big tech platforms have entered “Wargames” territory – the only way to win is not to play. Clearly the tech platforms need to be redefined as common carriers and their teams of airhead college girl censors sent back to working the espresso machines and stripper poles. This is something Trump could still do in his 2nd term to redeem himself as something more than a speedbump on the road to The Great Convergence.

        • It’s so greatly beyond your “air-head sensor girls” of just a year ago. Your comment is very 2016.

    • From The Verge: “We have strict policies prohibiting hate speech on YouTube, and terminate any channel that repeatedly or egregiously violates those policies,” a YouTube spokesperson told The Verge. “After updating our guidelines to better address supremacist content, we saw a 5x spike in video removals and have terminated over 25,000 channels for violating our hate speech policies.”

      Of course they’d want to avoid the word “banned”. Too transparent. But it’s telling that they chose the darkly martial “terminate”.

      • We don’t have to pretend there are any objective, verifiable criteria for termination. The real standard is “We don’t like you.” The mass cross-platform bannings today indicate these originated from higher up, not the SJWs in the trenches.

  14. I just got around to re-listening to Zman’s “The Five Olds.”

    I noted that with his chief prescriptions, for White people to look out for White interests and to embrace identity politics, nobody fights harder against this than most significant writers and speakers on the Right. Identity politics is still the worst Bad for most of the Right. I see those, “the left’s embrace of identity politics is bad and divisive articles” it seems like every few days. And the gun rights crowd — otherwise one of the most rightwing of demographics — rides the “Gun control originated to keep Negros from having guns. Gun control is racist!” line hard.

    • I could not help but notice, even then, they saw fit to include a token Tutsi or two in the commercial.

      • Tutsis are “our guys”.
        Its the Hutus who are the real racists.

  16. Three out of four of the leaders of BLM are black trans women. Makes sense; the more oppressed you are, the greater your social capital with the party. They should all just take the plunge and convert to Islam. That way, they could harness their collect vibrancy to terraform Mars
    The trans element actually comforts me. It means the power structure is inherently tenuous and underminded, and that it just might implode instead of explode. What matters is not being near the event horizon when this implosion occurs, lest you be food for the vacuum.
    “If ye have not a sword, sell your cloak and buy one.”

  17. I couldn’t help but notice that all the comments in this thread, even the older ones, have 0 points. Is something going on with the point tracking system?

    • We have all been identified as Anti-Social Individuals and are no longer allowed to earn points until such time as the Party has deemed we are rehabilitated.

      • Shoulda bought the GE server, it takes a licking and keeps on ticking.

      • Yeah, just posting here probably makes it impossible to ever raise your social credit score. Even learning Mandarin and beating up a Tibetan probably won’t help at this point.

      • I just up-voted yours too Mike. Problem is that you only see the 1 until you reload the page and then trying to do it again tells you you’ve already voted. Suddenly voting here is like voting for Trump in CA.

  18. Lot of GE’s troubles come out their various reinsurance businesses. Got into them under the Buffet model of using the cash to harvest float. But that only works when you have management top to bottom that clearly understands the risks coming on the books–particularly the very long tailed variety. And GE did not any Ajit Jains (Buffet’s guy) nor the investment expertise. Got themselves into some very badly priced long term care and similar products that have become a constant earning drain in an environment where the investment income is nowhere near the projections in the models when the business was transacted. There are a lot of actuarial games you can play to cover it over in the short term (which I believe they did) but the monster keeps growing. Which it has. Employers Re, one of the companies GE bought was always sort of a cesspool, but the financial whizzes thought they had all the answers. But as is so often the case in that industry, tail risk is the ultimate leveler of hubris.

    • Float doesn’t work when the Fed is driving interest rates down to zero.
      If you’ve predicated your entire business model on 1980’s/90’s rates This chart shows why you’re fucked..
      Leasers of big equipment are borrowing at prime not credit card rates.
      https://www.macrotrends.net/2015/fed-funds-rate-historical-chart
      The last line is the kicker:
      “The current federal funds rate as of June 25, 2020 is 0.08%”

      • Problem is these blocks came on in the 90s, so even if you used the most conservative fixed income assumptions you got crushed. Add in that many of these policies (one sold in the early days of the product) had inflation guard provisions and medical inflation has run substantially ahead of general CPI. Normally, if you reserve the liabilities correctly, you then ladder the fixed income durations against the maturation of the liability. But if you miss the initial reserve amount, use the wrong discount factor and interest rates crash for two decade, you got a problem.

  19. In the 1980’s, my grandparents were still using the GE toaster they’d received as a wedding gift in 1930. That was not without a repair, however. In the mid-80’s my grandfather sent the toaster cord to GE noting that it had worn out and asking for a replacement. GE happily provided a replacement for free.

    • explains the popularity of second-hand and thrift stores. America used to make solid products built to last and still working. Wife and I just bought an American made stove at second-hand store for $250. I like to cook, and it works better than the modern stuff with their computers and crazy BTUs.

      • Not saying all second hand is bad, but the Goodwill or Habitat for Humanity that we have here in Central FL tend to have only certain items. If you want VCRs from 1980, Waffle Irons, Bread Makers and mouldering Readers Digest Condensed Books, they are your place! Most of the stuff is little better than yard sale grade. Even at the charity stores, a dirty little secret: the best donations are scooped up by the staff. If you’re shopping a one man show, you may have better odds.

  20. Here is a quote from Fr. Seraphim Rose that should clear these days up for everyone.

    “War against God: issuing in the proclamation of nothingness which means the triumph of incoherence and absurdity; the whole plain presided over by Satan. This in brief, is the theology and meaning of nihilism.”

  21. Good essay. People younger than 60 might not realize what a big deal the financialization of GE and its consequent decline is. Jack Welch is not über-rich hero but über-rich bookie. No, better: Jack Welch is the architect of modern corporate America’s destruction.

    • Jack Welch also more than anyone else started the elimination of job security. He laid off 10% of employees each year to make the divisions compete with each other and make sure that people never felt secure

  22. Unwinding our smoke-and-mirrors economy cannot come quickly enough. Scores are going to be settled.

  23. OT: I would like to protest the removal of the voting system. Contrary to it being a popularity contest what it does is allow for me (and others) who don’t have hours to scroll through the sometimes 500+ comments per topic here. It is a quick metric to sort so I can read maybe 1/2 of the stuff that is the ‘best’ since I’m sure most of us don’t have the time to pour over every single comment on each article.

    This has been my official protest post. Carry on!

    • Re: OT,
      Apparently I missed something, where was this discussed?
      I agree with Apex, for the same reasons,
      Z, please restore the voting system.
      Thank you…

  24. To add to the present volatility you can add the FED’s most recent projections about how the economy will perform.
    An earlier projection(early on during the Covid recession) had the unemployment peaking at around 10% and the GDP dropping 8.5%. This would all occur during the 2nd or 3rd quarter of 2021.
    A few days ago they released an updated GDPNow estimate. They project a 2nd quarter GDP drop of 39.5 percent. (That .5 percent seems to function as a significant figure in their minds.)
    That’s for 2020…not 2021 when they previously thought both GDP and unemployment would bottom out.
    Is this still called acceleration?

    https://www.frbatlanta.org/cqer/research/gdpnow

  25. The trucks are leased, the warehouses are leased, the employees are leased, the inventories are financed, and the customers, all up and down the chain, are financed. Somebody, somewhere, is holding a lot of unsecured paper on all of this. A deflationary reckoning will burn through it all like locusts on farm crops.

    • One of the things I think is important to remember is that those trucks are still there, the people are still there, the warehouses are there, and (even) some of the factories are still there. Bankrupting the financiers doesn’t make the capital equipment (especially the people and the land/buildings) disappear. It will take more work to get back up and running, but it could run again.

    • We don’t have much but we own it.
      Still the best long term.

      • same here

        I only buy things cash — or able to pay off the CC in a month or two.

        As an aside, you realize how expensive everything really is if you buy cash only.

        We do still owe on our house but not a ton

    • Ownership is only for a privileged few in our managerial state. Perfection will be reached when where everyone below elite status is relegated to leasing everything.

      Soon your rented refrigerator will refuse to open because you typed a raycism on your rented computer.

      But people say we’re crazy for wanting to unplug from this system and build something better.

      • Aye.
        No one really thinks we are crazy though. Prepping which is the training wheels for our society is perfectly mainstream now . Every Costco has food buckets that were hard as hell to get a few decades ago and even YouTube is chock a bloc with prepper videos and ads. Everyone has gunned up too.
        E tyranny will also destroy post industrial society over a short period of time.
        Its already in crisis as no one is reproducing and fewer and fewer people can maintain it.
        Worse the needs of woke and a society that is broke means more and more stuff is not being done and E tyranny requires a lot of complex inputs.
        Way I if figure it Antifa and its chums are smart enough to try and seize land after a half ass fashion and to realize you have to force people either to comply or get out, it will take not too much for our sclerotic bunch to realize they need to do that too.
        Leviathan is in full panic mode will try damned near anything to prevent that, no declining empire has dignity but its not fixable.
        Now to get the best outcome, what has to happen is a lot more talk of what would we do with power.
        How would we do better and how do we deal with our differences. This might attract a few Fed Posters but it will also atract a lot of new people too and make our brand palatable.
        Carping sucks. Ideas sell.

      • The interesting point about the move to electronic only currency is that in effect you will be renting money itself as if it was on a Kindle. Negative interest rates combined with the ability to lock out of any money source will make the new Dollar like songs on ITunes.

        You will have them until they are removed or blocked remotely. And if you don’t spend quickly enough that balance will start reducing, never mind the inflation effect). If you are outside the system a huge swathe of goods will be impossible to purchase.

        Its a Money Velocity dream.

  26. Sorry to be off-topic, but I just searched for “tucker carlson” on Youtube, and I get zero Tucker. The first Fox video is #14 on the list, and doesn’t feature him.

    Am I on a list or something, or has Tucker been nuked from Youtube?

    • No, if you put in 6/26 Tucker Carlson several vids of that episode (the most recent) appear.

      However, your point is not invalid. The fact that you CAN still see his videos on YT will be a short lived phenomenon if he continues sand-blasting his normie viewers with raw unfiltered RealTalk(tm) every single night. When you open the firehose of truth at both Dems and Repubs someone somewhere is going to silence you. Can’t have the sheep knowing the game is rigged and both paths lead to the slaughterhouse, innit?

      • No, if you put in 6/26 Tucker Carlson several vids of that episode (the most recent) appear.

        I see. But I still get nothing if I just search for “Tucker Carlson”.

    • Tucker isn’t at the top but I got his video, three down.
      YouTube does a lot of ideological traffic shaping though and puts stuff lit likes or ads up top.

    • You don’t see Tucker’s actual show in your YouTube search results because they don’t want you to. It’s a form of shaddow-banning. This has been going on for a while now, especially on Google searches. If you search anything on the further Right, you’ll get Southern Poverty Law Center hit pieces on whatever Bad-Think you’re searching for. You can find Tucker’s actual show on YouTube but they make you work for it. Search “Tucker Carlson” and prepare to sift through what CNN has to say about him first.

  27. Speaking of Woke Capital what is Facebook doing? Why are they defying the Official Religion and continuing to allow Hate Speech?

    A real question.

    My speculation and that’s all it is would be they’d lose more than half their Human Data Mining Capital er excuse me I meant “Customers.”

    Or maybe the real answer is their business model is optimized for outrage clicks.

    Strangely Breitbart doesn’t seem to lack capitalization, I wonder why?

    What could it be?

    Meanwhile Parler is washing feet, good prediction by Z.

    • I read somewhere that the most important and watched person on Facebook right now is Ben Shapiro.
      If true this means FB is trending mildly Conservative, old and normie not woke thus offending the only people who still use the service is unwise.

      • I actually think FBs model is outage porn clicks, as is so much of the media.

  28. I’ve got two words for you. Compound interest.
    When I was a kid you got compound interest on your savings account.

    • But now the low interest rates, fees and inflation makes it pointless. Savings accounts earn nothing anymore. Your better off buying collectibles.

      • My LEGO collection is appreciating better than gold

        Colored pastic >>> gold

        gotta laugh

    • After taxes it didn’t really keep up with inflation though.
      Even if the US could be forced to a no inflation economy via bimetallism, without sgrowth via larger families, there really is little use for all that capital and its value is low. Its downright deflationary.
      Ultimately even with a pay increase, for the most part consumer have enough stuff and ignoring for a moment the virus fear, can only use so many services.
      In essence, we have surplus production, a classic Marxist “crisis of production.”
      I have to idea how to solve it though work sharing, a lower work week supplemented by government aid might be effective to some degree.

      • Re. “ In essence, we have surplus production, a classic Marxist “crisis of production.”

        The magnificently unapologetic Oswald Mosley, says the same thing, in an interview with David Frost, in 1967. 

        “The trouble then quite different to the present situation was an overproduction in relation to a given market – that is the purchasing power of the western world was not sufficient to absorb the goods which industry were producing.” 

        “… In America the technocrats as they were called , who were highly paid engineers in American Industry were showing that the productive potential of America was so enormous that existing measures could not possibly absorb it and as as a result was there was unemployment , enormous unemployment over there and over here.” 

        “The particular problem was the inability of Britain, this top heavy island , to sell nearly a third of it’s total production on the markets of the world in open competition. Originally we had a monopoly position in the markets of the World. That was passing away and we were subject to intensive competition and failing to do it.“ 

        https://youtu.be/7j5jJ-VYSps?t=170

        He circles back to the very same issue in an interview on Thames Television in 1975.

        “The main problem is to adjust production to consumption. That is in plain language to give the mass of the people the power to consume the goods the mass of the people use.” 

        He says “you need production matched to consumption and that you need two things : a viable area and within that area the government given the power to act”. 

        Then he talks about the former British Commonwealth and Europe and viable areas. His solution is the will to power.

        He says, “ you can solve the problem if you are insulated from world markets and world finance. A viable area and the power to act.” 

        https://youtu.be/HNhF28fzN9I?t=1177

        I time stamped the links if you are interested. In both programs the interviewers are hostile and the studio audience is filled with bagel goblin’s heckling him.

        It’s not an area that I’m up on. However, this is very interesting to me, and it may be to you. 

      • Have you ever met a Texan? There’s never enough “stuff” to buy. The appetite for new things and experiences is infinite. Only the purchasing power is constrained.

        • I guess it depends on where you are I guess. People around here aren’t stuff people.

  29. Nazi economy was built on the assumption that all wealth derives from labor, and that finance industries are by definition parasitic in nature.

    • The Nazi regime had wage and price controls, spent like crazy, and had consumer goods shortages by 1937. As a matter of fact everything the Fed is doing today is eerily familiar to what the Reichsbank was doing in the 30s. The only difference is that the US loves butter more than guns but is financing plenty of both. I can’t think of anything more anti labor than wage controls or anti producer than price controls.

      • Germany was smaller than Montana and ignoring war and genocide here like most socialist ideologies did some dumb stuff
        That said future USA is not going to be a cheap labor country and its not going to be a nation that produces poverty and debt either.
        It doesn’t have to be socially democratic if its populist but wages will go up and jobs will have decent stability or it will fail.
        This is not an option BTW , pay enough for people to have kids or die off.

  30. Bravo Z: This sentence is key: “Since the profit in this system is entirely through the skim, the slowing of credit means a collapse in profits. ” That’s basically the entire woke economy aka globalist system. That entire paragraph is key. That’s also why they’re all so woke, because without woke they get no credit and go broke.
    Now the economy could unwind – or it could become Feudalized through the Federal Reserve et al – downstream bankers being et al. Which one do we see happening? I see the Fed feudalizing us through not just Woke Capital kneeling but so many of the rest having to beg for permission to exist, PPP and the like.

  31. I totally agree with all of this. And of course the ghoul Jack Welch was worshiped like a minor deity. Welch also had a policy of firing the bottom 10% of performers every year (force ranking) so yes the first couple years he got rid of dead wood, then it became a hyper-competitive, morally devoid (like Welch himself) zero-loyalty, scratching each others eyes out to stay alive kind of place. The best part of all is that Welch’s protege Jeff Immelt took over a company that was already exhausted and stretched to the limits, and it started buckling, Welch turned on him like Cujo. Immelt was implementing Welch’s exact designs, but Welch’s ego could never handle the fact that the end result of his leadership was a hollowed out money pit. That’s also a lesson for America as it declines. The people who did this to us do indeed turn on each other like a pit of vipers.

    • If you are the CEO of the company that owns the company that owns the company they work for, You expect to be treated well by some pissant “journalist” No?
      Welch was a bit extreme but still paid attention to the manufacturing core of GE, It was Immelt who completed the judeification of the company

      The same thing is happeng at all levels: people are becoming renters, not owners, of all of their life.

      • Immelt was the corporate definition of auto-pilot. He was Welch’s sock puppet the entire time and continued the legacy. Welch has no clothes. He doesn’t need them in hell. His condo down there might be next door to John McCain. “Straight from the Gut.” – Total Avarice.

  33. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”

    • Andrew Mellon. And he was right. High interest rates would accomplish most of this for us. However it won’t happen without a currency crisis because the entire economy, including all government entities and businesses large and small are entirely addicted to cheap credit. The shock wave (which must happen eventually) will obliterate so much of what we think of as rock solid.

      • That and the biggest debtor is the US Treasury. There isn’t enough funny money taken in to pay a 5% interest on Treasuries. But I’m not well versed in economics, or what passes for such these days, so what do I know.

    • Mellon was right, caveat he didn’t realize or maybe care that a lot of people were going hungry and that people cannot and will not wait to feed families.
      Something like food stamps would have allowed him to do the liquidation even against the wishes of the elite of the time but well, it didn’t and you got President for Life Roosevelt.
      As an aside If I did by research correctly, the US fertility rate hit 1.8 or so during the depression and a good argumen could thus be made that the post war period wasn’t a recovery but a bubble and the underlying economy has returned to its normal dire condition. Yike.

      • The good news is there will always be a way to feed families. The bad news is it may be other families. 🙁

  34. A friend of mine worked for one of the consulting companies, Deloitte or something like that, ten years ago and had one of the GE divisions as his client. I still remember him telling me about how the execs at that division were clamoring for more credit to do stock buybacks, the only way they were going to be able to retire with their nest egg intact.

    The PTB will fight tooth and nail against any sort of deflation. We are on a one way roller coaster ride worldwide with the central banks in charge of the machine. It can only go one way.

  35. GE’s aviation division builds fantastic turbofans for both commercial and military aircraft and most of the helo turbines for our military fleet. Ought to be interesting to see what happens with GE since they are one of the two main suppliers (along with Pratt and Whitney) of both the military and airlines.

    I think the greed of Wall Street has been helped by the fact they “help” write the regulations that govern their activities. It’s also interesting how Wall Street’s political allegiances have shifted to Democrats, who promise lots of cheap labor and more regulation to kill competitors with mountains of compliance costs.

    • What will happen—as has before with militarily important manufacturers—is that the Fed’s will step in to save that aspect of GE that is essential. They may require a merger, they may encourage a purchase, they might simply nationalize it. But it will never stopped manufacturing, or reach a level dysfunction such that it can’t handle our military needs.

      • I’d like to see the military side of companies like Boeing, GE, Lockheed-Martin etc. nationalized. No need for them to lobby the government, no suits getting huge salaries. Plus, weapons development would slow to a crawl giving the politicians pause when considering war.

        • I pity the day, probably not too far off, when the security agencies of the USG that issue clearances for the all the high tech work that offially doesn’t exist 🙂 have dodgy people to clear.
          For many high-educated specialties, the pool of possible employees is or will be dominated by Chinese and others with (likely) ties to the old country. Raising your right hand may satisfy the USG that you’re a citizen, but it’s not the same as being born here.

      • I think we’ll run out of microchips before that.
        As soon as China things they can get away with it, they’ll take out Taiwan’s production and starve the globe for them. They may not sell them to the US at all and while we make a few here, we make nowhere near enough.
        This only requires a a bit more uncertainty to pull off. Its why I hope that President Trump manages a second term and is able to get enough manufacture going to keep a backup plan.

        • Do you think we’d allow China to deprive us of our medications, medical supplies, or microchips? Wouldn’t the U.S. consider that an act of war?

          • The U.S. really isn’t in any condidtion to fight a war with China. Just as those loser National Guard bowed before BLM protestors, I think social capital has fallen to such lows that perhaps the military & public just quit a war with China once it starts.

  36. What is amazing to me is how simple a thing greed is, but how deeply and thoroughly it can rot a society out. There is no replacement, no complex system of financialization or incentives, that can replace good character and moral uprightness. I try to think of this when i am tempted to do the wrong thing: did all of this start with small personal compromises that just kept snowballing? I mean i know that a lot of this is just the presence of alien people who dont care about anything but themselves, but at the end of the day these things could have been slowed, stopped, or reversed by moral conviction and that was lost somewhere along the way, if anyone ever had it, probably one compromise at a time.

    Good article today. Nice change of pace for a bit from the doom and gloom we see everywhere.

    • Why would this surprise you? George Washington was grifter who wanted Indian land as much as freedom fighter. Jefferson couldn’t turn a dime.
      Hell Tom Sawyer and the picket fence was lauded not condemned by a great many.
      On top of that what the Left says about immigrants is true, they are just like us, here for the economy and like most migrants in our history, were economic ones.
      This makes a society of ideas and people an non starter
      Grifting is in our blood and moving to a developed regulated economy like we tried in the 30’s to the 70’s was met with a massive rollback effort.
      Hell back when we still had laws and locked up alot of peopel for S&L crimes, instead of learning to not be a scumbag istead the lesson learned was “lobby to make it legal.”
      This is the morality of the modern pot dealer, make your product more addictive (7x stringer and GMO), claim its safe than make it legal to avoid jail. Its disgusting
      If there ever is a new pro American regime, grifting will have to be stopped for good, not easy but mandatory. Anyone who isn’t down with honest work can leave.

      • Little hard on Washington there, of course he was prosperous but “grifter” is a bit much, not all business is “grift.”
        Of course if you’re under 50 I guess you would get that impression. Maybe 40. Its hard to say exactly when, but nearly all the grifts and bad behavior are no sooner than Bush I on GOP side and 60s on Dem side.
        BTW in the past the skimmers also Built. Even govt skimmers limited themselves. The Empire State building and the even more impressive Triboro bridge went up in a year. The current crop of scum built nothing, they used centuries of work as collateral for their shit loans rentier scam economy.
        Recently someone at the upper tiers of DC was informed by a braver than most subordinate “If graduates of Americas most prestigious schools were put in charge of our electric grid the lights would be dark in weeks.”

        That’s always one of my DR frustrations. All of you or too many are convinced you’re facing Moriarty- no your facing Mediocrity at best. They’re useless idiots, all they HAVE is Grift. They can’t do anything else.

        • Scheming to overthrow your sovereign in order to get a choice bit of land is low behavior in my option.
          And note despite what we are taught. many of the troubles the founding fathers faced were self inflicted as they had no lawful right to what they were asking for.
          I suppose this makes me a Conservative in the oldest European sense but so be it.
          Now I rather agree with you on mediocrity but they are still more powerful.
          More importantly, no one on our side wants power or is willing to take it . I’ve thrown shade on the Founding Fathers plenty but at least they knew to take power and use it.
          We are not nihilistic enough to demolish the cities which is good but our side does not want to actually run the cities, you know the place where nearly everyone lives or to take responsibility for fixing things.
          On top of that our own cultural divisions and justified lack of trust in each other’s group’s motivations means we can’t share a polity. Our cultural commons is too depleted
          The “together” meme showing a viking and a knight fighting the various tentacles of the deep state and Them is plausible but this doesn’t lead to a workable state after.
          In essence its like an abusive marriage we can’t live with the current State but we can’t live without it either.
          We either find some ideology that is manageable , find a way to split the place up and to keep it or we have to live within the current bounds.

          • Generally I like, however I’m skeptical about pre-Revolution America being the source of their own misery. At least the sketchy US history I learned, the Colonists wanted to be loyal British subjects but they were denied representation and suffered other abuses (tarrifs? stamp tax?) I don’t know the details. People don’t stage a risky rebellion if they’re happy with their government.

  37. Clarity matters. GE (like Boeing and other companies) was seduced into a transformation from producer into parasite. And, like a drug dealer that preys on the weak in order to manufacture new addicts, a few nefarious individuals used this corporate seduction in order to enrich themselves on the newly created parasite companies. It only took a few bad actors to accomplish this intentional looting. The good news is that they are few in number and clearly known. It’s the only way to be sure.

    • That is so funny. I got to his website regularly to see what he has to say. I like it that he just has a Lovecraft reference as the last post

    • A deliberate exaggeration on your part. 120,000 plus Americans have died already and the death toll continues to rise. Probably 300k by the end of the year. Flu typically kills 12k – 40k in a typical year. Your side’s policy of dismissing things you don’t understand will ultimately result in a huge Biden blowout victory. Enjoy it.

        • Never said I could solve it or even that it’s possible (it’s not). Just that you shouldn’t embrace conspiracy theories like it’s “just the flu.” The public obviously doesn’t believe that, so telling them something they’ll angrily reject will only drive them further away. Probably best to ignore it and let it run its course.

      • OK say its 7x as deadly as the flu.
        And?
        The US could depending on who got culled lose Black Death levels of the population and not even notice after a decade or so.
        That said a Trump victory is only to buy a bit of time, he Left has already decided that it will be settled with lead and while the Right wants no part of this, its inevitable.
        This union/empire is rotten to the core and voting solves nothing.
        As decent Conservative people we aren’t going out to do stupid illegal things but the wolf is at our dooor and its going to be fight or reeducation camp soon enough.
        Whites will fight, within limits they already are. Its going to be Whites and Friends vs Woke and Allies with most decent folk caught in the middle.
        Hopefully when its all over, assuming we aren’t exterminated, we’ll have enough to rebuild, The USA lacks important components for national security as a developed nation

        • Then it’s 7x worse than the flu. Not the Black Death, but not the standard flu either. Just be honest about it. That’s your best bet: “it’s a moderately lethal disease, mainly to the old and the sick, and highly infectious; though in some rare cases someone young will get sick; and there is basically nothing we can do about it now; wear a mask if you want, or not.”

          Bonus: if you’re willing to summon your inner Machiavelli, blame the whole thing on the other side because they supported protests which spread it around.

      • First, look at the CDC’s total # of deaths vs expected number of deaths. Covid numbers can be manipulated, but total deaths can’t. What you see is ~50,000 deaths so far this year in excess of what you’d expect in a normal year. So don’t give me that 120,000 going to 300k.

        CDC puts the Covid deaths at 110k, but, again, that number can be fudged. If Covid did kill 110k, then it reduced other types of death so who cares; it’s still ~50,000 excess deaths so far.

        The number of Covid deaths is falling just as you’d expect from a nasty flu that’s run its course. There is zero chance Covid deaths will hit 300k in this country. It won’t hit 150k.

        Covid was an extremely contagious and for people over ~75, fairly dangerous flu. But that’s all. You don’t destroy an economy over 50,000 excess deaths, 90%+ of which would have happened within 24 months anyway.

        Will you shut down the economy during next year’s flu season? What about dropping the highway speed limit to 35 to dramatically reduce auto accidents?

        Also, what proof do you have that locking down the economy saved a tremendous number of lives? You don’t. We could have just told everyone, “Hey, if you old or have some condition, stay at home until this virus runs its course. It’s not dangerous to anyone else so we’re going keep everything open so they build herd immunity as fast as possible, which will be safer for you.”

        • I’m happy to give you that number because it’s almost certainly true. You provided no link to anything you stated, and I have dozens of links to studies of excess death statistics. You’re also trying to conflate two different subjects to support your “economy” position. That’s uncalled for because the two subjects are not related to each other. Embracing this nonsense only makes you look dumb to the public.Thousands of doctors and scientists across the world are wrong but this guy here on the internet is right? No one is buying that and you lose credibility by implying it.

        • Makes no sense. And that article is from the Daily Caller. Not the best source. I’ve repeatedly debunked their coverage of this elsewhere. The death toll most certainly isn’t exaggerated, either. We have numbers from many different nations and they all show a large excess death toll in affected areas. For there to be an exaggerated toll, you’re talking a global conspiracy involving thousands of doctors and scientists. Embracing that nonsense only makes you toxic to normal people. Let your conspiracy theories go.

          • Quoting Dr. Birx means I embrace conspiracy theories? You’re too short for the ride on this site lad. Try Greta Thunberg’s.

  39. The post-Depression laws began to change in the 1980s. I remember when it was news that Sears (remember them?) was offering mortgages 😀 Later came the repeal of laws restricting insurance and banking to mix. As a result, my State Farm agent (I’ve used all my life) now offers banking and credit cards. I’ve not taken advantage of banking with them (or Sears.) Where was I going with this? Oh yeah, the only thing missing is a new Depression 🙂 The Glass Seagull 🙂 and other Depression era laws were of course meant to reign in the abuses that exacerbated the last crash. Of course removing those barriers doesn’t require a future crash, but it does invite the old abuses that caused grief in the past.

    On an unrelated note, I see that advertisers boycotting social media is now a “thing.” If only it were because they objected to restraints on freedom of speech. But no, it is due to “hate speech”. What suprised me is that I thought most of the BadThink (like us) had already been banished. I quit FecesBook end of 2018, have tried Twitter a few times (but too much noise) and even gave up on NextDoor recently due to censored discussions, and it was not even me. But now it appears the big advertisers are being pressured by Antifa & Co. to threaten a boycott of social media. I deduce the goal is to squeeze out whatever remaining BadThink exists on these platforms.
    Am I wrong? As Z or others often note, we are well on the way to a China style “social credit”* system, that magically won’t interfere with anyone’s civil rights, because all the shunning and de-platforming will be done with private entities. It’s good to know that Facebook or Youtube can pick and choose whom they’ll let speak, yet if I were to refuse service to a black person in my restaurant or store, you know what would happen to me. If we’re going to have civil rights, then let’s apply them to the social media. Nationalize them, declare them common carriers, whatever.
    Another pessimistic way to put it is: Have you ever heard a large corporation say “No, we are not going to ban XXX. We support the right to free speech, dissent and the need to discuss difficult issues. We will not bow to tiny minorities who seek to limit the rights of other Americans.” No? Didn’t think so!
    *We’d probably much better like a Scandinavian version of that word. It would more likely be a food bank or a credit union 😀

    • Nothing like your insurance agent giving you a hard sell on some laden with fees retirement investment. I’m going to have my barber service my car too.

  40. Welch was always highly regarded in business circles for his streamlining GE’s overall business segments – of course at the expense of ten of thousands of employees – neutron Jack. He did begin getting the company into the financial services during his tenure, but I always considered Immelt to be the ceo who drove the firm into the ground. GE is pretty much the perfect metaphor for the rise and decline of US manufacturing prowess.

    • Welch expanded the financial side of GE when there was both the capacity for the company to do so, and a falling interest rate-expanding real economy along with it. Circumstances on both sides of that equation have changed, and the company has been incapable of responding to them. There is probably a lesson in it of how maximizing one set of circumstances leaves you vulnerable to the downsides of others. Cases in point are dependence on China for things and the just-in-time processes. Optimized while they function, but a nightmare when they don’t or can’t.

  41. There isn’t a way back to an economy of things rather than finance and “information” that doesn’t start from the ground up.

    Private sector ETF outfits like Blackrock are increasingly replacing the Fed by performing services it is not legally permitted to offer – like picking winners & losers in the marketplace. And their scale is beyond imagining – tens of trillions of dollars in assets effectively under their control while they Talmudically deny owning the underlying assets.

    Having an ETF firm as the foundation for the American economy is even worse than the Fed. It makes bailouts mandatory and inevitable.

    Any run on an ETF immediately creates a liquidity issue because the underlying stocks cannot be liquidated rapidly and cost-effectively enough to meet immediate-demand payout without massive amounts of external cash or other drastic government intervention.

    GE isn’t the only megacorp that is resting on this foundation of sand. All of them, along with the entire U.S. economy and with it the world economy and its reserve currency, sink or swim with Blackrock & its money-lending subdivision still misleadingly know as the Federal Reserve banking system.

    There will be goods, personnel, facilities and some organizational structure that can be salvaged piecemeal from this rotten edifice but in terms of an economy for post-America, the rebuilding starts from the ground up.

    We’ll be doing the economic equivalent of removing old Roman building stones to build feudal structures in the post-Roman era. And that time is coming very soon.

    • GE was the company that popularized the “six-sigma” management philosophy, which was nothing more than “fire everyone at the bottom end of whatever metric you choose to measure”. This led to the Romneyesque hollowing out of assets and the offshoring of jobs, all dressed up as a Wharton School style MBA dissertation.

      • I disagree. I was a black belt and worked on many quality projects. A lot of it was B-school bullshit, but the systematic analysis of business processes has a long tradition in manufacturing. Applying those techniques to the whole business is not about “firing people at the bottom of the metric.” That simply did not happen. People got fired. That happens everywhere. It had nothing to do with Six Sigma.

        The whole Neutron Jack thing was a myth. Like everyone of his generation, Welch was a “core competency” guy. That meant getting rid of stuff that was better done by vendors or selling off divisions that did not fit the company. Welch was just aggressive with it.

        • “Systemic analysis of business process” is what a good executive is supposed to do. The problem with things like ‘six sigma’ and ‘agile’ and all the others is that they started as a good thing for a specific organization, but were cargo-culted by consultants.

        • Six Sigma is baby boomer as shit. All these people walking around with different belt colors on their credentials. As dated as team wear.

          • So what’s your point? It was 25 years ago, so yeah, lots of Boomers were in management back then. Corporate culture is always synthetic and cheesy. Anyone who has worked in a corporation knows this.

        • Six Sigma is good if you’re looking at making high quality objects. Looking at groups of people…Error.

      • Six-sigma is just a dumbed down repacking and mash up of several commonly used statistical tools and methods.

    • I agree. Who really knows what’s real anymore. How many people even scrutinize the holdings of an ETF? Why is some bank thrown in there that has no business being in there? Who was paid off to do that? And the pension “fiduciaries” are the worst. Hell, that Chinaman in charge of CalPERS is the biggest walking red flag I’ve ever seen. All kinds of terrible gambles are being made with pensions these days because they’re counting on the Fed, which will come through, but at the price of an eventual currency crisis.

      • CALPERS should be stimulating the hemp and lamppost industries.

        Illinois still has CA beat in overt corruption but CA beats them on scale.

  42. GE even owns (owned? it’s hard to tell anymore) its own propaganda division, NBC. It reminds me a lot of IBM, which used to make stuff through the 1990s, then sold all that off to foreign companies and now only offers vague “services.”

    What the lolbertarians and other GOP apologists for what passes for “capitalism” these days don’t realize is that pretty much every American company of a certain size now behaves like Mitt Romney’s Bain Capital: financializing and selling off assets to foreigners and using foreign scab labor to undercut Americans. They all behave like scrappers at auction and it’s why I won’t be voting for the GOP ever again: Republicans have sold their tinny souls to big business for so long they will always defer to big business’ desire for border jumpers and cheap Indians. And what do those Indians do once they’re in? Bring in and hire only their extended families, shutting out Americans while actively tweeting for their death. Republicans are race traitors through and through, sacrificing our posterity for a dollar discount on a software package.

    You could argue that even during the height of the industrial revolution, the big companies and trusts never produced any value; only small companies produce new technologies and are the hungriest for labor, and as soon as the mergers and consolidations start, both product quality and the workers’ quality of life decline. Not by accident was small business destroyed during the virus shutdown, leaving it open to predatory financialization: Mary’s Garden Center had to close and die; Home Depot and Lowe’s got all her business while tweeting about/funneling cash to BLM and changing their logos to rainbow flags.

    The lolbertarians and Conservative Inc types who are (even today!) still arguing against any rules and regulations for reining in tech totalitarianism never foresaw how closely late-stage capitalism would resemble the old state-owned enterprises of Communism.

    Few of the big companies left in the US today produce anything of value. These monopolies and oligopolies depend on government contracting and subsidies—they would never survive in a “real world” that no longer exists—and they extort customers to remain locked into their shitty products via fraudulent licensing agreements rather than “competing” for customers. They no longer innovate or produce quality products, but use foreign scab labor to barely maintain—in an ever-declining spiral of quality—the legacy products that white people designed and developed in the 80s and 90s.

    These corporate dinosaurs are even more tyrannical than the old Soviet state enterprises when it comes to social conformity. At least behind the Iron Curtain everyone was guaranteed a job, even the internally-exiled and even if it resulted in “inefficient” overemployment in certain sectors. But that “inefficiency” was because they understood the economy existed to serve the people—to provide full employment—rather than vice versa.

    In the dying US, not only has labor been “efficiently” automated and scabbed away, but the oligopolies maintain a tyrannical affirmative action army where it’s least needed: there aren’t enough workers actually doing useful things with their hands, but the army of diverse, female and gay managers and paper-pushers incessantly browbeat the dwindling number of real workers, sending them to diversity seminars and firing them for insufficient enthusiasm in the state Black Lives Matter religion.
    https://www.strike.coop/bullshit-jobs/

    All this has turned me into far more of a “third positionist” than I was even a year ago. The economy is so fake and gay that I feel instant revulsion and hatred of any libertarians and Con Incs that still defend it. They don’t understand that economies exist to serve the national polity, not vice versa, and it’s unlikely they ever will understand.

    • You admit that even a year ago you felt differently about all this, then condemn others to a life of ignorance. That kind of black pilling is destructive. If you and I could make it to shore, others can as well. Let’s figure out how to help.

  43. Vendor financing is a horrible, horrible idea. The incentives are just too perverse. There’s a possibility that GM may go bankrupt again for the same thing.

    • Subprime Auto Loans are a massive problem right now, I’ve heard. Don’t know details though, and you know how media is…

  44. GE leveraged its high credit rating to buy all sorts of assets with borrowed money. It turns out a lot of the assets weren’t worth what GE paid for them, assets where the nominal “valuation” was determined by GE’s inflated purchase price. The assets fell in real world value, while the outstanding debt abides. Individuals and governments are doing the same sorts of things.

    • Electric utilities did this in the 1980s in anticipation of deregulation. The one I worked for bought an orange grove, Colonial Penn insurance and a real estate development company. They lost money on all of them.

  45. I’m sitting in front of a GE motor/generator set at this moment wondering who’s going to be able or even want to work on something like this when I hang up my fluke in the near future. I’m guessing a little brown man unfortunately. the other day I needed a part from the shop.they sent it in a UBER. No more truck driver.As far as I can tell a lot of what we’ve been seeing goes back to the 1880s when ((lipshitz)) started to open department stores. People loved the convenience. The cobbler, blacksmith, cooper ,glazer all lost control over quality and pricing. That didn’t sit well with the fellas down at the beer garden and caused mr department store a lot of trouble. I don’t think people realize that we’re swiping ourselves into obsolescence… again

  46. The COO of my old company was a GE alumni. Like most GE guys, he’s super smart and detailed when it comes to improving operations. Like most GE guys, he’s also blind to strategy and customer satisfaction. At some point cutting costs, paying people less, and charging customers more stops working. Looking at how the old place is doing, I’d say they are way past that point.

  48. The US and the West in general is in for a very tough time in the coming months and years. People will find themselves in desperate straights and not know how it came to be. They will blame whomever the demagogues tell them are the evil ones that destroyed their lives.

    I was married in the inflationary 70s. I knew which evil bastards to blame. But I suppose I might have taken to the streets if I found everyone out of work; myself included.

    Out of work, hungry people might well be the tender that sets off the fires of violence in the streets.

    Regardless, we may see violence soon for a host of reasons.

    • [Grammar police = On]
      “Tender” should probably be “tinder.” Perhaps you actually have excellent grammar but subconsiously didn’t want to reference an App for men wanting to “take a walk on the wild side.” 😀
      But it’s a good accidental pun: the out of work could be the tinder (fuel) to spark the fire, and they could also be the tender (maintainer) of the fire once started.
      [Grammar police = Off]
      I agree the most with your point that the masses will blame who the media tell them is at fault. This is one of the scary things of social upset/revolutions. The Big Lie, propaganda, call it what you will. In Nazi Germany, it was one message. In Soviet Union, another. In USA, mid-20th century, it was (at times) the Commuist witch hunt. Today it is the Anti-Fascist Racist Hunt. To amplify an old saying: In war (including the war of ideas), truth is the first casualty 🙁

      • I plead guilty to the grammar police. As one who has taught math for almost half a century, I am lucky to type out a sentence; much less one that is correct.
        I did enjoy your explanation thought. Bravo.

        • Re. the tender v.e. tinder issue.

          This brought to mind the Tender which is a coal car, hauled behind a locomotive, carrying the fuel to fire the engine.

          So your use of tender does work in an oblique poetic or metaphorical way.

          Cheers !

          • Bless you Lurker. I’ll take any excuse that even partly works!

            I was being poetic. Yes, that’s the ticket.

            (h/t to comedian whose name I can’t recall just now)

    • Back in 2012(?) there was a big storm (Sandy?) that menaced the North East including Sodom on Hudson. Despite it being merely a big storm rather than the devastating Hurricane that the breathless media promised much property damage occurred (New Jersey especially suffered as I fondly remember) utilities were out- subways flooded etc. for a day or so. Within 18 hours there were reports (never from the corporate media) of gangs of Feral Joggers terrorizing whole neighborhoods of NYC.
      This was brought to mind by this piece from zero hedge of a couple of weeks ago.
      https://www.zerohedge.com/political/truck-drivers-reject-deliver-cities-defunded-or-disbanded-police-departments.

      Who needs sportsball as a spectator sport?

      All we’ve seen so far is the pre-season training.

      • Great post Bile. I remember that storm and the “joggers”.

        Joggers gotta jog, eh?

  49. Boeing is a very similar story. As the finance whiz kids moved in, the engineering standards slowly faltered. That’s how you moved from the B-17 which was famous for staying up after the Luftwaffe blew huge holes in it to the 737 Max, which has a tendency to fall out of the sky on its own.

    • That was not a coincidence. James McNerny, CEO from 2005-2015, came from the GE executive ranks and imposed GE-style cost cutting at Boeing. The 737 Max design disaster occurred under his watch, but he retired just in time to shift blame onto the new CEO, Dennis Muilenburg.
      I did a decent amount of tech consulting work for Boeing during that time. Every corner that could be cut was cut, twice. Complete disaster.

      • Thanks for the indepth. Engineering firms and manufacturers should not play investment banks.

  50. GE as a company that makes things is heavily dependent upon the aviation industry. Aviation is in for a rough ride. Demand is way down and is probably going to stay that way. Lots of bankruptcies are probably inevitable. Ship building and oil refineries are other sectors where they manufacture big ticket items. Neither of those are going to come roaring back either.

    While small businesses and paycheck Americans will get endless lectures about the integrity of the market and the benefits of playing by the old rules…Gov will pump trillions into GE and other too big to fail entities at your expense. Five years from now after you’ve lost your dry cleaners, hardware store, bookkeeping service and small construction firm…GE and Starbucks will have picked them all up with the help of Gov/Fed moolah. The free market at work.

    • I can’t find the image, but around twenty years ago the government was considering breaking up Microsoft. The cartoon shows two shoppers in a “Microsoft Mall” where all the stores are Microsoft-branded (but not software) goods and services. The caption says “I knew they would find a way to wiggle out of it!”
      Perhaps that is a future we shall see, but due to FAANG picking up the pieces, not because the Justice department took anti-Trust actions 🙁

    • Aviation is in for a rough ride.

      Not only because of the Virus. As the West, and the world, becomes increasingly 3rd worldized, flying will become less and less safe. The Canadian TSA is entirely non-white, Arabs, Sikhs and other vibrants who look to have a chip on their shoulders.

      The airport staff, security, and people who clean out the planes are increasingly taking on a Somali appearance, in Canadian airports.

      One day it will go boom, either due to malfeasance or simple incompetence. Air travel will become less and less attractive.

      • The Obama administration thought air traffic controllers were too White. They changed the screening criteria to a questionnaire that had, among other questions, “What sports do you enjoy?” I don’t know if that practice is still in effect or what impact it has had. Maybe I DON’T want to know.

      • Agree. Most major airline “hub” cities are experiencing the full glory of BLM peaceful marching. SEA, MSP, DFW, BWI, ORD etc…airlines are going to have a tough time selling tickets to cities that are not safe and hollowing out.

        Big cities are dead.

        • And it’s a tragedy. Unlike the majority of conservatives, I love the city. I love the energy, bustle, excitement, spontaneity, and career opportunities. I especially love the aesthetic of old cities.

          Seeing Detroit, NYC, Philly, Baltimore, etc. makes me seethe with anger, both at the blacks and at the whites for giving them up. I guess a new wave of cities are going to be hollowed out.

          Whites need a reverse white flight back to the cities. Affordable housing for whites, parks, urban planning. We don’t need more suburbs and rural areas have no power, though I don’t begrudge anyone who lives there.

          • Zman has waxed on the beauty of BWI before, and I agree. It’s heartbreaking to see it decaying rapidly.

            Minneapolis is as “urban renewal” as they come, gentrification on steroids (Riverfront/Old Mill District). Baltimore tried this as well with the Inner Harbor.

            You’d be insane to walk at night in either of these places, and you’d best keep your head on a swivel at night…in your large, sober group. For god’s sake, don’t bring children.

            Believe me, if you’d spent $700k+ on a condo in downtown MSP a couple of years ago, you’d be very, very pissed at the value you’d just lost, and will never recover. Nobody with any sense will buy in a major urban area that is heavily involuntary immigrant stock until freedom of association comes back.

          • Shelley v. Kraemer (1948), Brown Vs. Board of Education (1954) and the 1964 Civil Rights Act did the most to destroy our big cities. The virus and Antifa’s antics add the final flourish.

          • If you ever get a chance to go again, you should visit St Petersburg or Moscow. I was very pleasantly surprised when I was there.

      • That is scary … I also see many young men who appear to be Indian or Pakistani or African taking pilot lessons at the local airport. You do not want to see a would-be Jihadi as your pilot!

  51. I interacted with General Electric representatives while I worked on Capitol Hill between 1985 and 1995 and again while I worked for a regulatory commission between 1995 and 2004. I remember thinking that it seemed to be a terrible place at which to work; I’d do it only if I needed money for groceries.

    • Quite the opposite. It was one of the better places to work in corporate America. Of course, that is from the perspective of the dreaded private sector. Government work is another world entirely.

      • Whether or not it was a good place to work really depended on 1) how far up the food chain you were and 2) how good you were at networking.
        If you were C-Suite or C-Suite adjacent (VP of XX) the rank and yank didn’t apply to you. If you were a great networker then you could be confident that at minimum you would never be in that bottom 10%, and could likely be in the top group.
        But if you were a low level grunt in a back office somewhere, or were an introvert with poor networking skills, the environment was a nightmare. Constantly having to look over your shoulder to make sure others didn’t try to steal your work concepts, never being able to obtain assistance from anyone who would be ranked with you. It really was inhuman, and as such promoted to the high heavens in places like Amazon where a similar system is in place today. But with the added benefit of Indians looking out for their own caste.

          • Welsh did have a couple of good rules. One of them was no chairs at meetings…really forced people to get to the point instead of droning on and on.

          • Yes, that’s why most organizations have only CEO->VP->Supervisor->Grunt now. Sometimes there’s not even a supervisor.

            It sounds great but this is another reason why our world is so hollowed out now. That entire group of middle managers is gone, so instead of having a CEO make 500k and middle management make 10 million we have a CEO making 10 million and middle management is gone.

            This flat set up works fine for tech companies, but really limits opportunities elsewhere. There’s never any built up experience, there’s no room for that guy who’s great at his niche to stay long term at his level. Instead it’s just a constant churn of people who like climbing the ladder.

          • I started realizing there was a problem with my last company when my supposed manager who hired me snuck in an extra fifth layer of regional team managers, so it was

            Grunt -> Regional Manager -> US Manager -> VP -> CEO.

            The US Manager was generally useless and hostile so I’d almost always skip right over to the VP if I had something that couldn’t be handled by my regional manager. Fortunately, the VP was approachable and effective and the US manager honestly didn’t want to be bothered.

            The regional manager also hardly ever had anything real to do except coordinate who was covering for who with vacations or other scheduling conflicts. I think he was just there to insulate the US manager from the grunts and free him up for flashier work that made him look better to the executive team.

          • Then we have another good idea at a certain time and place turned into a scam.

          • Yes, thank the Government Employment God that we have positions like the deputy administrative assistant to the Assistant Administrator to the Secretary of the Department of Administration. 😀

          • That’s the GOP market worshiping nonsense creeping out again. The best parts of our lives are inefficient; family, faith, common associations and community groups.

            But you and many others have drank deeply from that well of efficiency. Why does it matter if someone’s job isn’t always useful? What’s wrong with careers that allow someone to coast after working hard for 20 years? Maybe your neighbor is less efficient than those Indians they bring in by the truckload; should we kick him out to make way for the more cost effective immigrant?

    • The 10% rule, which gave many a sociopathic CEO’s and McKinsey & Co vampires a hard-on for years, created a level of paranoia and internal politik that was ultimately toxic to the culture. As Z points out the lease-credit-arbitrage model did not spare the people. Why should it. If you aren’t building anything you don’t need to build your people either. The dark triad scrum for “talent” was just one more way to moralize and treating people as capital. Meanwhile, all the smartest guys in the room looked to GE for guidance on how to turn their people into savage opportunists too. I’m no fan of HR for what it has become but at least they pretended to be human about it. That era saw “Personnel” changed to “Human Resources” into “human capital”.

      • A lot of this has to do with eliminating “horizontal” trust and replacing it with vertical trust. The idea in economics was that vertical trust enabled coalitions to form that were poorly aligned with the goals of the profit-maximizing corporation. One way to eliminate this horizontal trust was to super-charge the promotions process: each step in the promotion ladder was a large increase in pay, so the competition for that promotion became much more intense.

        That is also one contributing factor to the dramatic increase in inclusion and stakeholder talk – few can live the empty lives that corporations want, so a million little rules that constrain behavior grow up. In a sense, the old ways, where you lived and worked in a community and therefore were constrained by those reinforcing bonds of the community, provided these constraints organically.

    • “You’ve nothing to say? They’ll drag you away,
      If you listen to fools, the Mob Rules!”
      — Black Sabbath, “The Mob Rules”

      • Saw that concert in Seattle, which is the recording that they used for the live album.

        • That’s cool LineIn. ’82 was a great year for metal. Didn’t see my first concert till ’84. So you got to be with the original creepy 70’s Sabbath fans, and the younger fans who turned on to Sabbath through Heaven and Hell in ’80. Around mid 80’s everything got so mainstreamed and “safe”. I’m jealous of guys who got to hang with the real fans, burnouts and creeps of say, pre ’83 metal concerts.

  53. We are in a new gilded era, only without the white people. The heart of the empire is being ripped out.

  54. As recently as the 1980s, we had decent anti-usury laws in some states. Time to bring them back in all states and at the federal level.

    • We son’t have a problem with usury. We have a problem with too much cheap credit. Interest rates of today were unheard of for most of human history. In 1965, even the most bullish financier could have imagined what is common today.

      • i wonder how many of your younger readers even know that banks traditionally gave 5% interest on savings account — and this in a very low inflationary environment.

        • Yeah, I remember. I also remember my parents mortgage interest rate being in the 15-18% range. Even my first mortgage in the late 90s was at 5.3%.

          • It’s very hard to get loans on agricultural land, so when we bought our farm in the ’90s it was at 9% financed by the previous owner. We thought that was fine.

        • My first bank account as an adult was in 1988. A savings account paid like 4% interest. What I don’t remember at 50 is ever living in a low inflation period. There are very few people living who can remember a period without inflation. Anyone under 75 has spent their entire lives in an inflationary environment. Anyone under 50 has lived their entire lives under a fairly high inflationary environment.
          Even according to inflation . com, there has been 50% inflation between 2000 and 2020. My lifetime has seen 600% inflation. Inflation.com doesn’t take productivity increases into consideration. The real inflation rate is probably a lot worse.

          • Depends on commodity you choose. A bad example is Gold 😀 When it had a monetary link it was valued (approx.) $20/oz (????-1933); $35/oz. (1933-1970), and not linked to dollar afterwards. Since gold is near $2000/oz now, does this mean that prices in general are 10x higher than 20 or 40 years ago (gold hit the $200s then), or for that matter, nearly 100x higher than the early 30s? Of course not. In fact, if you look at historical prices for common items, Gold seems to be grossly overvalued. I did a calculation a few years back using (for example) a gallon of gas. In the depression gas was probably $0.10/gallon. So an ounce of gold would buy 200 gallons. Today, that’d be worth about $400. Of couse to be more objective you’d use a basket of several goods and services.
            None of this is to claim that inflation isn’t a problem, of course it is. But it is not as easy to measure as it might seem. Also be skeptical of sources.

          • I very much agree that inflation calculators are not very accurate. I have made this argument right on this site. And as you mentioned, the price of gold, even a moving average just isn’t useful. Gold is no longer a monetary metal.
            Nevertheless, we have had steep inflation my entire life. That’s 50 years of inflation. There used to be a store at the corner of my childhood street and I can very vaguely remember buying 16oz bottles of soda for like a quarter. Soda in my area is 20oz today, but over $3 a bottle for the 20oz-ers. Granted, that is with a clown tax of .02 oz. There is a name brand bread in my area called Stroehmann. I can remember a time when it was about 29 cents a loaf. It is 4.59 today (the price is pre-printed usually) (though right now Walmart has it for 2.18). When I first started driving back in the late 80s, gas was always under a $1 and stayed that way through most of the 90s and very early oughts. Though it is more expensive, it is not nearly as more expensive as other items. Kerosene used to cost me about .79 and I now pay 3.50. Car insurance was always stupidly high in my area. Highest in the country, I think. Computers, otoh, are cheaper.

            All these prices should actually be lower. All of the cost cutting and productivity increases have been swamped by inflation. Had all this inflation not taken place, but everything else happened just the way it did (I realize this is an impossibility as credit expansion has enabled a lot of it), the price of everything would be minuscule.

          • 1970: NYC subway…20 cents
            2020: NYC subway $2.75

            1970: milk… 25cents per quart
            2020: milk… $1.40 per quart

          • Yes, well computers and telecommunications are usually not included. I remember the quip in a book about this, saying that for example, theoretically in 1945 you could have made a telephone call from New York to London, but it would have been astronomical in cost.
            Another reason is that quality is harder to define. E.g. is it fair to compare the average car of today to one fifty years ago? A century ago?

          • The quality of cars, I think has gone up. But the quality of computers, at least build quality has fallen precipitously. The quality of things like clothing, drapery and bed sheets have fallen too. The build quality of appliances has fallen.
            In some ways, it is that the lowest of the low has gotten much lower. Things that were cheap back when were higher quality than low end stuff today. A lot of the old stuff is gone and so comparisons are not always easy. But we do have a lot of specimens. There are washing machines, vacuum cleaners and dish washer and air conditioners that are still around. They were made from thicker and higher quality metal, the motors were much beefier, spare parts were usually available for a long time. If you maintained this stuff, it usually lasted a long time. If they did break, you could fix them. To some extent this is made up for by the low of just replacing the whole thing with a new one. It’s a mix of good and bad.
            I think the claimed increases in efficiency are mostly very overstated. Electronics have gotten a lot more efficient. But this is because they went from vacuum tubes to solid state. Nobody can possibly argue that a modern flat screen is less efficient than a 1960s RCA color TV. But is the air conditioner all that more efficient? Heat pumps (which is what an air conditioner is) have always been efficient. Electric motors, which are what drives the air conditioner, have not gotten a lot more efficient. Maybe they got 5% more efficient? Even that is doubtful. Same with refrigerators. Whatever efficiency gains they have gotten out of refrigerators is in the form of insulation or more efficient Freon (but I don’t know). I had a 70s era air conditioner replaced with a new one. My electric bill didn’t go down, but the air conditioner broke.

          • Try this one: a model T went for about $300 in 1925. Thats 15 oz of gold at $20 per oz. Today, a 2019 Ford Taurus is about $28,000, or about 16 oz of gold at 1750/oz. Inflation was 9,333% in 95 years (the Carter years really did us a hard one).
            You can do the same thing with Corvettes: $10,000 in 1980, $59,000 in 2020 – 600% inflation in 40 years.
            Or chevy Suburbans – $27,000 in 2000, $52,000 in 2020 – 193% over 20 years (the Great Recession dropped our typical real-world annual inflation from 10% to around 5% for 2 years).
            Inflation is a lot easier to measure than you are told: its just TPTB spend so much effort concealing it.

          • The “good man’s suit” argument (one ounce of gold bought…) and I agree that you can set up an infation gauge. But the problem is that different assets inflate (or sometimes deflate: computer power) over time, virtually guaranteed to be different rates. My earlier examples about a gallon of gas or a car, not only did the price change (dollars), the material quality of both has vastly increased over the years. The materials used to make a physical dollar, not so much 😀

          • I really hope you aren’t saying today’s gasoline is better than yesterday’s gasoline?
            Today’s gasoline has probably sent more small engines to the dump than any other single cause in the last 20 years.

          • I’ve often heard that historically an ounce of gold buys an adult cow or a nicely-tailored men’s suit. I think both are going for about $2k now plus/minus a pretty big spread based on the details.

          • Yes, but I’m guessing a cow or suit (a really bad one maybe) were not $250 just about twenty years ago, at a major gold low. Or for the matter, it’s at or near all-time high now. God is mnay things, but stable in price, it is not. 🙂

          • I remember riding the bus to school and hearing that price, wishing I had the money to buy an ounce of gold back then, but I was saving up to buy an HP 48GX for bragging rights. Priorities!

      • People don’t understand that cheap credit inflates asset values, and when the credit either gets more expensive or dries up, those asset values shrink dramatically, even as the outstanding debt stays on the books. That’s why the Treasury and the Fed are massively money printing and buying up assets, to keep the asset values up.

        • In the fullness of time, the “crossing the Rubicon” moment for America will be when the Federal Reserve decided to intervene in the credit markets. Once they stepped into prevent revaluation, they were trapped to do so forever.

          • Palace Economy

            Even if the fed manages to get out of the corporate bond market, the precedent has been set. Powell/Trump might be Sulla, but I seriously doubt that Pres. Harris and some lackey future chairman will be so timid.

            The next recession will provide an opportunity for the govt to be king maker for corporations, deciding who gets money and who doesn’t. The bond markets already assume that the fed will intervene during any crisis, which keeps rates low. Companies will grow (indeed, already have grown) addicted to those low interest rates. Most can’t survive without those rates.

            Companies that try to wean themselves off will find themselves at a competitive disadvantage to companies that effectively have free money.

            So far, Powell has been trying to avoid picking winners and losers, but future administrations will not be so neutral.

            Whether the fed is at any particular moment buying corporate bonds, it is now the dominant player in those markets and will remain so. Companies will rely on those rates, which means that they are beholden to the fed and, eventually, to the president and Congress.

            Power is consolidating.

        • You under-estimate the value of an idealistic mind unclouded by facts and reason 🙂 For example, to extirpate all the problems of inequality and poverty, all we have to do is tear down some statues, remove objectionable flags from public buildings (at least the ones we didn’t burn down), rename some things, and finally, suppress any debate, speech or thinking about political, historical, social or race issues that don’t fit The Narrative, think pure thoughts, and everything is going to turn out great! 😀

          • Yes. Absolutely wonderful until we are all told to line up for our Dixie cup (ooh, crimethink) of Koolaid courtesy of the new Rev. Jones. It simply amazes me that normies cannot see, as Severian so aptly noted, the avalanche of pebbles of bugfucking lunacy that are rumbling down the mountain to bury us.

        • The central banks are doing all they can to prevent inflation from going down and avoiding the word ‘ deflation ‘. I think part of it is that their revenues are predicated upon inflation and not deflation which would mean a reduction in revenue. We are ground down by the twin millstones of taxation and inflation. 

          I’ve been watching this asset bubble grow, fed by the lowest interest rates in history.The government and the bankers distort the free market and artificially raise the price of housing. 

          Unlimited immigration – even if the immigrants aren’t going to the particular neighbourhood in which a particular house exists, still serves to raise the price because of the phenomenon of White Flight which raises demand. The deductibility of mortgage interest serves to increase the price of homes, as does the existence of mortgages at all.

          Mortgages raise the price of housing by placing buyers who plan to pay back loans over a period of thirty years in competition with buyers who have saved up their money to buy the house outright. A person can much more easily come up with a large loan than actually save money; and the amount of money accessible by financing far exceeds what the average person is able to save in a reasonable amount of time. 

          Likewise, the availability of financing raises demand, and thus prices. Since not all houses go up for sale simultaneously, just a small proportion of buyers using mortgages can raise the price of houses outside the range of people who are trying to save the money to buy a house without a mortgage. 

          In practice, then, wide availability of mortgages causes prices to rise at a rate faster than the rise in wages, meaning that saving to buy a house outright without a mortgage is impossible for most people. So the mechanism of mortgages in and of itself serves to raise the price of housing high enough that mortgage loans are required in order to purchase a house at all.

          The actual free market is distorted rather than facilitated by capital, and the distortion is to the detriment of people who wish to own a house, both in terms of absolute price, and in terms of the excessive costs incurred through purchasing via a mortgage.

          It would seem that such is the case across the board – cheap credit on good terms and conditions, incentivizes vulture captialism, with gains privatized and losses socialized for the well connected pets of the government. 

          • A debt based monetary system requires inflation because money must be continuously added to the system to pay interest expense. If this process stops, it quickly binds up and then the system enters a deflationary spiral that feeds upon itself and is difficult to stop. The system prefers inflation where the elite are first to receive newly created money before it depreciates.

          • Yes, the Cantillon effect.

            It may well be that John Law’s Mississippi scheme and the Banque Royale’s banknotes presage the Petrodollar’s future. This is much more complex than my superficial understanding of modern monetary theory. 

            Zman’s point that the profit is in the ‘skim’ and that “… the slowing of credit means a collapse in profits… “ is trenchant.

            Deflation or slower growth would further negatively impact opportunities for the rake-off. 

          • Yes, I don’t understand the details, but as interest rates come (came) close to zero or lower, many of the money funds were in the difficult position of how to levy even a tiny expense ratio. Didn’t some money funds disband, in fact, rather than “earn” negative rates? Fortunately the FED is now buying damned near anything with a dollar sign on the left side 🙂 rending the entire affair academic.

      • It’s not so much the rates themselves as the idea of “money working for you” in general, particularly where those gains are preferentially taxed compared to income and are coupled with a bankruptcy system which caters to the worst cheaters without providing real relief to legitimate debtors who’ve fallen into “household zombie economy” status.

        Since the libertarians took over economics, the old conservative standard of “two cheers for capitalism” has become four.

        Government has almost entirely abandoned the idea of policing economic excess and instead promotes the worst abuses of unfettered finance capitalism.

        • On a related note, did you read Justice Kavanaugh’s opinion and Justice Kagan’s dissent in the Thole v. U.S. Bank case?

          In my view, Kagan’s dissent decisively and methodically punctured Kavanaugh’s dismissal of each of the plaintiffs’ arguments, particularly his rejection of the plaintiffs analogizing their position to that of trust beneficiaries.

          Thomas’ concurrence was also an embarrassment.

          • I haven’t looked at the opinions yet (read Striker’s piece) but this is typical of the contemporary approach to pensions we’ve seen since ERISA. They’ve effectively made pension abuse & fraud a toothless offense.

            I rarely deal with pension fraud cases because ERISA has already effectively rendered them cost-prohibitive for individual plaintiffs who’ve been ripped off and there’s a corresponding lack of work on the defense side as a result. Maybe a dozen, certainly less than two, in decades of experience.

            I also heard today that Roberts cited a case in which he previously dissented for the abortion decision.

            This is how the kosher sausage gets made – the overt Leftists disregard precedent entirely and do whatever they like, the Federalist Society-approved “conservatives” respect their unprincipled overreach as precedent.

            Every decision of the Supreme Court & most all of the appellate court decisions are just a cynical exercises in politics and results-first, cui bono justice.

          • Alan Greenspan was nursed at Alisa Rosenbaum’s teat.

            Are you one of our new resident libertarians or one of our new midwits looking for gold-star “akshually” points?

          • “The Maestro” was indeed sort of a libertarian lite, who sold out every core principle of that philosophy as soon as he unpacked his bags. It’s good to know that Conservatives aren’t the only ones who do that. The monetary seeds of today’s fiasco were planted in 1987, 1990, 1997 (LTCM), 2001 and 2008. All because a “libertarian” juiced the system instead of allowing for credit contraction, a normal recessionary function. And he always knew better. Then he has the balls to tell us all to own gold in an interview five or so years ago. Of course Alan, no thanks to you.

          • And she lived long enough to give him the stink eye when he was appointed Fed chairman 🙂 Greenspan was sort of an Atlas Shrugged Dr. Robert Stadter of the Finance world. The only thing missing was the doomsday weapon.

        • Don’t say that! I’m doing well on my Rainbow Parrot Tulip Dec ’20 contracts 😀

      • Cheap credit for the super-rich maybe. But have you checked the interest rates on your credit cards? I rarely carry a balance, but last I checked it is still 18-24% annualized.

      • That’s why I like the idea of a jubilee. Say after 10 years your debt is forgiven. It would limit the power of the financial system and keep prices low. Banks wouldn’t be handing out bad loans like candy, and they couldn’t package them in other financial products because they’d lose value.

        I guess initially it would allow the rich to buy everything up, but there’d be massive deflation so maybe they wouldn’t. At any rate it would make us a nation of savers again, instead of debtors. That’s the important thing.

          • Saving is freedom. Invest it, buy some land, sit on it and stop worrying about money. Whatever you want. Beautiful thing.

          • Absolutely true on a personal, level. The best investment in the world at almost any time is paying off debt.
            On a societal level though , especially for anyone wanting to live on interest , there is such a thing as the paradox of thrift.

          • If money holds its value you don’t have to make it work for you. What we have now intentionally devalues money so people won’t save. Seems to me tptb are most concerned with the velocity of money. If it’s not constantly changing hands (‘working’), the whole thing falls apart. Basically every creditor’s dream economy. It’s not a paradox but a byproduct of the system, and the system could obviously be changed. Build a monetary system based on value instead of debt.

          • No argument from me . Keynes needs to go. Still its way easier said than done as it reqires a very disciplined people and State.

        • The jubilee must have had a purpose. Popular with debtors, not much with creditors I’d imagine. If I had (((friends))) I would demand an explanation how the concept of the Jubilee appears in the holy book of a race known for being world-class money-lenders 😀 Mazal Tov! 🕍🎊👩

          • There was a time when Jews were a pastoral people with a homeland to keep. Then the Romans kicked them out, and we know the rest.

            I wonder what Israeli Jews think about the jubilee.

          • The Babylonians also has a Jubilee mainly to prevent the destruction of society
            The reason is too many people meant to be armed freemen defending it became debt slaves without arms or desire to preserve society.
            Its not that different here and I would bet that if we had a jubilee especially on college debt and stopped all subsidies as well, the current hysteria would start to subside a bit .

        • Wages measured as percentage GDP about 1/3 what they were in the 70’s. Also the people liable to want fancy sneakers tend to be have lower income.
          Thus its the market adapting or trying to. Though as Nike is seeing, as soon as anyone steps of the treadmill as they had to leave it do to the virus, the systems starts to implode. Nike lost like a billion in a quarter and while bailouts can keep the company alive, like everything in the global economy its a zombie.
          The smart long term thing to do is to allow a buffered collapse, make sure people have the very basics, kind of like what was done during the lock down but without bailouts.
          Problem with that as policy is that it may have no recovery point as the US is too factionalized and deindustrialized to fix things.
          The other option is basically zombies and while its awful I can fully understand why itw as done.

      • Z I say what I see is Feudalization thru the Fed, not unwinding but the forging of shackles.

    • Ending usury, periodically-clearing debts, much steeper progressive taxation on the top end and placing personal income, capital gains and corporate tax rates on an equal footing are major steps we need to start draining the American economic swamp.

      Contra Larry Kudlow et al, the economic problems of the Carter years did not stem from steeply progressive taxation. High-end tax rates didn’t stifle growth or innovation in the postwar years of America’s greatest prosperity – GE’s heydey.

      • Did anyone really pay those high marginal tax rates? They had to impose the Alternate Minimum Tax because they weren’t.

        • No one in the 50’s paid those rates because wages were flatter.
          A CEO made 20x the lowest workers wages as vs over 300x now.
          Let’s say you worked in a steel plant. You made maybe without overtime $160 a week.
          This is about $1300 a week modern money or 65,000k with benefits and a lower cost of living
          The CEO made maybe 1,300,000 modern money
          My comparison is such a job existed you’d make I dunno 50k with worse benefits and a higher cost of living and the CEO would get 21 million with benefits.

        • I’m sure very few did. Simplest proof of that is that there would hardly be any wealthy people or corporations that would have survived those years 🙂
          There have always been loopholes, exemptions, deferrals etc. In fact these were far worse pre-1982/86 tax reforms. Also in old days, not sure about income tax brackets, but FICA tax was a tiny fraction compared to what it got raised in 1980s fix. In 1990s most workers paid more FICA than in Federal taxes. Probably still true.

      • I used to think that State-ran banks that provided interest-free loans would be the way to go. Loan origination could be modulated via down payment levels, etc. I realize that this could allow for politicians to debase the currency but since were at $24 trillion fed debt now that argument seems a bit tenuous.

      • The inclusion of interest requires that new debt be created … there’s never enough money to pay the principal and interest. All of the money that is in circulation was created by debt. Pay all of the debt and there is no money left …

      • Lastly, its interesting to note that Aristotle argues against interest on the basis that money is barren. I believe that the Church held to usury laws until John Calvin’s time, just after Martin Luther. Interest was being allowed but not excessively.

      • If it wasn’t obvious, I was making a reference to how I understand the pre-WWII Germany banking system. After having to relinquish their gold for WWI reparations, Germany was bankrupt and resorted to, what I think they called, “Work Notes”. A 100% fiat currency, it was regulated by the German National banks, I think. The Germans eschewed the International (Jewish) bankers and proceeded create their own national monetary system.

    • Define usury in your context.
      Is it the older (early Christian) and/or Islamic definition of any charge of interest?
      Or is it excessive/unjust interest (and/or fees)? If this, how do we calculate what is just? Is it market related (weighing only general market risks), situation related (weighing in risk of the person)? How is risk determined.
      This is a difficult subject. I’m in the latter camp and don’t have good answers. Time is money for sure and interest should represent the cost of gaining access to money but also needs to add a risk element.

      • The tax code was completely re-written in the late 70’s due to inflation. The 1950’s tax code had loopholes you could drive a truck through. Any cost of doing business was written off. int he 70’s and 80’s these loopholes were closed off, but they detached the capital gains tax from ordinary income. All in all, the effective tax rates haven’t fluctuated that much.

  55. I wouldn’t even know a GE product if you handed me one. The company is something I don’t understand. I get the financial aspect, and that they supposedly still make stuff, but I haven’t seen their logo on anything in years.

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