Anyway, shortly after this talk I came across a really fascinating clip from a CNBC business show that has been reposted around the Web. (I'm using this clip under the "Fair Dealing" provision of the Copy Right Act.)
What I was interested in was the clash of worldviews between the television host and the guest. Most business journalists tend to "drink the Kool Aid" when it comes to what passes for conventional wisdom among the moneyed classes. And very rich people, as a general rule, tend to carefully align their own personal interest with what they consider to be good public policy.
Imagine his surprise to find out that a very wealthy man---Chamath Palihapitiya, who owns a private equity firm and was one of the founders of Face Book---suggests that government aid should be going to poor people and small businesses instead of large corporations. But here's the reason why, Palihapitiya grew up poor. His family immigrated from Sri Lanka and his mother worked as a housekeeper and his dad was chronically unemployed. They lived on welfare for at least part of his childhood. As a result, he knows something about life that the vast majority of middle and upper-class people don't.
Moreover, as a high-powered business person he also knows some things that the vast majority of poor and middle-class people don't. As he alludes to in the exchange, the fact is that bankruptcy for large corporations is totally different from what happens to poor people and small businesses. That's because they have access to something called "pre-packaged insolvency". The idea behind this is that it really doesn't make any sense to totally destroy a company when it becomes bankrupt. Instead, the idea is that a court-appointed administrator is brought in to manage the process. If an outside partner comes along who wants to buy-up the company, the administrator is able to negotiate a take-over, including a price. That means that a company can go bankrupt and the administrator can sell it without the employees even missing a day's work.
The second point that Palihapitiya is making is that when large businesses take on debt it isn't all governed by the same rules. What happens is that it gets broken up into different "tranches" or slices. These different types of debt are governed by different rules. As a general point they are more or less risky---which means that if the company goes under, the debts that are less risky get paid first and the more risky ones last. To compensate for this, the less risky debt fraction generally pays less interest than the more risky one.
 |
| Graphic created by Thomas Splettstoesser and registered as a Public Domain Image under the Copy Left rule. Image c/o the Wiki Media Commons. |
Incidentally, one interesting thing I noticed was when the host suggested that employees often own shares in the company they work for. I'd ask you, dear readers, how many of you have ever owned shares in a company that you worked for? I've worked for a couple large corporations in my life---Consolidated Building Maintenance and Eatons---and I didn't know a single person who did. Palihapitiya called the host on this and I think the shock on his face explains how completely and utterly "out of touch" with ordinary people a great many television media hosts are about how the "other half" lives. The thing to remember is that any journalist you see on a big audience, legacy media channel has precious little in common with ordinary working people---instead, he's an extremely well-paid member of the ruling class. And it usually shows, like it did in this interview.
&&&&
What got them started was with regard to the airline industry, which leads me to my second point.
The guy who interviewed Palihapitiya was shocked at the idea that businesses should suffer from the effects of the Corona Virus outbreak. It's obvious that that he thinks no one in their wildest dreams could predict that something like this would happen. The thing is, this is total nonsense. Human history is full of pandemics. There may still be people alive today who went through the Spanish Influenza. Everyone has heard about the Black Death. Lots of experts have been warning that we are going to inevitably going to have something similar. For example, here's a TED talk on the subject.
The above talk is really worth watching, especially towards the end. That's because it describes how a small Canadian government program called GPHIN managed to use web crawlers (something that the computer companies use to develop statistics on things like websites) to stop the SARS outbreak from becoming a global pandemic like COVID-19. The speaker, Larry Brilliant (I know, a great name---he really lives up to it!) was also involved in starting a group titled InSTEDD ("Innovative Support To Emergencies Diseases and Disasters") which uses technology to help organizations from governments to grassroots citizen groups detect problems early, before they become too big to easily deal with.
The thing to remember about Brilliant is that he gave this TED talk in 2006 and as a major league expert on the subject of communicable diseases, he didn't say "if there is another pandemic", he said "when there is another pandemic". The problem with the guy interviewing Palihapitiya and most of the business people who he's spent his life fawning over is that they think that people like Brilliant are total and complete ass-hats that they don't have to listen to. "What do they know?" "If they were that smart, they'd be rich, right?" And the Wall Street and Bay Street "Masters of the Universe" use their money and influence to make damn sure that no elected politician every listens to complete and utter jerks like Larry Brilliant. See, that's the problem with our society, it isn't that no one can predict problems before they arise---it's that our leaders separate themselves from said experts so they never hear from people like them. And if by some weird fluke they do hear something, they dismiss it out of hand because it would make their lives a little difficult to put into place their advice.
&&&&
I'm working away at these stories in the hope that people will learn to support local independent media. If you want good news stories that aren't designed to pander to your prejudices or get you angry so you will click on ads, you are going to have to pay for them. All I'm asking for is a dollar a month, which is easy to do through the micro-payment option provided by Patreon and Pay Pal. Don't see this as you buying these articles, instead see them as a public service you are offering to everyone. These articles will never go behind a pay wall, so money will never be a problem. In effect, your subscriptions are providing an on-line library of research that allows people to learn the background of the important issues that dominate their life. Is a dollar a month too much for that?
&&&&
Here's one lesson we should be learning from the present pandemic. We need to cut down dramatically on activity that makes us susceptible to pandemics. That means a lot less jet air travel, period. As I pointed out in a previous blog post we are cooking ourselves to death with all the damn jet fuel we are burning. The tourism industry is simply too dangerous to allow it to continue at it's current size. Suck it up. Get used to it. The government needs to wean communities off it. No civilization in human history up until now has had this much physical mobility and it needs to be dramatically reduced.
Another big industry that needs to crash and burn are cruise ships. We've known for quite a while that if an infectious disease gets on them it can rip through the passengers and crew like a wildfire. Moreover, they are an ecological nightmare. So why exactly do we have to have them? Really?
One last thing. I've read that part of the way the Asian countries have been able to trace and tamp down their epidemics has been through using cell phone telemetry to do automatic contact tracking when someone tests positive for the virus. Invariably, I've heard Western critics suggest that it might be hard to get around people's privacy notions to do that here. My response to that is "bullshit"! We lost a great deal of our privacy already the moment we decided to let our population grotesquely over-shoot the carrying capacity of the earth. We have to have hugely complex governments and economies just to keep our collective heads above water. That means we've already "painted ourselves into a corner" and need to give up whatever fantasies we might have about the world we live in. There's no room for privacy when you live in a "global village". By all means work towards a better world, with a smaller population, more in harmony with nature, and based on respect for human liberty. But don't let whining about present compromises with that ideal get in the way of dealing with global emergencies like pandemic diseases!
These things---and a whole lot more---are how the human community will build itself a new collective immune system that will protect us from a great many potential problems. I understand that it's a nightmare to libertarians. Ayn Rand is no doubt rolling in her grave. But the fact of the matter is that it is what we need to do if we are going to have any semblance of a decent life living with the "new normal".
&&&&
Moreover, I say unto you, we need to deal with the Climate Emergency!
No comments:
Post a Comment