This is the reward.

Thomas Frank drops a tremendous essay on the McMansion:

Inequality is the point of the McMansion, and the McMansion is also, to a certain degree, the point of inequality; it’s the pot of pyrite at the end of the rainbow of shit that we have chosen as a nation to follow. As you enter its soaring narthex of an entrance, keep this in mind: Before you, in the skim-coated drywall greatroom and the monster granite kitchen with its multiplicity of faucets and its Viking stove–this is what it is all about. This is the reward of thirty-odd years of economic policy.
There’s many great things about the United States.
McMansions are not one of them.

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Finance

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I Love Bitcoin

Bitcoin continues to sound fucking awesome:

A bitcoin bank has been forced to close after hackers stole 896 bitcoin, worth £365,000, in an attack on Sunday.

The company shut its website and posted a statement on Tuesday morning detailing the loss.
Sure, greedy banks that default and get bailed out with taxpayer money suck balls, but I’m not converting my money to Bitcoin any time soon. This is a shit show.

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Finance

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Roll The Dice

Sam Byford at The Verge:

Mt. Gox, once the largest Bitcoin exchange in the world, is operated from an unmarked Tokyo office block that offers no indication of its major, controversial influence on the digital currency’s health. No indication, that is, unless you’ve walked past the headquarters in the past week, where protesters are attempting to draw unwelcome attention to the company’s existence. “Mt. Gox: Where is our Money,” reads one sign. “Mt. Gox: Are you solvent?” reads another. What’s going on?
If you’re using Bitcoin as a legitamate currency, you’re an idiot.
There’s way too many unknowns surrounding it, so if you’re using it, you’re just rolling the dice.

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Finance

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Wealth Inequality

The wealth inequality in the US goes beyond being a Democrat or a Republican.
This is not an equal playing field.

via Upworthy

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Finance

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Pushing Daisies: Well, Allow Me to Retort

Back on the twelfth of this month, I published a post commenting on a list of the top ten dying industries in the United States. #2 on the list was newspaper publishing. I lamented the idea of newspapers struggling to survive and called it a tragedy. That post was linked up by Jim Dalrymple over at The Loop, and it’s generated a couple responses. Christopher Gizzi at So It’s Come To This wrote:

The world doesn’t go dark because dead trees no longer deliver the news. Governments and businesses won’t get away with corruption because news isn’t printed…It’s almost as if Bryan confuses the newspaper industry with the news industry. News will never go away and there will always be someone writing about some event – big or small…Facts and events still happen.

Marcelo Somers at Behind Companies wrote:

I don’t think that the industry itself of “The News” will die… newspapers are merely a form of The News… What we will see over the coming years is a consolidation of newspapers, which is fine. A single organization like the Associated Press is able to objectively report what happened in a much more scalable, re-usable manner.

The two of them bring up a valid point. The news would not disappear if every newspaper on the planet stopped publishing. But that was not the point I was making. I was lamenting the deep trouble that newspapers are in not because they publish actual, physical editions, but because they are content generators. As I wrote in the original piece:

Newspapers are content generators, that put a lot of time and resources into getting the stories they publish right…But with the coming of the internet, their profit model has been severely damaged, reducing the amount of resources they can commit to reporting.

Over the last twenty years, newspapers have been shedding staff and closing bureaus. The news is still there, but there are less people reporting on it. The less people report on it, the less information those of us who consume the news get. More and more papers are relying on the Associated Press or Bloomberg to do their reporting for them, making the news more homogeneous. Editors at papers that rely on wire services have no input with the reporters filing the stories. If an editor has a question they want answered or an angle they want pursued, they can do nothing about it. If, however, they still had their own staff chasing down a story, new discoveries could be made, and more depth added to what’s being reported.
Many news stories are very complicated, and cannot be serviced effectively by a single organization that is spread thin. Unlike other industries where consumers benefit from consolidation, the news is something where consolidation negatively impacts readership. Newspapers are the driving force behind the generation of news because they have a tradition of spending big bucks to go and gather news, and report it in-depth. Network television news consists of little more than snapshots of world and national events. Cable news fills its schedule with the political echo chamber. And many websites are largely news aggregators. (My jab at The Huffington Post as pseudo-journalistic was unfair. They have more original content than many formerly great newspapers that fill their front pages with wire service reports. But they have a long way to go before they can be considered the equal to, or successor to, the very best newspapers. A huge step was David Wood snagging a Pulitzer for his reporting. Another would be a clear line of demarcation between its reportorial and editorial staffs.)
Websites, even the best of them, do not and never have had the resources to get in-depth with their reportage. They cannot take the hit of spending a quarter of a million dollars a year to keep a single reporter overseas who may only file a story a week or less. It is expensive to report on complicated issues. Newspapers began that tradition of serious long-term reporting and as they pull back from that effort, no one is replacing it. That is what I believe is the tragedy of the downfall of newspaper publishing. I have no misguided affinity for the physical format of delivery. I lament the loss of the content itself.
For further reading about the newspaper industry giving up on generating content, here is an excellent article by Jodi Enda from the American Journalism Review.

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Finance

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Pushing Daisies

A new report is out on the top ten dying industries in the United States. There’s little that’s a surprise, but it is dismaying to see the list anyways. These are good industries that provided (and still do, in a couple cases) valuable services to the American people.

Among the lowlights on the list are #4, DVD, game, and video rental; and #6, recordable media manufacturing. This is one of those industries that has little real value left to it. Because information is now mostly weightless, there just is no space for an industry that relies on physical media as the lynchpin of their success. When these industries disappear, it won’t be necessary to shed a tear for them because the real product they dealt in, information, will still exist. The delivery method will have changed, that is all.

A couple of the industries that made the list do so purely from the effects of outsourcing. Shoe manufacturing, apparel manufacturing, hardware, all of these industries are hurting in the United States not because we can’t do them or because there is no longer a buck to be made. Rather, American businesses are taking advantage of the fact that the developing world has yet to have its workers’ rights movement, so wages are low. That’s it. No unions plus lax labor laws means that foreign workers are ripe for low pay and, in many cases, outright exploitation. There’s not much that can be done here in the states to reduce the outflow of manual labor to countries where it is cheaper. The burden, unfortunately, is mostly on the workers of those countries to fight for the rights that American workers did over a century ago.

It’s #2 on the list, newspaper publishing, that is a real downer. As I’ve written on this site before, newspapers are more important than their profitability. They don’t just move information from point A to point B. Newspapers are content generators, that put a lot of time and resources into getting the stories they publish right. Without newspapers, the idea of accountable government or business would be laughable. At their best, newspapers shine a light into the darkness. But with the coming of the internet, their profit model has been severely damaged, reducing the amount of resources they can commit to reporting. Former venerable institutions like the Philadelphia Inquirer and Los Angeles Times are being eclipsed by pseudo-journalistic sites like HuffingtonPost.com, which does little original reporting. The downfall of newspaper publishing is not something to shrug one’s shoulders at, like with Blockbuster falling apart. It is a genuine tragedy.

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Finance

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 /  / 

Charts Are Awesome

Ezra Klein over at the Washington Post has compiled a slideshow of charts made by economists that illustrate the economic woes facing the country. These charts are ugly as hell, from a strictly aesthetic standpoint, but they are beautiful in the concise way they present information. Unfortunately, the content of the information is quite frightening. Below is a selection from the original posting.
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This chart illustrates the changing nature of work for men in the United States. As women continue to enter and equalize the workforce, competition for jobs becomes stiffer. In addition, men have been steadily performing worse in schools and colleges for decades, leaving many ill-prepared and ill-trained for steady employment.
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The author of this chart put in a little gallows humor to emphasize the growing disparity between corporate profits and compensation to those that generate the profits. This is a powerful chart in that it brings to mind a fundamental flaw in our economy. As it now operates, the American economy is a powerful engine of revenue creation, but not job creation. In fact, in many instances, obliterating jobs can generate more profits than adding jobs. This is an economy caught in the throes of entropy, and a question must be asked: What is the point of economic growth if the majority of Americans see no benefit from said growth, or even find themselves slipping backwards?
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Finally, this chart has a great title. “The Toil Index.” This shows the ever-increasing amount of hours an American has to work in a month to be able to afford rent. From just over 40 hours a month in 1950 to over a hundred this past decade, it’s heartbreaking to see just how much of our labor goes to an essential need of human existence. The reality of our economy is that we are still far better off than our ancestors, but the promise of a better life has taken a huge hit.
So, these charts are ugly, beautiful, frightening, and fascinating.

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Finance

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Occupied

I work right across the street from where the Occupy Wall Street protesters have been setting up shop (spoiler: they’re not occupying Wall Street, but Zucotti Park).
While I haven’ been observing much of what’s been happening on the street (I’ve been busy working 45 floors up), they seem to be a fairly chill group, although I’m sure things get fired up and emotions run high at times.
I’m amazed at just how many more people are occupying Zucotti Park now, then when it started.
Here’s a few shots I took before work today:
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That is a lot of sleeping bags.

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Finance

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Serfdom

Umair Haque: The New Road to Serfdom

Welcome to the new road to serfdom. Here’s how I’d put it. Far from innovating our institutions in this time of historic, sweeping global economic crisis and social fracture, the very opposite seems to be happening–our institutions are diminishing, regressing, devolving, sliding back tens or hundreds of years at a time into economically prehistoric practices and beliefs.

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Finance

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The Opulence Bubble

Over at Harvard Business Review, Umair Haque talks about the opulence bubble we’re in:

To illustrate why I ask, consider this set of questions: How’s your house price doing? Where would your 401K be, if central banks withdrew life support for banks? How steep is a college education this year (hint: on average, 10-15% more than last year)? How are weekly grocery and gas prices doing? Where are commodity prices — not to mention gold — headed? Bubble, bubble, toil, and trouble: these days, it seems, everywhere you look, there’s a bubble inflating — or popping.

I believe the mini-bubbles above are different ripples in what might call the surface of a superbubble: an opulence bubble. Here’s what I mean by opulence bubble: our conception of the good life, as I’ve discussed with you, has been centered on what I call hedonic opulence — having more, bigger, faster, cheaper, now. But we might be finding out, the hard way, that the pursuit of lowest-common-denominator industrial age stuff might have been steeply overvalued, in terms of its social, human, and financial value. And now, it’s coming back down to earth.

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Finance

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Home Ownership Isn’t For All

From the Financial Post:

Peter Schiff is not what you’d call a typical homeowner. He doesn’t think buying a house is generally a good idea.

At least, not for the reasons many people give when they pull the trigger: That it’s an investment. That it will gain value. That when you’re all grown up, it just seems like the responsible thing to do.

“I own a house but I don’t expect to make any money off it,” says Mr. Schiff, chief executive of Euro Pacific Capital. “I own a house like I own my car or my boat. I need a place to live and I enjoy it. And I expect it to depreciate just like all the other things that I own.”

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Finance

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