Greatest Trade Ever

In Gregory Zuckerman's book, "The Greatest Trade Ever," you can begin to see how the financial system has turned into a casino style betting system. There is only a loose connection to actual value. John Paulson made billions of dollars betting that there would be a collapse in real estate value. He was shorting subprime loans using CDS contracts on mortgage bonds. They were essentially insurance contracts on other bonds. If the bonds defaulted, you were paid. If not, you had to keep paying for the insurance, year after year.  

While everything he did was legal, it does make you wonder how that is possible. It seems the brightest minds have gone into creating complicated financial derivatives instead of studying ways to help our planet, or becoming medical researchers. 

Of course even medical research has a major capitalistic component. The focus is always on a drug to fix every issue. One of the reasons that bioidentical hormones didn’t get any research attention is that they cannot be patented. One of the reasons we have the industrial food complex is because the seeds that grow the corn that make everything in it, including feeding the cows, can be patented. Capitalism is not always steering us to where we need to be. On the other hand, as consumers, if we educate ourselves and see where we want things to go, we can at least do our part by spending our money ethically instead of taking the easy way out given to us by advertising.

The World is Flat by Thomas Friedman

What a great book. Not only does it inspire me to become an entrepreneur and think globally. But it also helps me understand the forces against the progressive movement. He does a good job of explaining the real roots of the Islamic extremists. And that helped me see the roots of the tea party in this country. They come from that group that once felt like the chosen ones. They were solidly middle class and white and felt like they were the true Americans. They see change all around them and they are scared. They are fighting back by trying to prevent progress and if they prevail, we all lose.

What can Capitalism do for our future?

As they say, capitalism is the worst economic system, except for all the others.
Alan Kahan's book "Mind vs. Money explores the relationship between intellectuals and capitalism. There is a 150 year tradition in the West of a certain contempt toward capitalism. Today, that is manifesting in the anti-globalism and even within the New Age back to nature movement.

I had just finished reading the book when I saw a review on the Progressive from Barbara Kingsolver and suddenly I realized how accurate it was. I personally love Kingsolver's writing style. But the skeptic in me has to admit that the movement she advocates, appealing though it is in some ways, is just not the way most of us want to live. We don’t want to lower our need for stuff. We want to save the Earth and we want capitalism to do it. It is also just impractical and elitist to assume that those in economic crisis would ever embrace these ideals.

In the book, "What Would Google Do", Jeff Jarvis makes the point that the companies that take our money need to see us as collaborators and really the owners of their brands. Some of us want to berate the consumer driven market place. But this argument takes us away from some of the negatives of a commodity driven market. Instead of consumers as a mass herd of spenders, it empowers us to get what we want. Moving forward, how can we interact with capitalistic enterprises and become better people in the process? If we want capitalism to solve problems, how to we spend our way toward that goal?

These are additional points made by the book:

Corporations will be the major players and it is up to the workers to keep up with the pace of technology to survive. It doesn't have to be that way. This is programming and we can change. 

We are caught in a growth trap. 

Classical economists and business experts accept a growth based economy as a pre-existing condition. 

When companies lay off employees, they are cutting the wealth of their own customer base. 

Resilient companies would keep a reserve of available workers by allowing for part time, temporary and job sharing.  If employees become more productive, they should  share the savings of increased productivity. An example of this-Professionals might engage for a specific purpose like an 18 month campaign. There should be a freelancers union. We need to shift from hours served to value created. 

Surrender to abundance-guaranteed minimum income. Economy should be people focused. 

Growth-As the market (peasant) economy grew, the aristocracy lost its monopoly over value creation. They began to stagnate. The nobles still wrote the laws so they taxed the bazaar, broke up guilds and outlawed local currency. They bestowed monopolies on their favorite merchants. This changed things over time to the top down economy we have today. Instead of selling wares, people sold their hours.

Industry was a way to replace the marketplace with unskilled labor via the assembly line. Industrial is more efficient only because it hides the true cost. There is environmental stress, the cost of the transportation systems, the wars to procure cheap oil.

Automation will continue to displace workers. 

All the value we create by giving our data to the big ones is something we should share. Jaron Lanier thinks we should participate, get paid and have access. The internet links only go one way as of now. 

There are some new trends in capitalism. Benefit corporations are those that prioritize goals, i.e.  social or environmental to benefit society. Plum baby food which sells organic food, is an example.

There are also Flexible corporations-Vicarious is one such company. 

Low profit and limited liability companies in the digital era.

There are socially conscious entrepreneurs such as Homeport New Orleans. 

Not for profit which is different from a non-profit. An example of this is Mozilla. 

Decentralized autonomous corporations collectively computed blockchain. There is no board or CEO. Rules and mission must emerge from consensus. Only individuals who create value are rewarded stock. Total transparency

Alternative currencies like Bitcoin exist to increase the velocity of money. Bitcoin proves there are distributed solutions to problems formerly considered the province of central authorities. Anonymity does not restore human relationships.

Wikipedia or Lawrence Lessig’s creative commons are places where music, writing, or code belong to everyone or no one.

A sustainable economy would recycle money.

Seed sharing commons in India and potato park in Peru are agriculture based commons.

Richard Stallman’s General public license for software would be relevant.

Elinor Ostrom is responsible for reviving serious thoughts about commons.

Open source ecology project might solve environmental issues.

FLOK in Ecuador is another commons endeavor

Ethical Bay, Fairmondo, and P2P Foundation are all in pursuit of these ideals.

Apple and Google rely on open source without paying back

Today, owning is less important than having access. That is why Spotify and Pandora have revolutionized music.

We need to start on the path from hoarding to sharing.

Airbnb host should be owners of the company.

Imagine an Amazon owned by the sellers, an Uber owned by the drivers or a

Facebook owned by those who participate. 

Why aren't we happier?

Gregg Easterbrook's 2003 book "The Progress Paradox" reminds us that our happiness should be increasing! We should feel gratitude to be part of the luckiest 1% of humans to have ever walked the earth. We should practice forgiveness to be happier.

We are transitioning to a Type 1 civilization and must leave our nationalistic, racial, fundamentalist, sectarian passions behind. The idea of caring about people you don't know is a relatively new concept.

The next steps for a happier US include:

Universal health care, a raise in minimum wage, and end to the wealthy ripping us off.

Worldwide, we must provide economic aid to continue to bring up living standards globally. Our country should not be selfish.

What gives us meaning?

Love, work, fulfilling our talents, and leaving the place better than you found it.

Easterbrook suggests that more intelligent people cope better with change.

One connection that I will make about universal health care is the criticality of moving from a fix model to a prevention model. One of the keys there is changing diets. If we could all eat affordable local, sustainable, organic whole foods instead of the crap that most people eat, one in three health care dollars would go away. It would also be good for the planet and maybe we could have a real food culture in America instead of these crazy fast food supersized meals.

Ironically, the industrial food complex is built on subsidies from taxpayer money or food would not be so cheap. We don’t buy the cheapest pair of tennis shoes or jeans but expect our food to sell at cut-rate prices. In the long run, local sustainable food might be much cheaper overall. But our system is rigged.