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Working class people are being subjected to ultra efficient hypercapitalism, as in Uber drivers discovering they worked for free when they need to purchase a ne

Working class people are being subjected to ultra efficient hypercapitalism, as in Uber drivers discovering they worked for free when they need to purchase a new car. Meanwhile Wall Street has been bailed out 2 times in the last 15 years alone with monetary policy. How many people went to jail? (And they haven’t learned a thing, on the contrary and quite spectacularly so.) If you want to know where the tech bubble comes from, don’t think about the talent pool in SV. Think 2008 and central banks. It's not normal for investors to accept visionaries wasting endless billions for years on end. Except when the availability of capital appears infinite and risk appears almost non-existent. In contrast, a big group of people stagnate and even get squeezed. Not rich enough to enjoy the high life of the zero/negative yield world. Or to overcome decades of inflation. Not poor enough to just give up and go on food stamps. Ultimately, it’s not about a tech bubble. It’s about a credit cycle on steroids, held together with spit, rope and gum and massive moral hazard. Who gets access to the funny money first? And who will be left holding the bag?

dvdhnt 9y ago
You've clearly articulated an ideal I've felt for over a year but couldn't convey completely. Thank you!
koonsolo 9y ago
The whole credit card system in US is made to rip off "stupid" people, extremely so. Nobody writes about that, probably because everyone from US thinks it's normal, and nobody from the rest of the world knows about it. But that system is made to screw all the people who are not good at personal finances.
- slackingoff2017 9y ago
  It's built to screw poor people. If the choice is between getting another credit card or losing your apartment you end up in a lot of debt.
- losteric 9y ago
  The root cause of most American problems is poor public education. We're still over-emphasizing passing grades over effectively growing new American citizens... Personal finance is rarely offered and never mandatory, yet we collectively bare the burden of financial ignorance. The same applies to other subjects like statistics or civics.
  - maxxxxx 9y ago
    I didn't learn finance in Germany in school but we all knew that taking on massive debt is stupid. It's the advertising and easy access to consumer credit. Wage increases have been replaced by easier access to credit.
    - ringaroundthetx 9y ago
      German culture has a mass distortion on the perils of consumer credit. The "debt is evil" crowd is just an extreme as the people that irresponsibly use debt. Maybe you should learn finance.
    - the_mitsuhiko 9y ago
      Germany is the other extreme though. Not sure if that is healthier.
      - kuschku 9y ago
        The German model definitely has lower risks. If something goes wrong, there will still be something left with which you can rebuild. The American high-risk model on the other hand is definitely one that isn't long-term sustainable, but it wins out in short term, until another crash happens.
        maxxxxx 9y ago
        I think especially in the last 30 years the risk has been shifted to lower incomes. To me that's the real evil.
  - 9y ago
- osteele 9y ago
  Maybe. Or maybe (many) poor people are acting rationally given their economic circumstances. See ["Reframing the Debate about Payday Lending"](http://libertystreeteconomics.newyorkfed.org/2015/10/reframing-the-debate-about-payday-lending.html http://libertystreeteconomics.newyorkfed.org/2015/10/reframi...) (a pop summary of ["Interest rate caps and implicit collusion: the case of payday lending"](http://www.inderscience.com/info/inarticle.php?artid=58089 http://www.inderscience.com/info/inarticle.php?artid=58089), DeYoung & Phillips), or other articles linked [this episode of Freakonomics](http://freakonomics.com/podcast/payday-loans/ http://freakonomics.com/podcast/payday-loans/). These articles are about payday loans, not credit card debt, but (1) some (but not all!) of the same concerns apply; and (2) I suspect much discussion of “poor people” and “credit cards” lumps together these forms of debt anyway. I've seen other comparisons of payday loans to banking services for low-wealth individuals. (I don't have these at hand. I think Bannerjee & Duflo's _Poor Economics_ may cover some of this.) The banking services and fees that middle-class individuals see aren't available to the poor, so it's easy to draw false conclusions if you're generalizing from your own circumstances instead of studying theirs. I agree that “the system” is screwing poor people. It's less obvious to me that this is because the poor aren't good at personal finances (let alone that they're “stupid”), and therefore that education would largely address this – although, according to some studies summarizes in the DeYoung & Phillips work, it might make some difference.
  - Domenic_S 9y ago
    Yep. This whole thread is full of cringe. TFA was about how silicon valley & Washington are The Elites -- out of touch with the working class and what are everyday problems for a huge swath of America. And the top 3 comments from the elite are: - Poor people are stupid - Poor people are bad at personal finance - More/better education (government) will help Did everyone suddenly forget all the un/underemployed college graduates we've got? Are they stupid, too? Just a shocking lack of empathy here.
    - closeparen 9y ago
      >Did everyone suddenly forget all the un/underemployed college graduates we've got? Are they stupid, too? I think you'll find the HN consensus is that they're stupid (or were tragically misled) for going to college in a major other than computer science or engineering.
- valuearb 9y ago
  If you want to gamble on starting your own business it's amazing how much money you can easily borrow on credit cards.
  - avremel 9y ago
    Sounds on target. Anyone in the US can start a business based solely upon churning credit cards. For illustration purposes: Let's say you swipe at the start of the billing cycle, you now have about 60 days to repay. We will also assume that you have 10 acquaintances willing to swipe for you, each with a credit line of 80k, you suddenly got 800k credit to start. The more being spent, the higher the credit line offered by the banks. Add the incentive of credit card points/cash-back, and it's no wonder people are blinded by the risks of swiping. The end result? Small business owners will take heavy risks with an outsized amount of capital.
- xyz451 9y ago
  I bet a lot of the credit card debt eventually gets written off. I heard a statistic a few years back 05/2014. Essentially 1/4 credit card debtors had more on credit then they had in the bank. Those levels of debt are unsustainable on a macro level. Some bank somewhere won't get paid. Then we'll have 2008 all over again.
- xyz451 9y ago
  I bet a lot of the credit card debt eventually gets written off. I heard a statistic a few years back 05/2014. Essentially 1/4 credit card debtors had more on credit then they had in the bank. Those levels of debt are unsustainable on a macro level. Some bank somewhere won't get paid. Then we'll have 2008 all over again.
- xyz451 9y ago
  I bet a lot of the credit card debt eventually gets written off. I heard a statistic a few years back 05/2014. Essentially 1/4 credit card debtors had more on credit then they had in the bank. Those levels of debt are unsustainable on a macro level. Some bank somewhere won't get paid. Then we'll have 2008 all over again.
rogerthis 9y ago
Join this to the hedonism and nihilism of post-war generations and you have the Steve Bannon's Generation Zero documentary.
- deleted 9y ago
  [deleted]
penpapersw 9y ago
Can confirm. I worked a pretty decent software job with lower pay than others make for the same job for the past 5 years. Could barely afford insurance for my wife and I. We actually had to just give up and not pay for it the first few months of this year before I was laid off, figuring that paying the "fine" for not having health insurance plus whatever unlikely emergency medical costs we might have was cheaper. As soon as I'm laid off, we're on public aid and have the best insurance, and since every job I applies to rejects me, and haven't found any freelance work through sdegutis.com yet, it looks like we'll have a few more months of being able to have better health insurance than I could afford when working a decent programming job. The system is broken and literally ridiculous.
- deleted 9y ago
  [deleted]
- kbos87 9y ago
  The right answer is to lie, cheat, steal, and hurt those who are one step ahead of you because they've figured out "the game".
  - HillaryBriss 9y ago
    even better: lie, cheat, steal, and hurt those who are ten steps ahead of you. they're the ones with all the money.
    - penpapersw 9y ago
      I'm sure there's got to be a way of getting ahead that doesn't involve lying, cheating, or stealing, from anyone, no matter how much they deserve it.
      - HillaryBriss 9y ago
        yeah, i have to agree. but, if someone has already made the decision to lie cheat and steal, why target someone just one step above? it seems better to take from someone with a whole lot more than everyone else.
rayiner 9y ago
It's interesting that you identify ultra efficient hyper capitalism as the problem, then point the finger at Wall Street traders betting on mortgage backed securities. They really have nothing to do with each other. To the extent you can blame anyone for ultra efficient hyper capitalism, blame programmers. It's programmers that allowed Uber to turn the inefficient and leisurely taxi industry into the Uber/Lyft rat race. It's programmers who develop the on-demand work scheduling algorithms at places like Wal-Mart. Programmers are the reason why Amazon can take over all the mom & pop stores, turning warehouse workers into appendages of machines. Programmers are the ones who enable international mega-corps to enjoy unlimited economies of scale.
- nine_k 9y ago
  You speak as if customers do not also enjoy lower prices, faster delivery, lower fares, wider choices, etc. All this is also enabled by the very same platforms.
  - rayiner 9y ago
    I didn't say otherwise. I like paying $10 for an Uber ride from someone scared I'll give them a bad rating, instead $15 from a surly, unaccountable cab driver. I'm just pointing out that if you think that's a problem, blame the people responsible for it.
    - ouid 9y ago
      The idea that responsibility is conserved is a fallacy. In the case where a system which had lots of failsafes fails, all of the failsafes are wholely responsible for the failure
    - rockinghigh 9y ago
      Who do you think is responsible for low prices?
    - wpietri 9y ago
      Really? I much prefer the cab. I'll always take honest surliness over false suckuppery. Especially when most of the time what I actually get is honest friendliness.
vmware513 9y ago
Do you guys think, maybe a capitalist, but more social system will be more maintainable long term? Similar like in Sweden or in Finnland? As I know these modern countries reallocate some part of extreme revenue to other part of the society who in needs and the whole population is more equal.
- jpttsn 9y ago
  Sweden is smaller than the US, and plays a different role in the world. I don't think the same systems are apt.
- unknown_apostle 9y ago
  Not sure, the final word on Sweden is not out yet. Also, (imho) the problem is not some people making more money than others. The problem is that the grim reaper of capitalism is still hard at work for regular working people, but has been quite absent at crucial points in time when it comes to certain big capitalists. Wrestling mom & pop into submission and taking over their land is less hard if you don't really have to worry about mundane things like being profitable, paying taxes, complex legislation, risk consciousness in investors, personal liability, mark to market accounting or making sure your constructions are capable of surviving some slight financial turbulence.

dvdhnt 9y ago

You've clearly articulated an ideal I've felt for over a year but couldn't convey completely. Thank you!

koonsolo 9y ago

The whole credit card system in US is made to rip off "stupid" people, extremely so. Nobody writes about that, probably because everyone from US thinks it's normal, and nobody from the rest of the world knows about it. But that system is made to screw all the people who are not good at personal finances.

slackingoff2017 9y ago
It's built to screw poor people. If the choice is between getting another credit card or losing your apartment you end up in a lot of debt.
losteric 9y ago
The root cause of most American problems is poor public education. We're still over-emphasizing passing grades over effectively growing new American citizens... Personal finance is rarely offered and never mandatory, yet we collectively bare the burden of financial ignorance. The same applies to other subjects like statistics or civics.
- maxxxxx 9y ago
  I didn't learn finance in Germany in school but we all knew that taking on massive debt is stupid. It's the advertising and easy access to consumer credit. Wage increases have been replaced by easier access to credit.
  - ringaroundthetx 9y ago
    German culture has a mass distortion on the perils of consumer credit. The "debt is evil" crowd is just an extreme as the people that irresponsibly use debt. Maybe you should learn finance.
  - the_mitsuhiko 9y ago
    Germany is the other extreme though. Not sure if that is healthier.
    - kuschku 9y ago
      The German model definitely has lower risks. If something goes wrong, there will still be something left with which you can rebuild. The American high-risk model on the other hand is definitely one that isn't long-term sustainable, but it wins out in short term, until another crash happens.
      - maxxxxx 9y ago
        I think especially in the last 30 years the risk has been shifted to lower incomes. To me that's the real evil.
- 9y ago
osteele 9y ago
Maybe. Or maybe (many) poor people are acting rationally given their economic circumstances. See ["Reframing the Debate about Payday Lending"](http://libertystreeteconomics.newyorkfed.org/2015/10/reframing-the-debate-about-payday-lending.html http://libertystreeteconomics.newyorkfed.org/2015/10/reframi...) (a pop summary of ["Interest rate caps and implicit collusion: the case of payday lending"](http://www.inderscience.com/info/inarticle.php?artid=58089 http://www.inderscience.com/info/inarticle.php?artid=58089), DeYoung & Phillips), or other articles linked [this episode of Freakonomics](http://freakonomics.com/podcast/payday-loans/ http://freakonomics.com/podcast/payday-loans/). These articles are about payday loans, not credit card debt, but (1) some (but not all!) of the same concerns apply; and (2) I suspect much discussion of “poor people” and “credit cards” lumps together these forms of debt anyway. I've seen other comparisons of payday loans to banking services for low-wealth individuals. (I don't have these at hand. I think Bannerjee & Duflo's _Poor Economics_ may cover some of this.) The banking services and fees that middle-class individuals see aren't available to the poor, so it's easy to draw false conclusions if you're generalizing from your own circumstances instead of studying theirs. I agree that “the system” is screwing poor people. It's less obvious to me that this is because the poor aren't good at personal finances (let alone that they're “stupid”), and therefore that education would largely address this – although, according to some studies summarizes in the DeYoung & Phillips work, it might make some difference.
- Domenic_S 9y ago
  Yep. This whole thread is full of cringe. TFA was about how silicon valley & Washington are The Elites -- out of touch with the working class and what are everyday problems for a huge swath of America. And the top 3 comments from the elite are: - Poor people are stupid - Poor people are bad at personal finance - More/better education (government) will help Did everyone suddenly forget all the un/underemployed college graduates we've got? Are they stupid, too? Just a shocking lack of empathy here.
  - closeparen 9y ago
    >Did everyone suddenly forget all the un/underemployed college graduates we've got? Are they stupid, too? I think you'll find the HN consensus is that they're stupid (or were tragically misled) for going to college in a major other than computer science or engineering.
valuearb 9y ago
If you want to gamble on starting your own business it's amazing how much money you can easily borrow on credit cards.
- avremel 9y ago
  Sounds on target. Anyone in the US can start a business based solely upon churning credit cards. For illustration purposes: Let's say you swipe at the start of the billing cycle, you now have about 60 days to repay. We will also assume that you have 10 acquaintances willing to swipe for you, each with a credit line of 80k, you suddenly got 800k credit to start. The more being spent, the higher the credit line offered by the banks. Add the incentive of credit card points/cash-back, and it's no wonder people are blinded by the risks of swiping. The end result? Small business owners will take heavy risks with an outsized amount of capital.
xyz451 9y ago
I bet a lot of the credit card debt eventually gets written off. I heard a statistic a few years back 05/2014. Essentially 1/4 credit card debtors had more on credit then they had in the bank. Those levels of debt are unsustainable on a macro level. Some bank somewhere won't get paid. Then we'll have 2008 all over again.
xyz451 9y ago
I bet a lot of the credit card debt eventually gets written off. I heard a statistic a few years back 05/2014. Essentially 1/4 credit card debtors had more on credit then they had in the bank. Those levels of debt are unsustainable on a macro level. Some bank somewhere won't get paid. Then we'll have 2008 all over again.
xyz451 9y ago
I bet a lot of the credit card debt eventually gets written off. I heard a statistic a few years back 05/2014. Essentially 1/4 credit card debtors had more on credit then they had in the bank. Those levels of debt are unsustainable on a macro level. Some bank somewhere won't get paid. Then we'll have 2008 all over again.

rogerthis 9y ago

Join this to the hedonism and nihilism of post-war generations and you have the Steve Bannon's Generation Zero documentary.

deleted 9y ago
[deleted]

penpapersw 9y ago

Can confirm. I worked a pretty decent software job with lower pay than others make for the same job for the past 5 years. Could barely afford insurance for my wife and I. We actually had to just give up and not pay for it the first few months of this year before I was laid off, figuring that paying the "fine" for not having health insurance plus whatever unlikely emergency medical costs we might have was cheaper. As soon as I'm laid off, we're on public aid and have the best insurance, and since every job I applies to rejects me, and haven't found any freelance work through sdegutis.com yet, it looks like we'll have a few more months of being able to have better health insurance than I could afford when working a decent programming job. The system is broken and literally ridiculous.

deleted 9y ago
[deleted]
kbos87 9y ago
The right answer is to lie, cheat, steal, and hurt those who are one step ahead of you because they've figured out "the game".
- HillaryBriss 9y ago
  even better: lie, cheat, steal, and hurt those who are ten steps ahead of you. they're the ones with all the money.
  - penpapersw 9y ago
    I'm sure there's got to be a way of getting ahead that doesn't involve lying, cheating, or stealing, from anyone, no matter how much they deserve it.
    - HillaryBriss 9y ago
      yeah, i have to agree. but, if someone has already made the decision to lie cheat and steal, why target someone just one step above? it seems better to take from someone with a whole lot more than everyone else.

rayiner 9y ago

It's interesting that you identify ultra efficient hyper capitalism as the problem, then point the finger at Wall Street traders betting on mortgage backed securities. They really have nothing to do with each other. To the extent you can blame anyone for ultra efficient hyper capitalism, blame programmers. It's programmers that allowed Uber to turn the inefficient and leisurely taxi industry into the Uber/Lyft rat race. It's programmers who develop the on-demand work scheduling algorithms at places like Wal-Mart. Programmers are the reason why Amazon can take over all the mom & pop stores, turning warehouse workers into appendages of machines. Programmers are the ones who enable international mega-corps to enjoy unlimited economies of scale.

nine_k 9y ago
You speak as if customers do not also enjoy lower prices, faster delivery, lower fares, wider choices, etc. All this is also enabled by the very same platforms.
- rayiner 9y ago
  I didn't say otherwise. I like paying $10 for an Uber ride from someone scared I'll give them a bad rating, instead $15 from a surly, unaccountable cab driver. I'm just pointing out that if you think that's a problem, blame the people responsible for it.
  - ouid 9y ago
    The idea that responsibility is conserved is a fallacy. In the case where a system which had lots of failsafes fails, all of the failsafes are wholely responsible for the failure
  - rockinghigh 9y ago
    Who do you think is responsible for low prices?
  - wpietri 9y ago
    Really? I much prefer the cab. I'll always take honest surliness over false suckuppery. Especially when most of the time what I actually get is honest friendliness.

vmware513 9y ago

Do you guys think, maybe a capitalist, but more social system will be more maintainable long term? Similar like in Sweden or in Finnland? As I know these modern countries reallocate some part of extreme revenue to other part of the society who in needs and the whole population is more equal.

jpttsn 9y ago
Sweden is smaller than the US, and plays a different role in the world. I don't think the same systems are apt.
unknown_apostle 9y ago
Not sure, the final word on Sweden is not out yet. Also, (imho) the problem is not some people making more money than others. The problem is that the grim reaper of capitalism is still hard at work for regular working people, but has been quite absent at crucial points in time when it comes to certain big capitalists. Wrestling mom & pop into submission and taking over their land is less hard if you don't really have to worry about mundane things like being profitable, paying taxes, complex legislation, risk consciousness in investors, personal liability, mark to market accounting or making sure your constructions are capable of surviving some slight financial turbulence.