Risk and Reward

The basis of any capitalist or free market system is risk analysis. Every investment, whether in time or capital or short-term inventory is made based on the potential reward for success and the potential risk of failure. Because these events happen in the future, confidence or anxiety often play a large role in the process.

Generally speaking, it’s all about the availability of the critical resource being invested. People with nothing left to lose often put their time into a project because their time is all they have. Capital markets flush with cash are often looking for places that will give them a big return. Yet in all of these cases, emotions eventually become important.

Lately, nerves are raw. Investment? You gotta be kidding.

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Redefining Work

A busy day calls for a repeat. This piece from two years ago demands a revisit in light of the potential for inflation now that we are approaching full employment and wages are indeed rising.

Is technology a net creator or destroyer of jobs? The question is as old as the Industrial Revolution, when workers in mills found themselves put out of work by large industrial looms. In France, they threw their shoes (sabots) into the weaving machines to destroy them – the origin of the term “sabotage”. The protests didn’t stop the machines, however, and the workers had to find something else to do in an ever-changing economy where machines did more and more work.

Today, the pace of technological change is faster than ever, with new gadgets coming into our lives constantly. Automation is also transforming our lives, with new robots and artificial intelligence replacing workers constantly. Are today’s productivity gains tomorrow’s unemployment? Increasingly those who study technology in our lives and the popular media are coming to the conclusion that yes, workers are net losers in the race against tech. And this is not a partisan issue.

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Global System to the Test

It’s become popular in the politics of many nations to re-think free trade and globalism. Many people believe that something has gone terribly wrong and, for many reasons, politicians typically point to foreigners or a faceless “global order” as the problem.

This belief is not limited to the US by any means. It ranges from a sense of discomfort to a belief in “fair trade, not free trade” to outright sneering at “globalists”. Is there something wrong in the global order?

The short answer is yes, but the long answer is incredibly long and, interestingly enough, green on the back.

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The Storms Behind, The Storms Ahead

How many disasters can we take at once? The short answer is that while the US is continuing to rebound nicely as the economy restructures, it’s still a very delicate process. Unemployment is low in much of the nation, or at least a lot lower than we have seen for a long time. But the process is uneven, bypassing rural areas and older workers unable or unwilling to essentially start over with entirely new careers.

Upsets like major storms are enough to put the whole process in jeopardy, especially when there are two right in a row. This should be the year when everything changes, but it hasn’t been working very well. A lack of leadership and a general sense of drift isn’t helping us take off. The storms? Big enough for a solid recession, without a doubt.

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Underground Economy

This is a repeat from 2013.  What’s amazing is that the Underground Economy, that part which is off the books, has not been studied properly for a solid five years.  It may still be 12% of GDP, but we don’t really know. 

It’s good to have a lot of money, assuming that not everyone has a lot.  Inequality is apparently bad when it gets too big, but it also makes the whole economy possible in small doses.  But how much money is really out there, and where is it going?  It turns out that this is more complicated – and hidden – than most thought.

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The Wealth of Nations

The rapid pace of change has created a world filled with excitement and energy. At the same time, it’s created a world filled with anxiety and fear. At the intersection of both of these is hatred, distrust, disrespect, and every other force you can think of which can divide people.  Rather than bring us together, closeness has us running to define boxes to hide in, regardless of how small.

The great force which should unite but instead often confuses and separates is the driving force of our time: technology. That one simple word is the savior and excuse all at the same time. But what is it, really?

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Yes, Not Again

In celebration of a decade of Barataria, I have to present another repeat.  This is from March 2008.  It’s an interesting time in that it was six months after the stock market peaked and six months before the financial collapse became obvious.  One of the great themes of Barataria since this time has been how we’ve seen it all before and we’re about to see it again.  The real story here isn’t that I called it at this time – it’s that so few people saw what was obvious as it happened around us.

Imagine that a new technology comes along that spawns a whole new industry. Not only is this industry a revolution in how people lead their lives, it’s immensely popular and generates a big pile of cash. The field starts out wide-open with many small entrepreneurs, but gradually they become rich as they are bought out by a few big players. Soon, the industry has consolidated and re-investment slows dramatically. Those who made big money start to put it into real estate, specifically in Midtown Manhattan, Florida, and Los Angeles.

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