Category Archives: Finance

CAPITALISM’S DEATH IS GREATLY EXAGGERATED

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Shared by Syed Ehtisham
Late last week, economic journalist Paul Mason, whose Channel 4 blog has been one of the best English-language sources for making sense of the ongoing Greek crisis, published an excerpt from his forthcoming book in The Guardian. It announces that the end of capitalism has begun and that (spoiler) it doesn’t look how we thought it might. The 20th century old/new leftist dream of some crisis-sparked proletarian revolt, he argues, has been battered by neoliberalism and, now, is being replaced by a steady trickle of viable, largely technology-fuelled alternatives to the current economy. “Capitalism, it turns out, will not be abolished by forced-march techniques,” Mason writes. “It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviors.”
He contends that advances in information technology have “reduced the need for work, blurred the edges of work and free time and loosened the relationship between work and wages.” Stemming from the Wages for Housework campaign of the 1970s, feminist movements and scholars have for years highlighted the loose connection between work and pay, along with the blurry line between labor and leisure at home and in the workplace. And, as Doug Henwood rightly pointed out, there’s nothing inherent to technological innovation that means less work, especially for the market’s worst-off; in the last several years, the American economy has actually become more productive (that is, labor intensive) relative to GDP. To date, automation hasn’t so much reduced the need for jobs as it has expanded capitalism’s capacity to create more terrible ones.
Clearly, though, the economy is changing. For Mason, there are a few other factors driving this transition: an influx of abundant information at odds with capitalism’s drive to hoard scarce resources; the rise of “spontaneous production … that no longer respond[s] to the dictates of the market and the managerial hierarchy,” like Wikipedia; and, finally, the growth of alternative economic practices in the face of crisis — food co-ops, time banks, parallel currencies and other measures falling broadly under the umbrella of “free time, networked activity and free stuff.”
As austerity wears at its seams in southern Europe, all of the above are disrupting what Mason calls a “fifth long upswing for capitalism,” differentiated from the previous four by a lack of pressure from the workforce to herald in higher wages, new technology and more consumption. Increasingly, networks are replacing hierarchies and we’re all learning to share more, in cyber and real-space. In their beautiful abundance, these social and actual technologies chafe at ownership; influenced by technology, in turn, there is a new engine of change replacing the industrial worker: “the educated and connected human being.” Information technology and the networked social forms accompanying it are non-capitalist beasts just waiting to be let out of their stables to race toward a post-capitalist future.

Ripping Off Young America: The College-Loan Scandal

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Ripping Off Young America: The College-Loan Scandal

The federal government has made it easier than ever to borrow money for higher education – saddling a generation with crushing debts and inflating a bubble that could bring down the economy

August 15, 2013 10:45 AM ET
student loans
Illustration by Victor Juhasz

On May 31st, president Barack Obama strolled into the bright sunlight of the Rose Garden, covered from head to toe in the slime and ooze of the Benghazi and IRS scandals. In a Karl Rove-ian masterstroke, he simply pretended they weren’t there and changed the subject.

More Taibbi: The Last Mystery of the Financial Crisis

The topic? Student loans. Unless Congress took action soon, he warned, the relatively low 3.4 percent interest rates on key federal student loans would double. Obama knew the Republicans would make a scene over extending the subsidized loan program, and that he could corner them into looking like obstructionist meanies out to snatch the lollipop of higher education from America’s youth. “We cannot price the middle class or folks who are willing to work hard to get into the middle class,” he said sternly, “out of a college education.”

http://www.rollingstone.com/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815

 

Education & New Skills Is No Guarantee For Job In Future

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A worth reading article by Paul Krugman in NYT. He writes;

Today, however, a much darker picture of the effects of technology on labor is emerging. In this picture, highly educated workers are as likely as less educated workers to find themselves displaced and devalued, and pushing for more education may create as many problems as it solves.

I’ve noted before that the nature of rising inequality in America changed around 2000. Until then, it was all about worker versus worker; the distribution of income between labor and capital — between wages and profits, if you like — had been stable for decades. Since then, however, labor’s share of the pie has fallen sharply. As it turns out, this is not a uniquely American phenomenon. A new report from the International Labor Organization points out that the same thing has been happening in many other countries, which is what you’d expect to see if global technological trends were turning against workers.

And some of those turns may well be sudden. The McKinsey Global Institute recently released a report on a dozen major new technologies that it considers likely to be “disruptive,” upsetting existing market and social arrangements. Even a quick scan of the report’s list suggests that some of the victims of disruption will be workers who are currently considered highly skilled, and who invested a lot of time and money in acquiring those skills. For example, the report suggests that we’re going to be seeing a lot of “automation of knowledge work,” with software doing things that used to require college graduates. Advanced robotics could further diminish employment in manufacturing, but it could also replace some medical professionals.

Click Link below to read article;

http://www.nytimes.com/2013/06/14/opinion/krugman-sympathy-for-the-luddites.html?ref=opinion

Posted By F. Sheikh

Rajat Gupta’s Lust for Zeros

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By Anita Raghavan in NYT

Rajat Gupta

It is worth reading saga of Gupta and Rajaratnam , two highly achieved and high-profile Wall Street Gurus of Indian descent,  who were seduced by high society and greed and were recently convicted of insider trading.

“Gupta embodied the generation of Indians that the academic Vijay Prashad has called the “twice blessed” — those who benefited from both India’s independence in 1947 and the 1965 overturning of a United States law that had restricted Indian immigration to 100 people each year. Gupta was a boy in the 1950s, when the Indian Institutes of Technology were established to produce a new generation of engineers. After earning degrees from I.I.T. Delhi and Harvard Business School, he received a job offer at McKinsey during the rise of the corporate consulting industry. In 1994, when Gupta was only 45, he became the first Indian C.E.O. of a major American company. He “pioneered a new way of leveraging the firm’s intellectual capital,” recalls Jeffrey Skilling, his colleague from 1979 to 1990, who later went on to become the chief executive of Enron. “I think Rajat was a shoo-in for election to managing director, and frankly I don’t think anyone had a chance against him. He was that good,” wrote Skilling in an e-mail from federal prison in Littleton, Colo., where he is serving a 24-year sentence for his role in Enron’s collapse.”

In the paragraph below an interesting insight and caution by Gupta on love and seduction of money;

“Speaking at Columbia University around this time, Gupta reflected on his new ambition. “When I look at myself, yeah, I am driven by money,” he said. “And when I live in this society, you know, you do get fairly materialistic, so I look at that. I am disappointed. I am probably more materialistic today than I was before, and I think money is very seductive.” He continued: “You have to watch out for it, because the more you have it, you get used to comforts, and you get used to, you know, big houses and vacation homes and going and doing whatever you want, and so it is very seductive. However much you say that you will not fall into the trap of it, you do fall into the trap of it.”

“While Gupta departed McKinsey with a fortune, he was now mingling with a crowd that included Bill Gates, Henry Kravis and Henry M. Paulson Jr., then Goldman’s chief executive, with whom he traveled to Indonesia to see the Komodo dragons. For many of these men, $100 million was not rich; it was simply the price to play. If Gupta wanted to compete on the same level as Stephen A. Schwarzman, who would go on to give $100 million to the New York Public Library, or Sandy Weill, whom he knew from the Weill Cornell Medical College board, he had to be a billionaire.”

“Rajaratnam was also an expert at preying on his sources’ weaknesses. His first major target was an Intel marketing executive named Roomy Khan. He caught her attention by mentioning that his wife, Asha, was a Punjabi Indian, like her. Then he reeled her in by promising a well-paying job at Galleon in return for early readings of revenue indicators at Intel and, later, tips about acquisitions, like the Blackstone Group’s bid to buy Hilton Hotels. (She found out about the latter from a South Asian Moody’s analyst, a roommate of her cousin’s.) Rajaratnam also persuaded his old Wharton School classmate Rajiv Goel, a perennially frustrated executive at Intel’s treasury department, to feed him information in exchange for introductions to his high-powered friends. Rajaratnam’s most prized recruit, however, was Anil Kumar, a former classmate from Wharton and a graduate of the I.I.T. system who worked as a technology consultant at McKinsey.” Click Link for full article;

http://www.nytimes.com/2013/05/19/magazine/rajat-guptas-lust-for-zeros.html?pagewanted=1&hp

Posted By F. Sheikh