Spotlight on Capitalism

The Failures of 21st Century Capitalism: “The Monopoly” and Debunking “Competition”

Clickford, Steven M.

Part of an ongoing series on questioning modern day capitalism policies

“Let’s Break Up Facebook like the Feds did to AT&T! We were so better off than having that pesky Ma Bell. So what if the markets would price them out? The free market failed anyways!” – Stereotypical American Consumer

 

 

The Too Big To Fail industry of Silicon Valley is going to pop and will most likely explode in the next several years. This industry began really around the time AT&T was broken up in the mid 1980s, and while many think the breakup of AT&T was a smart move, where is the same anger against companies like Alphabet’s Google, Amazon, Facebook, and other big companies?

Does anyone realize that Mark Zuckerberg feels like he’s richer than God or that he own platform acts a service to their own employees? How are employees there? Do they feel valued? Are they being abused or mistreated? Research shows that Millennials aren’t verse in retirement, how can they build that if the companies don’t support them? Where the hell is HR?

AT&T was not a perfect company but had good-faith intentions to serve the customer, and while older episodes of Saturday Night Live often mocked Ma Bell, if your internet goes down, whose going to come to your house on Christmas to restore it? Whose going to be there during a hurricane? Oh right, the techs insist to be like corporate employees so they can have all their time off when the people they claim they serve is entitled to have the same holidays like everyone else.

Nobody want’s to bust their ass anymore. I blame excessive capitalism. Things cheap, easy to purchase, easy to break, and whine about the quality and not following an age ol American norm of “personal responsibility” or “caveat emptor: let the buyer beware”. Sadly anyone trying to reason “the American Consumer”, will have no luck to teach them basic supply and demand and the cost of running a business without hoarding cash. The public believes acting like high school students hazing each other for your hard earned dollar is what kept this economy flowing. It’s not to say those enterprises were perfect or government intervention came in.

What drove AT&T’s prices down was unfortunately a system to make reliable telephones that one had to lease and rent, and in fact to keep maintaince cost down to those ol rotaries, was to make them bullet proof. Perhaps it was shady, but what was wrong with that? After some disruption via FCC policy, AT&T did get some competition. The phone service was so reliable, it was the envy of the world, people who made telephones and equipment had a job. It was made mostly in America. Where is that anger?

 

The Failures of 21st Century Capitalism: Living en Vida Puesta en Marcha Voca

Clickford, Steven M.

A series of a critical views on capitalism as this individual has followed more bull markets than bear markets, and would rather watch a stock ticker on cable news mixed with the juicy details of advancing vs declining stocks and knowing how many stocks hit annual highs and lows, where “going on your phone” requires reverting back to 1997 and going onto BigCharts to retrieve simple market information that no cable TV network cares to show screen anymore…

She’s into superstitions
Black cats and voodoo dolls
I feel a premonition
That girl’s gonna make me fall

She’s into new sensations
New kicks in the candlelight
She’s got a new addiction
For every day and night

She’ll make you take your clothes off and go dancing in the rain
She’ll make you live her crazy life, but she’ll take away your pain
Like a bullet to your brain, come on!

Ricky Martin, Partial lyrics of “Living A Vida Loca”

 

By the time said song was a hit, the dot-coms were on the up and up, “NASDAQ 10,000 by the end of 2000″…said the pundits! As a result of a backwards market beginning in the mid 1990s with the initial dot-com bubble, it began an avalanche of expectations a “company” is supposed to be after the 20th Century. Double-digit growth, ensure you got seed funding from the proper VC firms at the right time and like a good comedian, you time your offering at best market value like a good laugh. Years later, Silicon Valley was still Living the Crazy Life; it has lead into a really strange phenomena in the San Francisco Bay Area. In the last couple of years, the housing “demand” is so high, that one suburban house, a ranch, 1,000 sq ft; less than an acre property to be sold for literally a cool million. A house that burned down could be sold for that same amount of cash. Who in the hell could think a small plot of land could be priced so out of whack even for the largest metros in the country? Is there that many Steve Jobs out there with Reality Distortion Fields?

Heads of big VC firms are living a crazy and rich life too; with really out of whack economic views. And any startup that would compete against Facebook alike are probably falling through the cracks. Our employment numbers, to me needs to be seen in a skeptical lens. Are there people who have given up work? If so they are not counted. Has anyone that’s a normal minded person ever got through the first interview process at Google? Has anyone called out the discriminatory process at big tech companies they like to call “hiring seminars”? Has the industry listened to Bill Gates and the late Steve Jobs and only would hire “the great” people, which are one and a million, or even more? Has the industry written off people because they are not “good enough”? Why does an industry have to be so reliant on coding? Why are people not redefining a corporate monopoly that is far from what AT&T was 35 years ago – and why are people comparing the software and services of the IT sector to what was a “regulated monopoly” of the phone company?

Oh right, I shouldn’t be asking questions, I am supposed to jam like it’s 1999 and just sing some Ricky Martin to waive-off the concerns of this out of control marketplace.

This is where I feel “group-think”, the speaking the verses out of the political bible of libertarians, social liberal/limited government, as well as the extreme capitalists who perhaps pray to the Gordon Gecko character 30+ years later, as well as the highly technical people have taken over an economy based on philosophy and not on real-world, and concrete business practices or norms that was “it was always done that way” for generations, centuries and millennia before. I mean c’mon Alexander Graham Bell didn’t go to a VC firm to consider marketing his invention. Nor did Grey, Kellogg or Western Electric who then marketed his own invention.

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21st Century Capitalism: Those Damned Venture Capital Firms!

Clickford, Steven M.

Continued fact-finding search if a capitalistic America disappeared when Al Gore “invented the Internet”

It was the culture of consumerism, disposable income, and the legitimization of companies hoarding cash, and following an ethos of a fictional character in a 1987 flick, Wall Street, “greed, for a lack of a better word, is good”. A recession began a couple months before that movie’s release after Black Monday, where the Dow Industrials lost 22% on an intraday basis, and never saw record highs for at least a few years.

After nearly 6 years of growth, the markets were sputtering after October 1987. In July 1990, the Dow hit 3,000 via an intraday basis,  but to close past that mark, took till April of the following year! The tech industry was the worst hit, and in fact it began in the mid 1980s with the recession to the PC sector. This also stalled the growth of the Macintosh, as it broke even in 1987, 3 years after introduction. It wasn’t until 1995 where commercialization of the Internet, mixed with GUI computers like Windows based PCs and Macintoshes and standard networking equipment like Cisco, this lead to a big growth to only see it fall after the new Millennium – March of 2000.

The sector of the Information Superhighway was also legitimized capitalism but on an extreme level. Tech companies at this point weren’t “funded” by Midtown banks, but super rich firms out in the Valley called “venture capitalists”. This way of corporate financing again enabled competitive natures of businesses fighting their ideas into “profit”. For a number of years, many of the standing dot-coms didn’t return a “profit” or break-even on their bottom lines, or just their expenses. Cisco was turned down by every VC firm except for Don Valentine (a man not to write home much about.) In fact the couple who founded the Cisco used credit cards to use to build their hardware for a number of years.

Growth

Another failure of these go-go years, was the focus on “growth” and the redirecting of tolerance of risk, some companies ran themselves into the ground while “profitable” companies went defensive to protect the profits by taking risk aversive paths. At VC firms, later the Midtown banks were obsessed on “double-digit growth” originally quarter by quarter beginning in the mid 90s, than as the dot-com bubble burst, it was then annual and then the standards kept changing. Never in the history of Corporate America was there this amount of obsession to grow capital, to then accrued so much cash that so many have them hoarded in foreign accounts. Worse, is this “profit” that would originally be used to pay off debt that typically was the mainstream standard to Corporate America was completely written off by the time the new Millennium came.

The Fallout

As this obsession to the “growth sector”, this idea ultimately lead companies to have to reinstate their financials or go out of business and executives being thrown in jail, and creating an industry called corporate compliance to deal with the growing regulatory natures such as Sarbanes Oxley and Dodd-Frank law (now repealed by the Trump administration in the name of protecting “free markets”).

Another growing issue to our domestic economy is the ongoing issue of “late stage” companies that are going public on the markets later than other companies. Facebook was about to be a company of this class, but with some “shoplifting” of ideas stolen from Snap, and acquiring Instagram and WhatsApp, Facebook was able to evade from this stigma, leaving the company to be an ATM to the social media sector. Uber, Lyft and other companies who went public this year are facing issues keeping the stocks above their offering price because the demand was fading in the private markets. Going public turns these frozen assets into cold cash for anyone who invested early in these companies leaving Midtown banks and joe shomes being suckered as these investors are actually facilitating this transfer of wealth.

This lead into strange thing to occur in Northern California that the 80s or 90s couldn’t brag about.

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The Failures of 21st Century Capitalism: “The American Consumer”

Clickford, Steven M.1 Comment

In a series of posts, I really want to question our capitalistic system where it’s so top heavy to capitalism, that I like to present a honest account of what this very same system that is causing erratic economical discourse that no one who understands both the markets and the sectors that propelled a giantic bull market since the end of 1987. Also to debunk myths of monopoly and the sick delusion of “competition”. I am not a politically religious person, so I don’t believe in socialism, but I can also empathize the US enterprises that are big for a reason. In short, my view is America thrives better in a capitalistic system (meaning it favors business building, but it includes a rational view on taxation and regulations, and unlike socialism, the government shouldn’t be micro-managing the large enterprises.) Small businesses to me are dishonest, and some are are highly valued companies that didn’t scale corporate governance to the Fortune 500. (Yes I am talking about Facebook.)

I am putting a single trigger warning, if you can’t except a rational examination of our 21st Century economic system, then please avoid reading this, as you could be subjected to religious political philosophy, hearing the sermons of some “talking head” on two major cable channels that claim to be a cable “news” or “business news” operation that have Hollywood “searchlights” in their logo.

Is “The American Consumer” to blame?

The lowest level of this “free market” starts with the “consumer”, “end user”, “end customer”, etc.

Over time, pundits have tried to make America some figurative symbol, such as the “All American, Blond, Blue-Eyed” living in the deep south and listening so some country music. Another metaphoric stereotype of America is: The consumer. With a dollar in his pocket believing that if there are many choices in this country, it will drive costs down, and a dog-eat-dog culture amongst commerce will better help this American. The American consumer neglects to realize “companies” are mostly “brands” with products made in a single factory or a parent company that owns multiple “brands” but the consumer could care less because there is “more” on the shelf’; it’s “good”. It’s in reality bullshit and as a result we as a society have been brainwashed.

Let me tell you what kinds of options for say cloud services:

  • Microsoft’s One Drive
  • Google Drive
  • iCloud Drive
  • Maybe an AWS service.

Oooo choices, for real? What if one of these four consumer grade cloud services co-locate and sharing each other’s services? Where is that “choice”? And why are all these “brands” using the same noun? Google Maps, Apple Maps, Microsoft Maps (sorry fake business) Clickford Maps (opps, ditto!) So in real life: there are only two major brands to chose from? And what are the differences? They feel there’s a need to “look the same”…why not have a brand? Why even have a service? Why nix competition? Where’s the anger?

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