Thank You, America
Sometimes we make things more complicated than they need to be. When it comes to a discussion of the United States’ economic woes, there are a lot of ways to slice the cat. But perhaps the more academic discussions are unnecessary.
I’m an analytics junkie. When it comes to my websites, I look at everything. I’ve even been known to look through raw server logs.
Over the past several months, I couldn’t help but notice that my websites were still receiving visits from American companies that have received bailout funds. I had thought about writing a post on this but it wasn’t until last week when I saw a visit from General Motors that I decided I had to write this post.
Here’s the reason:
Click here to view the full image
That’s right, despite the fact that General Motors is on the brink of collapse, has lost over $30 billion in the past year, continues to lay workers off and is begging Congress for another go at the teat of Bailout Betty, a GM employee found the time to spend 31 minutes on one of my websites. A website that I can assure you is not contributing to General Motors’ recovery plans, let alone society at large.
“So what?” you might ask.
Sure, visiting a useless website I run for 31 minutes isn’t going to kill GM. But it’s emblematic of the American culture of wasted productivity. If my analytics data is any indication, there are a whole lot of people doing a whole lot of nothing when they go to work each day in the United States.
Including, as mentioned, GM’s bailout buddies. The following companies have also visited my websites, which includes The Drama 2.0 Show, over the past several months:
American Express Company
Bank of America
Capital One
City National Bank
Fifth Third Bank
First Citizens Bank
Goldman Sachs Company
Indymac Bank
JP Morgan Chase & Co.
Lehman Brothers Inc.
Merrill Lynch and Company Inc.
Morgan Stanley Group Inc.
Northeast Bank
Northern Trust Company
Ocean Bank
Pacific National Bank
PNC Bank
Provident Bank
State Street Bank and Trust Company
Washington Mutual Inc.
Wells Fargo & Company
Almost all have received TARP money (a few are no longer with us).
If employees at these companies can find time to visit my NSFW websites while their companies redefine failure, they’re certainly visiting other useless websites too. Which might, in some small way, explain why these companies need corporate welfare in the first place.
Back in 2005, it was estimated that American workers wasted more than 2 hours each day at work. The total estimated cost to employers was $759 billion, which, incidentally, is about equal to the total cost of Bailout #1.
So there’s some irony in the fact that employment in some American states now tops 10%. One might be inclined to ask a currently unemployed pencil pusher, “Why do you care so much about finding work? Clearly you didn’t feel like you had much to do anyway before you were laid off.”
Of course, I don’t mean to imply that every American is lazy. But at the same time, it’s hard to look at the structure of the American economy and American values as they relate to the type of work that is considered desirable and that which is considered menial and not conclude that, at the very worst, the United States (as a nation) acts entitled, and at the very best, has been spoiled.
The bottom line is that you’re not going to find a factory worker in China browsing the Internet. You’re not going to see a Chilean copper miner tweeting with his iPhone. You won’t meet a Romanian ship hand that spends 4 hours a day reading blogs. You aren’t going to find an African trucker blogging about his journey to transport goods through war-torn regions. These people are far too busy doing something productive, no matter how marginal it may seem to Americans who don’t get that it’s the producers and transporters who keep the cogs of the global economy moving on a daily basis.
For a moment, as I looked at my analytics I actually felt bad for Americans. As much I love traffic that I can monetize, making my websites available to useless employees at fucked companies feels a little like selling meth to someone with a mild case of Downs Syndrome. Not satisfying at all.
It’s so unsatisfying that I even considered blocking visits from people at companies receiving bailouts. I had planned to redirect them to a page encouraging them to get back to work. To be productive. You know, to send emails on their Blackberries or whatever it is that useless overpaid white collar assholes in the “service economy” are supposed to do.
But then I realized something. I’ve made lots of money shorting many of these companies over the past several months. The executives and employees who have been sucking the blood out of their own economy have been contributing to mine. And, in the overall scheme of things, I’m confident I can do more with what was once their money than they could.
So as the Dow falls below 7,000 today and I’m smiling at the profits on my open short positions, I have one message: thanks America. Keep doing what you’re doing.
It could reasonably be argued that spending a certain proportion of the day “slacking off” is important to long-term productivity, especially when working in a non-physical desk job.
I’m at work 8 hours a day, but I’m sure not producing code 8 hours a day. I have articles to read, table-tennis to play, tea to drink: and with these diversions as breaks between blocks of work I end up far more productive than I would be forcing myself to keep my head down from 9 til 5.
Will: I was going to write a longer response but I’ll keep it short and sweet. Where does the line between “balance” end and laziness begin?
I’m certainly not one to advocate an unsustainable workaholic lifestyle (I’ve noted in past posts that work-life balance is very important to productivity). But 30 minutes is 6.25% of an 8-hour workday. That’s 6.25% of an 8-hour workday wasted on a single website. And 2 hours a day? That’s 25% of an 8-hour workday – the equivalent of paying somebody $100,000 for $75,000 worth of work.
Frankly, if the average white-collar worker in the United States thinks office work is too demanding and needs a 15 minute break every 30 minutes, your country is in deeper shit than even I thought.
Wow, I’m surprised. I guess you’re one of those who also think it’s better for CEO’s and their 7-figure salaries to be sitting around in airports all day waiting to catch commercial flights.
I have no idea the particulars of the other people who visit your sites, so I’ll just speak for myself. I am one who will take a few minutes out at work to peruse blogs and maybe even fire off an occasional post to my own blogs. At the same time after I’m home and have had my supper I’ll think nothing of sitting down to a work project for a couple of hours. I get work email on my phone which is almost always with me and I will often respond to work emails whenever they come in. I don’t travle often, but when I do I’m at work tasks for all of my waking hours. I’m salary so I don’t get comp’ed for that. Basically, since I’m not married, don’t have kids (other than my two dogs) and love my job, I really don’t care that the lines between personal and work are blurry.
The thing is, there is a decent chunk of what I do that can be done anywhere, anytime. Spending the conventional 8-5 at the office, then, is to accomodate those who still think that if you aren’t sitting at your desk for eight daylight hours each day you aren’t giving a full day’s work. Truth be told, with the way I do things I work more hours and those hours are more productive than if my work were confined to only the time I spent sitting at my desk in my employer’s building. So, if anyone ever wants to count all the hours I say bring it on, and also put me back on the clock. I’d love to be drawing overtime.
Isn’t this why you put a person on salary to begin with – so everyone can quit wasting time watching the freaking clock and instead use performance and the accomplishment of objectives, things that are much more intrinsically linked to the organization accomplishing its objectives, as measuring sticks? I know that in my case if I weren’t putting in the expected amount of time and then some it would quickly become apparent in the fact that a lot of things wouldn’t be getting done.
Brian: kudos for doing your job. Unfortunately if all the quantitative data about how much time is being wasted by employees who surf the web at work is accurate, you’re the exception, not the rule.
Please also recognize that not everyone works in technology and not everyone is salaried.
Additionally, you shouldn’t assume that the average company keeps track of objectives or sets the right objectives. Just look around. What were Lehman’s objectives? What has GM been measuring? Results speak for themselves.
Have you seriously not heard of lunch breaks?
Anyone who can’t spare an hour in his day to eat his lunch and read the newspaper (or blogs, or whatever) is almost certainly slacking off the rest of the day. The same people who conspicuously spray crumbs over their monitor instead of getting some fresh air are the same people Alt-Tabbing in and out of Facebook the rest of the day. If you’re actually fascinated by your job enough to find it difficult to tear yourself away, well done; but you’re in the extreme minority.
As for your blue collar workers, well, no, they aren’t tweeting. They’re reading The Sun during the breaks guaranteed by their union, unless they work somewhere really hellish. (Romania and Chile don’t qualify, and your African truck driver stops when he feels like it. No-one demands maximum productivity from anyone travelling via African roads.) A good number will have longer time to “waste” than office workers, once you include official tea breaks.
There is a huge amount of productivity wasted in offices, but not because people are using 6.25% of an 8 hour workday to eat lunch. Actually, if I’d known that your Chilean shipbuilder had spent the entire second half of the day hungry and drowsy, I’d think twice about sailing in his ship.
Sam: that’s right. Everybody is limiting their browsing to lunch.
Unfortunately, if you actually read the results of the AOL study, you’d see that the two hour figure excludes lunch breaks. This is actual work time (not break time) wasted. 20% of a full work day. Shameless.
As for your comment about the hypothetical African truck driver, you’re clearly unfamiliar with the “transport” business in Africa.
Finally, when it comes down to it, maybe I’m wrong about the American work ethic. But by shorting some of your biggest companies, I’ve made a lot of money and I’ll always take being rich over being right.
Work ethic is beside the point, the damage was done when a lot of these people were actually working. Many financial companies made bad bets on very risky derivatives and loans. The American auto industry made plenty of SUV, that was difficult to sell when the cost of gasoline spiked. Now the credit crunch is hurting all car manufactures(foreign and domestic).AIG is burning money like it is excrement . If all these guys making risky bets and bad business decisions, got paid a couple of grand to sit down and do nothing, they would have lost significantly less money for their companies.
David O.: your understanding of the causes of the economic meltdown are simply wrong. The bad decisions and malinvestments you refer to were largely the result of government intervention.
This is true in the financial industry, where you had the Federal Reserve artificially lowering the cost of money (fueling asset bubbles) and the federal government implicitly guaranteeing the bailout of large financial institutions through a number of ill-conceived policies, including those related to Fannie and Freddie.
The government also hurt the auto industry. Case in point: in a recent post I discussed the offsets the government provided to the US automakers for producing Flex Fuel vehicles. This allowed them to meet their minimum fleet fuel efficiency standards despite the fact that, without the ill-conceived offsets that were based on delusional assumptions, they wouldn’t have.
Were the people at the top of your failing companies incompetent? It depends on how you define incompetence. They certainly made logical malinvestments because misguided and meddling government gave them the ability to.
If your daddy wrote you a blank check, always bailed you out of jail and made sure the most punishment you would ever receive is a slap on the wrist, how would you act? If you don’t have consequences, you don’t manage risk. That’s human nature in my opinion, not incompetence.
As for work ethic, my observations are my observations (I’ve spent quite a bit of time in the US) and I don’t think the bill of goods American youth are sold from day one (go to college, get a degree, get a high-paying job in the “service economy”, shuffle money around, ?, profit) produces realistic, hard-working employees in the industries that produce real wealth by producing real goods.
I’m German; I can’t get involved in this conversation
There are always consequences in this world, it is the incompetent who believes there are no consequences. The kids who believe their parents can always clean up their mess will one day discover that’s not possible. If the corporate world think the government can always bail them out they are in for a rude awaking. Already, many people in financial lost their job because their companies did not manage risk.
David O.: you miss the distinction between the people at the top and the rank and file.
The guys who were running the show and knew that they had implicit bailout agreements from the government have walked away with millions upon millions of dollars in compensation and bonuses. That’s not incompetence. These crooks may have been reckless but that was natural since they knew that their gains were private and their inevitable loses would be public. The entire Federal Reserve banking system was set up to accomplish this. Most Americans didn’t know that and most still don’t.
The average investment banker may have been naive and/or greedy, but few of them went to work every morning believing that they were sowing the seeds of collapse. Notions that this was the case are populist rhetoric for the dumb and blind.
In all of this, it’s the taxpayers who got the short end of the stick. That’s what happens when the hens hire foxes to guard their hen houses.
In America , if you watch business news and even CNN, you will know this. Not only do we know the names but sometimes faces of these people who walked away with millions in compensation. We also know that some of them are still on the job. But we are talking about both the rank and file and the people at the top. It usually takes longer for the people at the top to reap the consequences of their actions.
http://www.yahoo.com/s/1039325
The above links highlight the point you were making about government interference, but it also clearly shows that not all banks in the us engaged in bad investments because the government is there to bail them out. That’s all folks.
David: I’m afraid you still don’t understand.
Nobody ever said that all banks were engaged in massive malinvestment. They weren’t.
If you want to have an educated discussion, you need to understand the origins of the Federal Reserve system.
It was designed by the most powerful bankers for the most powerful bankers.
As Edward Griffin wrote in The Creature from Jekyll Island, one of the primary purposes of the Federal Reserve was to “involve the federal government as an agent shifting the inevitable losses from the owners of those banks to the taxpayers” in times of financial disturbance.
In the Panic of 1907, there was no central bank to inject liquidity into the market. Interestingly, the economy of the United States was not weak; the financial system was.
The banks had taken their fractional reserve lending too far and when there was a crisis of confidence and a run on the banks, they were caught with their pants down. JP Morgan personally intervened to deal with the crisis, putting his own money on the table and getting other bankers and private interests to do the same. It eventually saved the system from collapsing.
Obviously, that wasn’t something they liked doing. When Morgan and other major bankers (including the brainchild of the Federal Reserve, Loeb) met on Jekyll Island, the purpose was to ensure that they wouldn’t have to do this again.
They got what they wanted. The Federal Reserve Act provided an implicit bailout agreement. Incidentally, it also paved the way for the major banks to keep smaller competitors at bay, which one might argue paved the way for the “too big to fail” system that currently exists.
This your blog and I respect you but there is no need to have a condescending tone in this discussion. You are wrong about my understanding. I’m aware of the history of the Federal Reserve.
But here is my point,
You basically compared these men to Paris Hilton
“If your daddy wrote you a blank check, always bailed you out of jail and made sure the most punishment you would ever receive is a slap on the wrist, how would you act?”
Paris Hilton finally did spend some time in jail and she hated it.
There are always consequences for our actions.
Is it reasonable to conclude that grown men behaving like spoiled children are intelligent ?
You even hesitantly admitted to this:
“The average investment banker may have been naive and/or greedy”
Naive ? it’s just another word for ignorant
“but few of them went to work every morning believing that they were sowing the seeds of collapse.”
Of course they did not know, don’t expect the naive to figure this out. Guys like Peter Schiff knew, guys like Jeff Greene who shorted sub prime, knew.
http://www.cnbc.com/id/23407363/site/14081545 -about Jeff Greene
The difference here is Peter and Jeff are smart and they are, well, not so smart.
David O: I appreciate your readership but I am who I am. If I’m abrasive or condescending at times, that’s who I am. For better or worse.
A lot of people knew about the perilous state of the US economy. I knew. You can go back and read some of my comments on the matter.
I’ve made a lot of money shorting the market (I opened long-term short positions in my personal account in early 2008).
But you still miss the point, which is quite simply that Wall Street has always understood that the government would bail it out. The government reminded everyone on Wall Street of that when Long Term Capital Management was bailed out by the New York Fed in 1998.
Do you really believe that this went unnoticed by executives and managers on Wall Street?
The bottom line: it has never been a secret to the people who run Wall Street that their gains were private and their inevitable losses would be public.
As for Peter Schiff, I like the guy and he was right about many of the mechanisms of this collapse (I’ve mentioned him in past posts) but he was dead wrong about oil and foreign currency (he continues to be long both). So he hasn’t made any money on the collapse he predicted because the losses on oil and foreign currency have offset the gains he did predict in gold.
I think there’s a real chance the US will eventually default on its debt but I’ve caught a decent part of the dollar rally. Why would I buy dollars and sell foreign currency when I think the US economy is going to hell? The charts told me to and I know that markets can remain irrational longer than men can stay solvent.
Again, it’s not about being right, it’s about becoming rich. The people who ran these banks into the ground did wrong but they’re walking away with a lot of money. And a lot of people who were right about the inevitability of collapse didn’t make a cent of profit from it.
Every action always has a consequence. Unfortunately the truth of the matter is that those consequences aren’t always what we’d like them to be. They’re not always just.
I’ll end my involvement in this discussion with the observation that consequences and karma are two separate things. You should consider that there’s a distinction.