The Luddites Were Right (or Left?)

Eventually, the mainstream pundits figure it out, and write up a nicely remunerated piece for a nicely priced organ. Imagine my delight, tinged with massive envy, at the sight of the headline "How Technology Wrecks the Middle Class". The piece is written by a pair of saltwater (well, at least half) economists.

Are we in danger of losing the "race against the machine," as the M.I.T. scholars Erik Brynjolfsson and Andrew McAfee argue in a recent book? Are we becoming enslaved to our "robot overlords," as the journalist Kevin Drum warned in Mother Jones? Do "smart machines" threaten us with "long-term misery," as the economists Jeffrey D. Sachs and Laurence J. Kotlikoff prophesied earlier this year? Have we reached "the end of labor," as Noah Smith laments in The Atlantic?

(There are links in the on-line version.)

It's an interesting history, but misses out the key point: one might argue that the value judgment can be ignored if the newly invented job types outnumber the destroyed jobs. They simply don't get to the point, which is that replacing 10,000 manual-ish jobs with 1,000 high-level jobs isn't a net positive. Instead, they finesse with this,

In 1900, for example, 41 percent of the United States work force was in agriculture. By 2000, that share had fallen to 2 percent
...
In 1900, no one could foresee that a century later, health care, finance, information technology, consumer electronics, hospitality, leisure and entertainment would employ far more workers than agriculture.

In contrast, this paper says (page 19)

The relative importance of on-farm technology, pushing labor off the farm, versus off-farm technology, pulling it, remains a matter for conjecture, but clearly both forces were at work along with other economy-wide changes.

But, of course, the real question is whether those job types employ as much of the working population now, on a relative measure, as agriculture did in 1900. I don't find a cite on point, but I doubt it. Moreover, there's that sticky question of whether an economy skewed toward non-productive activities (as much of that list is) is sustainable. So long as the USofA can control exchange rates (i.e., the US dollar is "new gold"), likely so. In 1973, when the Arabs/OPEC flexed their muscle and asserted the existence of petro-dollars, not so much.

Logically, computerization has reduced the demand for these jobs, but it has boosted demand for workers who perform "nonroutine" tasks that complement the automated activities. Those tasks happen to lie on opposite ends of the occupational skill distribution.

As with this assertion for all time, it's a reassuring platitude, but is meaningless without the numbers. Unless the "nonroutine" jobs add up to at least as many as those made redundant, the downward spiral continues. It is often said that, in the USofA, the mechanization of agriculture "freed up" labor to feed the demand for the likes of Henry Ford's assembly lines, well that was a case where one sector's labor could move without much more than the cost of physically moving to another sector's employment. Not even these economists has the temerity to suggest such is going on today.

The problem remains diminished demand, which is driven by diminishing moolah in the hands of those (who were) in the middle. These authors offer neither historical evidence that the demand problem will work itself out organically and happily, or a prescription for changing the rules in order to reach a happy ending.

The good news, however, is that middle-education, middle-wage jobs are not slated to disappear completely. While many middle-skill jobs are susceptible to automation, others demand a mixture of tasks that take advantage of human flexibility. To take one prominent example, medical paraprofessional jobs -- radiology technician, phlebotomist, nurse technician -- are a rapidly growing category of relatively well-paid, middle-skill occupations.

[my emphasis]

These are by no means, alas, alone among the mainstream who assume that today looks pretty much like yesterday, and tomorrow will look pretty much like today. Of course, the Right Wingnuts importantly are attempting to put an end to anything health related. And they don't cite any data that these middle jobs are, in fact, (and will continue to be) firmly in the disappearing middle class. So, the growth sectors for employment are exactly those professions in the sniper sights. What's the matter with this picture?

Following this logic, we predict that the middle-skill jobs that survive will combine routine technical tasks with abstract and manual tasks in which workers have a comparative advantage -- interpersonal interaction, adaptability and problem-solving.

Note, the authors don't say "middle class income".

Which brings us to the crux of the problem, "What Is Economics Good For?". So, I'll start with the punchline (and tie-in to the previous piece):

What made Ben S. Bernanke, the current chairman, successful was his willingness to use methods -- like "quantitative easing," buying bonds to lower long-term interest rates -- that demanded a feeling for the economy, one that mere rational-expectations macroeconomics would have denied him.

Doesn't that sound like the middle-level decision making that is the future? He does make a wage which would skew the distribution, though.

Ben notwithstanding, the piece takes on the notion, rampant since the late 1960's, that economics is somehow scientific. I can't point to a specific date or publication when it happened, but political economics dropped its adjective. Samuelson is as much responsible for that as anyone. Solow, too. The triumph of macro as just aggregate micro, which led to the collapse of the study. But no longer using the adjective doesn't mean that said adjective no longer applies. Far from it.

The trouble with economics is that it lacks the most important of science's characteristics -- a record of improvement in predictive range and accuracy.

Not really; economics is more interested in moving future history in some direction, rather than arriving at some objective prediction. The physicist, generally, doesn't care who wins; that's the essence of science. The economist *only* cares who wins, his side.

In a somewhat limp defense: macro-economics (which is the version on examination here) is dependent on others for its data, and most of that is sampling data, and provided by not-so-permanently-funded programs of central governments. Captains of industry aren't so interested in good data, since such data will expose the nasty skewing in income/wealth over the last few decades. It's not in the self-interest of the winning few for the losing many to know how, and how badly, they've lost.

But economics has never been able to show the record of improvement in predictive successes that physical science has shown through its use of harmless idealizations. In fact, when it comes to economic theory's track record, there isn't much predictive success to speak of at all.

[emphasis mine]

Again, of course not. There is no accepted 'economic theory' in the sense of Newton's Laws universally accepted (modulo relativity and quantum mechanics), just warring factions with agendas. On the one hand, we have economic mouthpieces for the corporations, particularly banks and the rest of financial services. On the other, we have the divisive rancor in the academic setting betwixt the Freshwater economists (running dogs for the corporations who fund them) and the Saltwater economists. At one time there was a thriving sub-genre known as Labour Economics, but not so much today.

Both sides just make up press releases to advance the liege's agenda. Predicting how the 'machine' will turn over the next period isn't the point; shifting the dials on the machine to get it to turn to the advantage of those paying the piper's tune is. The rest is just hand waving.

The authors do throw a sop,

Readers of Paul Krugman and other like-minded commentators are familiar with their repeated complaints about the refusal of economists to revise their theories in the face of recalcitrant facts. Philosophers of science are puzzled by the same question. What is economics up to if it isn't interested enough in predictive success to adjust its theories the way a science does when its predictions go wrong?

The answer, of course, is that economics, in spite of adopting a cloak of science, remains political economics. And political is vastly more about concentrating wealth these days then at any time since the end of WWII. You can take that to the bank.

You Can Quote Me

Today brings a couple of juicy observations, which have been added to the Sigs/Quotes larder.

From his column today (I continue to fault him for not discussing why people continue to plunge):

In short, the main lesson of this age of bubbles -- a lesson that India, Brazil, and others are learning once again -- is that when the financial industry is set loose to do its thing, it lurches from crisis to crisis.
-- Paul Krugman/2013


And this on the NASDAQ fart:

You have a very Rube Goldberg [computer trading] system. We've just put patches on it without attacking the basic problems.
-- Gene Noser, co-founder of the brokerage firm Abel/Noser/2013

A Fish Out of Water

Robert Shiller is, at least by topography, a saltwater economist, being at Yale and all. And from most of his writings, as well. Today he seems to have gone all Social Darwinist! He recounts how he and his colleagues "innovated" some real estate indexes, and thus continued the march of capitalist innovation.

I beg to differ. In a piece from last year is a reference to some analysis of invention/innovation in the West over the last century or so. On the whole, as outlined in that piece, the pace of real invention has slowed dramatically due to the simple fact that we, as a species (at least as expressed in our scientists and engineers), have figured out 99.9% of what there is to know about the planet and universe. The Great Inventions were driven by new discoveries of the physical world, prime among them: the periodic table. Once you know what the elements are (by about 1937 the natural elements were cataloged), and the Bohr model (1913), putting them together in required ways is a series of engineering exercises.

Thus we see the rise of Intellectual Property, as a way to segregate wealth based on algorithms since we're no longer capable of finding new physical entities. As the founders knew, a society can't survive as a democracy if individuals (human or corporate) can sequester bits of math and charge a fee to implement them. Shiller did that, and got away with it. Shiller quotes a study, which itself quotes a McKinsey (about as right wing a consultancy as exists) study:

... in free-market capitalism, "from 10,000 business ideas, 1,000 firms are founded, 100 receive venture capital, 20 go on to raise capital in an initial public offering, and two become market leaders."

First, there's no meaningful free-market in the USofA. Second, the purpose of innovation isn't to make two folks really rich at the expense of the rest of the economy; it's to foster further development and provide better living for the society. Patents, now the bane of capitalism of the sort propounded by Dr. Shiller, were explicitly time limited by the founders. Owners manipulated Congress to increase the length of "protection" afforded by patents and copyrights over the years. Mickey Mouse is owned by Disney essentially in perpetuity. Apple, at least, may not be able to enforce its patent on rounded cornered rectangle. Phew!

Is this merely descriptive, or prescriptive? Is Shiller making a case for a winner-take-all economy? For an economy where 1 in 5,000 wins, and 4,999 lose? Ayn Rand would be proud, I suppose. But it's hardly an economic structure which is sustainable. Does he realize that Edison, the exemplar of the lone inventor had, for some period of time, 5,000 employees? And that, just as corporations do today, took for his name all inventions? And that Edison attempted to monopolize electrical transmission? And so on.

To start at the beginning of his piece:

CAPITALISM is culture. To sustain it, laws and institutions are important, but the more fundamental role is played by the basic human spirit of independence and initiative.

Ah, the myth of the lone inventor toiling away in his (not likely a her) garret. Not. While it is possible for a lone coder to dream up some index on a PC, real innovation these days is coming out of those behemoth corporations by salarymen. The notion that Facebook, or some real estate index which led to the Great Recession, is the sort of activity we should emulate is folly. Having friends, or data telling you that houses are wealth rockets, isn't quite the same as building a better mousetrap. Moreover, Shiller recounts his travails in 1991. Bollocks. In today's world, hardware and software needed to implement something along those lines can be had for less than $10,000. Getting the raw data is a different matter; I don't know how that part works. But the raw data isn't, and can't be, the crux of the innovation.

I do wonder, though, whether Shiller sees the irony of claiming innovation for what he did with real estate price indexing, and what others did with real estate price indexing? I mean, isn't he just as responsible for The Great Recession? He planted the seed of the flow of "innovation" (and the finance types crowed loudly that what they were doing was "innovative", no lie) which propelled us to the crash. I wonder? Has Shiller been a true Job Creator? Depends. His various companies may have been staffed, but did such staff, if any, simply move from similar positions with similar analytics' firms? How many analysts/clerks/etc. in financial firms were made redundant when they were replaced with his company's reports and data? IOW, do his companies (and all similar) actually grow the macro-economy on net, or just re-arrange the deck chairs?

Shiller, apparently without knowing it, makes Huebner's case: real world innovation has slowed to a crawl because there are few, if any, mysteries left in the real world. We turn to monetizing pictures of dancing cats and real estate indexes because we simply have nothing better to do with our time. Yikes, if I may say so. The world my grandfather was born into in 1887, in Saratoga Springs, morphed by orders of magnitude by the time he died in 1967. The same won't be true of those born in 1937. What of today's life? Radio, check. Telephone, check. Automobile, check. TV, check (yes, look it up). Airplanes, check. Rockets, check (yes again, people in them came later, of course). Nuclear age, check (implementation was an engineering exercise). Semiconductors, check (really, it wasn't Shockley).

Lasers, new (but just barely, the science predates 1937). And a few more, I suppose. But all based on science that was established. What new science has there been since 1937? And I mean NEW, not just ever more honing of existing. So, folks turn to maths, and try to sequester algorithms. Very naughty. Pythagoras' many progeny would each live very well today with the rules coders are attempting to enforce. Just imagine: a penny for each time the Theorem is implemented each day, world wide. Dat's alotta moolah.

Which brings us to the other side of the coin, Big Data. Once again, the mainstream pundits have finally caught up with me. They don't send a check, though. Here we see Shiller's notion of innovation being revealed as that man behind the curtain; a blowhard fraud. Not that I haven't been singing that tune for some time, of course.

Data is good, "Have SQL/R, Will Travel" is my motto. But, as the mainstream is now figuring out, digging in Big Data means that the needles found must be really precious needles for the exercise to be worthwhile. Not so much. Reality bites.

Christened by the World Economic Forum as "the new oil" and "a new asset class," these vast loads of data have been likened to transformative innovations like the steam locomotive, electricity grids, steel, air-conditioning and the radio.

Riiiiiiiight!! A pile of dung, with an undigested diamond somewhere encased. This is stuff NSA is mucking through. Your tax dollars at work.

The rate of productivity growth, whose steady rise from the 1970s well into the 2000s has been credited to earlier phases in the computer and Internet revolutions, has actually fallen. The overall economic trends are complex, but an argument could be made that the slowdown began around 2005 -- just when Big Data began to make its appearance.

Where's my pet rock? It's around here someplace.

As mentioned before, studies done years ago determined that "office productivity" suites led to lower productivity in offices. This is particularly true of Word style GUI applications, since so much time and energy is easily siphoned off into "pretty printing" rather than analytic thought. Why work when you can play?

One theory holds that the Big Data industry is thriving more by cannibalizing existing businesses in the competition for customers than by creating fundamentally new opportunities.

Et tu, Shiller? Just as Google siphoned off adverts from newspapers, killing same, so some other vehicle will siphon off adverts from casual search. Basing one's business on advert payments is really risky; your product is ephemeral and not even, so to say, yours.

Robert J. Gordon puts the wooden stake through the heart (you've read this before, here):

Robert J. Gordon, a professor of economics at Northwestern University, said comparing Big Data to oil was promotional nonsense. "Gasoline made from oil made possible a transportation revolution as cars replaced horses and as commercial air transportation replaced railroads," he said. "If anybody thinks that personal data are comparable to real oil and real vehicles, they don't appreciate the realities of the last century."

Die Dracula, die!!

The commercial use of Big Data appears to be mostly in service to marketing and advertising, which are, by definition, non-productive activities. Non- is not the same as un-, but isn't easily defended as an increase in an economy's output. To the extent that such use creates *new* monetary demand for related goods and services, then yes. But it's a slippery slope to count these activities equivalent to motor car production, for instance. (Aside: the same nexus occurs with gambling casinos; put one in your state, and the only way to have a net gain is to entice over-the-border gamblers, *new* monetary demand, otherwise it's just your citizens shifting $$$ from movies to craps.)

Cat videos and television programs on Hulu, for example, produce pleasure for Web surfers -- so shouldn't economists find a way to value such intangible activity, whether or not it moves the needle of the gross domestic product?

Not only NO, but HELL NO (expurgated that for those with tender mercies). BLS did so, to some extent alas, with the revision to the National Income accounts. They ain't both apples.

Staying on this path will turn the USofA into a Bermuda from sea to shining sea.

According to the BEA as a percent of GDP:
Manufacturing, 1950: 27%
Manufacturing, 2012: 12%

Again, one can play ostrich and stick one's head in the sand and assert that all is well, and things are going as planned. May be not.

Gluttony

One of the minor themes of these endeavors is that, as physical capital (which is the only version which is actually productive, let the flames begin) is assigned to "tech" sectors (as opposed to legacy uses, such as steel mills and other stable technologies), we find that payback periods shorten rapidly. The inverse, of course, is lower real return on such capital. The implication of this, of course, is that the interest rate which can be supported by the macro-economy must fall. Ultimately, fiduciary interest can only be paid out of increase in real production in an at least stable macro-economy. Otherwise, it's a zero sum game, and consumption must fall, further diminishing output and thus returns to said capital. A death spiral, so to speak.

But I've not found much hard (ish) data. Until now. This JP Morgan report, a puff piece labeled "For Institutional and professional investor Use Only | Not For retail use or Distribution" (who'd a thunk it?) makes the following observation (page 9):

Nominal U.S. equity returns of 8% equate to average annual real returns of 5.25%, after subtracting our core inflation estimate. While at first blush those real returns appear rich, they are below the historical long-term average of 6.2% dating back to 1850, a stretch that includes a mix of bull and bear markets, and takes in two world wars, the Great Depression and a secular bear market (see Exhibit 4B).

Now equity returns, as used by Morgan, aren't directly return on real investment, but on stock shares. But close enough for my purposes. The balance of the report is an ad for JP Morgan "services" so I'm not inclined to buy their doom and gloom. On the other hand, when paybacks shorten, the only way to counter that is to monopolize, and we see that in tech.

The Wiki quotes Greenspan:

Alan Greenspan testifying at the Financial Crisis Inquiry Commission in 2010 explained, "Whether it was a glut of excess intended saving, or a shortfall of investment intentions, the result was the same: a fall in global real long-term interest rates and their associated capitalization rates. Asset prices, particularly house prices, in nearly two dozen countries accordingly moved dramatically higher. U.S. house price gains were high by historical standards but no more than average compared to other countries." [my emphasis]

So, has the GPoM been soaked up? Or is it still out there?

In their July 2012 report Standard and Poors described the "fragile equilibrium that currently exists in the global corporate credit landscape." U.S. nonfinancial corporate sector NFCS firms continued to hoard a "record amount of cash" with large profitable investment-grade companies and technology and health care industries (with significant amounts of cash overseas), holding most of the wealth.

By January 2013, NFCS firms in Europe had over 1 trillion euros of cash on their balance sheets, a record high in nominal terms.

Yes, yes it is.

All Hail, The Job Creators

So, here's what the job creators are doing with all that moolah, courtesy of Bernanke and QE:

7:02PM Boston Scientific prices $1.05 bln of senior notes (BSX) 11.32 +0.21 : Co announces the pricing of a public offering of $1.05 billion aggregate principal amount of its senior notes under the company's shelf registration statement. The public offering consists of $600 million of 2.650% notes due October 1, 2018 and $450 million of 4.125% notes due October 1, 2023. The company expects to receive the net offering proceeds upon closing on August 13, 2013, subject to customary closing conditions. Boston Scientific intends to use the net proceeds from the offering, together with borrowings under its recent $400 million term loan facility, to redeem all or a portion of its (i) 5.450% notes due June 15, 2014, of which $600 million aggregate principal amount was outstanding as of the date hereof, and (ii) 4.500% notes due January 15, 2015, of which $850 million aggregate principal amount was outstanding as of the date hereof, and to pay related fees, expenses and premiums. Any such redemption would be made in accordance with the terms of the applicable indenture, including provision of the required notice of redemption. Any remaining net proceeds from the offering may be used for general corporate purposes.

They're swapping debt for cheaper debt. Not hiring anyone, of course. That costs money. We should be so grateful to the job creators.

A Quantity of Health [update]

More than a year ago, I made the point that even the 1% will need Obamacare, in due course. As most regular reader knows, quants earn their livings in various ways. In the private, for profit, world that usually means coercing the naive' into spending money on widgets they wouldn't have done save for the exercise of the quants' magic. All those ads and "suggested" products are mined from user data. The term usually applied to this endeavor is "market segmentation". When used to entice an RC Cola buyer to also buy Moon Pies, no harm done (well, to the extent that later diabetes can be disavowed).

Anyway, as in the prior essay, buying insurance (health or auto or home) isn't the same as buying that box of Twinkies or an iPhone. You're not buying a "thing" to consume. Well, so long as you're not a Right Wingnut with a warped sense of consumption. Buying insurance is paying into a pool of shared risk. The more who share in the risk, the lower the cost to all. Well, if profit isn't involved. What corporations do: socialize cost and privatize profit. Left to their own devices, they'll remove (through price arbitrage) all but the most profitable. In the prior piece, I expounded on the likelihood that health care, beyond the simplest 19th century doctoring, would cost too much even for the 1%. Just too few "consumers" to spread the fixed cost.

In the case of property/casualty insurance, we've seen the result here in the Northeast US. The insurers (including FEMA, which runs the national flood insurance program) are raising rates, and re-defining storm zones, so much that much of the coastline is too expensive to insure. What's really annoying is that the issue wasn't an issue when it was Red States that got all that implicit support from the rest of the country. But let a once-in-a-century (or two) storm happen in Blue State territory, and all hell breaks loose. "We can't afford all those freeloaders." In due time, all those Red State House members will see to it that their constituents aren't priced out. They do control the House, you know. Whether the Blue State residents get equal treatment? Doubt it.

One effect seems to be clear: Many people around the country may be considering walking away from their insurance, calling into question the premise of the legislation, which was to make the flood insurance program financially sustainable.

(Nailed it!!)

On Tuesday, the House passed a $50.7 billion relief package for Sandy. This time, 180 representatives voted against it -- 179 Republicans, one Democrat -- 56 of whom had voted for the similarly sized Katrina bill.

Now, consider that the analog for health insurance is: you die.

Well, now the mainstream press has delved into the issue, and one has come up with an historical example.

Younger and healthier workers canceled their P.P.O. plans, enrolling in cheaper H.M.O. options or dropping Harvard insurance altogether. Left with a sicker patient base, the P.P.O. raised its premiums further, which prompted the next layer of relatively healthy customers to leave.

And so on. In 1997, Blue Cross/Blue Shield withdrew its P.P.O. from the market, making it a victim of what economists call the death spiral of adverse selection.

Just what the Right Wingnuts want: kill off the sick and damaged, leaving the rich and healthy with cheap insurance. The only problem with the plan is that, in due time, first the 1% will be found to be too sick and damaged and thence the .1%. In due time only Bezos and the Koch brothers will be able to afford the insurance. One might speculate that for those, insurance per se wouldn't even exist. They'll just buy up a personal physician and hospital. Kind of like the 17th century. And all will be well.

The fact is: insurance is socialism. That the USofA is mostly for-profit now (it was not always so, by any means), turns insurance into Twinkies. With all that implies. Kill off the poor and sick and damaged. Don't wait, times a wasting. The Chinese indentured labor makes our iPhones anyway; who needs any more poor Americans?


[update]
My, my. Don't believe what I say, believe what I do. Now, the folks who did the study are described in the reporting as "...the Commonwealth Fund, which strongly supports healthcare reform...", but still how would you go about finding left wing Republicans? The closest cadre I can think of: Fairfax County Virginia, home of all those public trough lapping good-for-nothings. In any event, the study found that with respect to the 26 years of age provision,

They found that by last March, 63 percent of young adults identifying as Republicans had enrolled in a parent's health plan in the last 12 months, compared to 45 percent of those who considered themselves Democrats. About 26 percent of the 1,800 adults surveyed said they were Republicans, 28 percent said they were Democrats and the rest either said they were independent, some other party, or did not say.

And the gut shot (if you're a Right Wingnut, anyway):

"There is a stereotype that young adults believe they are 'invincible' and don't want or need health insurance," said Collins. "This survey shows that is a myth -- typical uninsured young adult is from a low- or middle-income family and works a low-wage job. In general, young adults value health insurance but cannot afford it."

"Enrollment rates of working young adults in their own employer-sponsored plans average nearly 70 percent, with cost being a principal factor cited among those who do not enroll," the report reads.

In other words, yet again, insurance is shared risk. Broaden the pool, and one lowers the individual burden. Segment the pool into ever smaller and homogeneous pieces with prices assigned based on historical risk in each sub-pool, and you drive out the "less desireables" through the simple expedient of increasing the burden on those least able to bear same. And this works fine for a while, particularly in non-health products. And has a certain righteous appeal to the Social Darwinist cabal. But with the advances in health care coming almost exclusively with (increasingly expensive) treatments, not (inexpensive) preventions (the original HMO approach didn't really work), even the 1% won't be able to carry the fixed cost burden. The problem is that when your pool shrinks too small, and your ability to sequester more of the GDP wanes, even you won't be able to afford an MRI. Or some such.

Concentration!

For those of a certain age, "Concentration" is a game show from the 1960's hosted by Hugh Downs. One solved a rebus puzzle by picking covered bits which matched. And so on. Concentration, in this context, reflected the ability to remember which thing, and its twin, lived where on a 30 part board.

Well, how times change. Today's news brings us multiple examples of concentration.

First, Bezos buying the Washington Post. Of course, Bezos has accumulated billions while Amazon hasn't produced reliable profits for its shareholders, ever. And, of course:

...he brings with him a sort of libertarian bent, having supported gay marriage in the state of Washington and fought higher income taxes on wealthy people.

Liberal-ish when it doesn't affect him directly, but rabid when it does. As if his brain is worth billions. Not. Another Murdoch. Woodstein would never have happened with this clown running the show. One might wonder how long it will be until Bezos' minions are steering the editorial? Months, weeks? Soon enough.

As Amazon has grown, so too has the volume of criticism of the company. It controls at least a quarter of the book business, more than any company in the past. Critics say that concentration is unhealthy.

Ya think he might use his new pulpit to roll back sales tax, and protect his impending monopoly position? Amazon doesn't make money, to speak of (occasional teeny profits are blown out by more common huge losses). The goal, quite clearly, is to gain monopoly rents. And make Bezos yet richer. Ain't free enterprise fun?

Next, up: banksters. One of the pillars of financial reform (the term makes me gag for its cynicism) was that banksters weren't supposed to get paid if their deals went south. So, our captive "regulators" look the other way.

Filings for 2011, the most recent available, show that only 40 percent of compensation was deferred for employees at Citigroup's global markets operations in London. The figure was 43 percent for Morgan Stanley's London operations and 44 percent for JPMorgan's. Bank of America deferred 49 percent of London employees' pay.

Barclays, in contrast, deferred 70 percent of its regulated employees' compensation across the whole firm in 2011. Credit Suisse deferred 60 percent.

For the TBTF entities, it's "heads I win, tails you lose". Risk? Not for them.

Last, we have Joe Nocera, who's been on the rag for the NCAA (but carrying water for BP; there's a disagreeing Letter to the Editor today as well). What he's on about today is the possibility, apparently increasing, that college football and basketball will bifurcate. I hadn't been aware that matters had gone so far down the road.

Of course, there is another reason the big five want to go their own way. They wouldn't have to share their wealth with the college sports also-rans. Right now, the major conferences are scheduled to get 75 percent of the 12-year, $5.6 billion deal college football signed with ESPN. Why settle for 75 percent when you can get the whole thing?

On the one hand, paid minor leaguers for the X largest schools, and old fashioned student-athletes for the rest. Again, on the one hand, removing the hypocrisy can be viewed as a step forward. On the other hand, allowing universities (some proportion of which are state sponsored) to push the cynic meter to 12 might not be such a good thing. Moreover, I've never seen convincing data that backs up the assertion that football and basketball "support" the lesser sports. These big schools spend tens of millions (or Nike does, in the case of U. of Oregon) on facilities and salaries. Where can one find a forensic accountant?

Congress might start to wonder why college sports enjoys "educational" tax deductions not available to other businesses. In the new revenue-maximizing superdivision, the players themselves might finally start wondering about the fairness with which they're treated.

Winner-take-all (aka, laissez faire) soon yields insurrection of the losers. The winners then turn to the Fascist State to protect their ill-gotten gains. Football or books or bank loans.