Wednesday, June 05, 2013

The Diversity Racket has Big Business at Gunpoint

The western world is awash in diversity is good propaganda. You see it at the ATM, in Sears ads, at schools and what feels like any corporate space of high visibility. It's good. Support it. If the goal of American business is to maximize profits, then why the hell do they waste time and money on what feels likes non-profit maximizing efforts? They have to because that is the nature of modern day, crony capitalism. Businesses have to signal their progressive sympathies and comply with the diversity mantra to stay in the good graces of those who award contracts and award penalties. These actions are profit maximizing because they both play to the offensive side of earning business and the defensive side of minimizing or negating frivolous lawsuits.

Pardon my MS Paint skills, but the normal flow of the economy is one where producers and consumers get together with some interference and wealth transfer through the government. Yes, reactionaries, even in a monarchy, the tax  and spend system of the government was there for the king. Because the government doesn't create much of value, the government really just sneaks in and confiscates a share of it which they can keep out of the consumer-producer loop or return it and allocate wealth to designated interests. The diagram to the right is the set up of a productive economy. We don't have a productive economy anymore.

Since the mid-'80s, America has had a FIRE based economy. The Financial, Insurance, and Real Estate economy has fueled asset inflation and created the debt based wealth of the post-'80 world. America's employment focus shifted to transferring a greater piece of the economic pie to the financial sector. Whether generating loans, consulting on R&D, acquisitions, mergers and other financial moves, the FIRE sector was outside the traditional consumer-producer relationship and outside of government yet a part of the whole picture. Banking, real estate and insurance all have a place in an economy. The problem arises with the growth of churn, proprietary trading and taking advantage of the tax code to perform leveraged buy outs to channel earnings to debt holders rather than labor and capital. America tweaked the tax codes so that business debt was a tax deduction, there were very low hurdles to meet to escape capital gains on real estate sales, property tax was a deduction, mortgage interest, and capital gains taxes were reduced. The government worked to shift the focus of the economy to the FIRE sector and away from the productive sector. The government and media also brainwashed the masses to fear all inflation in wages and cost push inflation while tricking them into liking asset inflation, which benefits the FIRE economy and early receivers of debt.

Tacked onto this is the horrendous liberal creation and lawyer fueled lawsuit sector. As I wrote during the Adria Richards fiasco, lawyers strangle business with dumb lawsuits. Lawyers make businesses defensive as they wish to minimize lawsuit risk. The lawsuits act as a means for the non-productive progressive douchebags of the world to carve out a share of the rents of the productive economy. The judicial system acts as a distribution mechanism for the victim groups of the left and a burden for the productive sectors that defy the cathedral. I have thin lines going from the FIRE, consumers and producers to lawyers, but really it is to the entire subset of prog industries like lawyers, universities, NGOs and consultants. There is some good from technology and science departments at universities, but these sectors are just leeches. Businesses play defense to minimize their slice of revenues they have to send to the cathedral arms, but all elements get some. Universities create the new boogeymen that are 'found' in studies that are later used by lawyers in class action or discrimination suits. Businesses pays consultants and NGOs to create safe environments, so that they are complying with the unwritten rules but really paying tribute to the diversity gods. That money is like protection money in case of a wrongful termination lawsuit. Plus, they would have hired a special lawyer to crate termination procedures that are safe for firing victim group members. This slides more of the revenue of the productive economy to cathedral arms. If you don't comply, you get hit with lawsuits.

How is this offense though for a firm? Government now makes up a significant portion of the economy, and it is no longer just in the defense and big durable good sector like in the '50s and '60s. The entire service sector and FIRE sector benefits from government contracts. A large government contract can help a firm spread their fixed expenses out, helping overall operating costs per customer. A large contract might serve as a tentpole. For example, if a firm writes a contract with the State of Pennsylvania, they can use that in marketing their services to every single small municipality and government organization in the state. A firm may not make money on Pennsylvania, but it will recoup it back on the smaller groups impressed that a firm has the state as a client. It's not easy to win those contracts. The bids are tough, plus they have these sheets. See to the right. If it is neck and neck, wouldn't you want to have higher numbers for diversity at your firm? Notice that they want to see the count for non-professional and professional, so you can't just hire all your Hispanics as custodians. This is how they get businesses to comply. This is why businesses create HR-diversity crews. A diversity crew is a professional department, and where a firm can stock 10-20 minorities to boost their numbers. This is how the cathedral gets big business to kneel before the altar.

This is a dysfunctional system. Businesses waste so much money complying with the progressive gods. They can't stop though because earning a share of government business as well as playing defense against lawsuits is incredibly important in our cutthroat business climate. I don't think Chinese firms have to deal with this. This is why Exxon will have those diversity outreach programs and trumpet their efforts on television. They have to. This is our economic world since the codification of victimhood has created court room awards that keep adding up. This is why the left's neoliberal economic system is a mess. It is impossible to open borders, reduce trade barriers, all the while imposing environmental, economic and diversity based hurdles that the foreign competition does not have to face. This is also why cheap credit is the weak spot. Once the cheap money is gone, the rest of our restructuring will not be too far behind.

4 comments:

PRCD said...

"The problem arises with the growth of churn, proprietary trading and taking advantage of the tax code to perform leveraged buy outs to channel earnings to debt holders rather than labor and capital. America tweaked the tax codes so that business debt was a tax deduction, there were very low hurdles to meet to escape capital gains on real estate sales, property tax was a deduction, mortgage interest, and capital gains taxes were reduced"

This works both ways though. Proles can stash away money in index funds and make money off of capital gains and dividends just like FIRE economy workers. Compounding interest can greatly reduce the amount you need to work.

"This is why Exxon will have those diversity outreach programs and trumpet their efforts on television. They have to. This is our economic world since the codification of victimhood has created court room awards that keep adding up. "

I think it goes beyond this. Most CEOs and people sitting on the boards of large companies feel white guilt and think diversity is a good thing. There's no ideological push back on it because corporate officers are usually libs. They believe in economic freedom but they want open borders and embrace most SWPL causes. I've sat next to our general mgr as he tried talking to customers and it's pretty apparent he has nothing in common with the working stiff ideologically or financially.

I'm stashing my cash and trying to retire early.

Son of Brock Landers said...

Thank you for the comment. I'd argue the average prole has no assets built up if the wealth distribution and asset holding surveys are to be believed.

Very smart comment on the CEOs/management worldview. White guilt is real with Boomers, who are still in power positions in huge numbers. White guilt isnt as strong in the youngsters per surveys that Randall Parker has posted about.

PRCD said...

Here's a prole guide to finance I found:
http://www.mrmoneymustache.com/

I'm convinced most people are poor simply because they don't track their spending and buy stuff they don't need. People seem to spend themselves into poverty. Your average renter has a garage full of stuff he doesn't need and 2 expensive cars, for instance.

I don't think youngsters are going to get to the CEO level in this country. Most of the new CEOs will be created in Asia. Everyone and everything is trying to get to Asia now. Millenials and younger are mostly apathetic about climbing the ladder. I know I am.

total12 said...

The diagram to the right is the set up of a productive economy. We don't have a productive economy anymore.Uni-source