The allure of zero percent interest is that it sends a signal to investors that capital magically self-replicates and that no investment decision could ever really be wrong. Of course, the reality of capital markets is much different. The article lists 11 specific problems caused by zero percent interest, but that’s not exhaustive by any means. For starters, here’s some of the more bizarre ones:
Environmental, Social, and Governance. No one actually knows what any of that means, but you can throw that label on your fund, change your website’s color to a shade of light green, and instantly charge 5x higher expense ratios.
Adjusted EBITDA is a fascinating tool that more companies should have utilized. You literally just take your negative EBITDA and subtract expenses until it’s positive, then call it adjusted EBITDA.
White-collar America spent 18 months in a labor market facade, the industrial devolution of remote workers refusing to actually remotely work. It was beautiful, and we called it work-life balance. And now, with companies cutting jobs and demanding that their employees return to the office, that beautiful, wonderful dream is dead.
Dennis – speaking of progressive inventions, what about MAID? It’s not useless, it reduces expenses, for our health care system.
I think the Liberals should take ownership. They should change the name to LAID, Liberal Assistance In Dying. In the next election their winning slogan could be: Vote Liberal and get LAID.
Bank lends money to deadbeat.
Year one, bank claims paper is worth X$.
Year two, bank claims paper is worth X$+interest.
Seems to me that interest and fractional reserve lending is what claims to “magically replicate capital.”
In times of high inflation companies can further inflate their balance sheet by up valuing all their capital equipment including the junk in the scrap yard, surplus stock etc. Serves to keep the bank at bay for a while longer while you divert cash elsewhere.
And now, with companies cutting jobs and demanding that their employees return to the office
Part of the problem is that organizations refuse to learn anything and revert to ideas that don’t work because most managers are inept. I can’t speak to other kinds of office work but in software engineering remote work is a godsend to programmers and their employers: the engineers are more productive and cost the company less to support. And yet many organizations are trying to revert to hybrid work and losing senior engineers because there’s no good reason for it beyond management needing some semblance of control.
“I can’t speak to other kinds of office work but in software engineering remote work is a godsend…”
It’s a godsend to federal employees, too! They can do less & take even longer to do it, all the while complaining that they need suppers paid for, as well.
Most office environments are now toxically woke. This article reflects clear thinking in an increasingly deranged world.
I had a contract some years back fabricating a portable building for provincial Forestry. It had to be dismantled after final inspection so it could be helicoptered onto the final site.
The terms of the contract called for it to be crated up after in sections and ready for airlift.
The forestry engineer who I worked under was a real decent guy and had no problem with my suggestion that it be built in Forestry’s secondary warehouse which saw little use and that the project could be built in sections without final assembly as he agreed it was redundant to put the whole thing together and then take it apart. I figured it all out on paper ,he looked it over and gave the OK.
When it was near completion he asked if I could hurry it up just a little as Friday was his last day and he wanted to get it out of the way before he left otherwise someone else would take over and, in his words that would be grief for me as the general consensus around the office was that senior management hadn’t been happy with the idea of me building it in their facility,(which I already knew due to occaisional snide remarks muttered when certain people walked by).
I finished the project and it was passed with a compliment from the engineer that it was in fact a better approach to tackle such projects. We sat around and chatted a bit and he told me he was moving into the private sector as he’d had enough of working for the gov’t where there was little accountability etc.
Originally this story was to be about a different aspect of life in the gov’t pay though it relates closely to the above.
While I was working at the Forestry warehouse for about 6 weeks, I couldn’t help noticing that they had a huge pile of range (fence) posts piled in the warehouse yard. A few different afternoons a week different guys turned up at the yard and climbed on the forklift and moved a quantity of these posts across the yard only for them, or someone else to turn up another day and move them back again. This continually went on all the time I worked there and one day after I got to know the old warehouse man a bit, I asked him about this. He laughed and told me confidentially that these were senior management guys killing time by moving the posts back and forth on a continual basis. He also mentioned that there were about 20 thousand posts in the pile and that was because the district office used up their previous years budget buying up what wasn’t needed OR they would lose that funding in the next fiscal year’s budget.
So much for respect of taxpayer money !
*(As an after note), I found out later that there was a supposed change of plan and the project building was put in indefinite storage where over the years, it was systematically robbed of components,hardware etc .
It seems government employees are immune to the financial consequences private enterprises are subject to. But we knew that didn’t we.
ac @ 4.08, not just government.
I used to train train drivers (Engineers) for a privately owned (well, Dutch government…) Train Operating Company in the UK and had to order the equipment they would need, PPE, keys, rucksacks, Rule Books etc.
We had suppliers who charged what I thought was lot of money for some of the stuff, so looked around and found I could get some items cheaper, but was told I had to use the ‘approved’ suppliers.
It wasn’t my cash, but I hated the cavalier attitude to spending money – Milton Friedmans “Four Ways of Spending Money” applies.