Of Banks and Predators

Yesterday was, as most Tuesdays are, a day for errands.

Mid-day, that meant spending some time with Mom.  We went grocery shopping, and to lunch, because that's what we do on Tuesdays.  We also went by the bank, because we needed to have a conversation there.

Mom and Dad have always kept their day-to-day accounts in the same bank.  It was, for years and years First Virginia Bank.  Then First Virginia was absorbed by BB&T, which was in turn fused with SunTrust to create Truist.  The larger the bank became, the more "efficiencies" and "consolidation" led them to close branch after branch, until the nearby branch where my folks did business for decades was sloughed off.  There's another a few miles further away, and while not as convenient, it's fine.

When Dad died last year, we kept Mom's checking account, and closed Dads', folding that money into a money market account.  There wasn't a point in her having two checking accounts, and getting some interest on that money seemed the prudent thing to do.  Truist was offering a four percent "introductory" yield on their money market, so we put the money there.  

That lasted a couple of months, at which point the rate dropped to just under two percent.  Not great, but not nothing for a liquid asset, and an introductory rate is what it is.  

Last month, as I reviewed Mom's finances, I noted that Truist had lowered that rate again, this time to 0.01 percent.  Zero point zero one.  Or rather, it had "been adjusted, at our discretion, to our standard rate."  

This isn't an interest rate.  It's functionally nothing.  Given market conditions and money market yields at other institutions, it is, to use the technical financial term, total garbage.  You offer an interest bearing account, then fail to provide anything other than illusory interest.  It's all part of their terms and conditions, of course, which makes clear that Truist can lower your rate to the minimum floor for any reason at all.  

Anything significantly under two percent right now is noncompetitive and substandard, and that interest was providing Mom with a week-worth of groceries every month.  Given that Mom hates to deal with that stuff...we trundled off to talk with a human about it.

The bank branch manager was pleasant enough, and helpful.  A few quick taps on his keyboard, and the rate was changed back to two percent.  I asked, directly: "Why would you randomly apply a substandard rate?"  He gave a clearly rehearsed song and dance about needing to pay staff, to which I said, "So, what you're saying is, it's about profit maximization?"  He assented that this was the case.  

I then asked if the rate would be dropped again.  He said it probably would...there are Truist algorithms that do that for them automatically...but that it could be corrected at any time, and we just need to check our monthly reports diligently.

He then suggested that, if we had other assets we could move into that account, we could guarantee that it didn't ever change, because if we were premium customers we would be immune to ever being adjusted to the "standard rate."

"At what level would that be the case?" I asked.

At $250,000, he said.

We thanked him for his time, and we left.

So, to sum up: Truist, one of the ten largest banks in the country, will randomly penalize customers with less than $250,000 in total assets in order to maximize their profits.  Those customers will be provided with a level of service and return that is both substandard and fundamentally unpredictable.  And sure, you get an out if you're "premium."  But as only 10% of American households have $250,000 in total assets, that means that Truist has chosen to extract the most profit from the 90%, while favoring a small minority of wealthy individuals.  

This was, in a single exchange, everything wrong with modern banking and globalized capitalism.

In reducing the incentive to save, and destroying the capacity of a significant supermajority of Americans to build generational wealth through savings, this sort of corporate policy sabotages a healthy society in the name of quarterly returns.

Anarcholibertarian and Anarchocapitalist

Anarcholibertarianism is a peculiar thing, I'll admit.  

It is not the same thing as anarchocapitalism, because anarchocapitalism is a raging oxymoron and conceptually self-annihilating.  

Corporations and corporate power structures are no less a threat to liberty than political power structures.  Because capital is social power, eh?  Capital exhibits all of the gravitic tendencies of human power to concentrate itself, creates all of the same wild imbalances and injustices, and is ultimately as much threat to freedom and human dignity as any other form of collective power.

Wealth has always worked this way, which is why my moral teacher spent a remarkably large amount of time challenging the ethics of capital in his day.  Profit maximization and the relentless focus on the accrual of capital were, for him, fundamentally suspect and dangerous to our integrity as persons.  

At best, wealth represented a system that needed to be subverted and used slyly against itself.  

At worst, Mammon was the heart of our failure.  It is the system that enslaves us.

Which, again, is why it is so peculiar seeing those who are nominally libertarian so enthralled by the power dynamics of capital.  It is no less a danger to liberty than concentrations of political power.  Assuming that the accrual of socially mediated proxies for ownership and control somehow makes one more "free" is absurd.

Freedom, for the libertarian, is an essential state of being, a fundamental aspect of sentience and personhood.  It is an inalienable right.  It will always stand independent from imagined structural frameworks, be they legal or economic.

Hung Out To Dry

When our twenty-year-old dryer punked out last month, I faced something of a conundrum.

On the one hand, I struggled for a bit with the idea that we even needed a dryer.  Our unfinished laundry room already had multiple clotheslines stretched under the ceiling, with enough room for nearly a week's worth of washing.  It takes a full day to get things dry that way, but it does work.

For one weekly wash, and for the next, that was how I rolled, and it was unsurprisingly effective.  Of course, some things...like towels, for pointed instance...dried into hard boards, all of the fluffy softness replaced with a faintly abrasive surface.  My jeans were similarly rigid.  Despite the Laconic appeal of such things, there's just no way my wife was going to tolerate towels so rough they'd annoy a desert mystic.

That, and I knew that once we got into summer, that area of the house gets quite humid, to the point of requiring a dehuey to keep the space from becoming unbearably musty.  Eventually, stuff wouldn't dry down there.

So a dryer it was.  The challenge, though, was finding a dryer that was just a dryer.  Meaning, it tumbles clothes and blows dry, heated air through them as they tumble, and that's it.  Dryers really don't need to do anything else.

But almost every dryer out there was farkled out the wazoo.  Meaning, they were stuffed full of utterly pointless gimcrackery.  WiFi enabled and with downloadable app connectivity, with chipsets and control screens and dozens of other utterly irrelevant and pricey features.  I could check on my dryer anywhere on the planet!  Why would I want to do so?  What's the use-case for such a thing?  Gosh, say the designers, don't worry your pretty little head about that. 

Almost all dryers were like this.  I found one that wasn't, one that was...as best I could tell...simply a rebadged version of the same decades-old unit that had finally given up the ghost.  No electronic controls, just knobs.  All mechanical.  There we go.  Just what I need.

But there was a challenge:  It wasn't in stock most places.  There were plenty of the overpriced doohickey-laden critters, all of which were selling for hundreds...and in some cases, over a thousand...more.  The most simple, most affordable, functional dryer?  Most places, it was backordered.  

Meaning, people want it.  Every one they make, people buy.  I found one, but it took time.

And here, I see something of a market failure.  Because profit maximization often requires that a manufacturer manufacture not just products, but demand.  And all one wants in an appliance is that it does its job.

Or so I'd think, but I suppose I'm peculiar.  Perhaps we'd all rather pay more for irrelevant features, pointless connectivity, and counterproductive overcomplication.  Perhaps we prefer having our actual needs ignored, and replaced with synthetic desires.

Perhaps we enjoy being hung out to dry. 

Of Art and the Machine

When I listen to creatives raising the alarm about artificial intelligence, there's a consistent theme.  

Looking at what the LLMs (ChatGPT/Bard) can write, and the images produced by diffusion systems (Dall E/Midjourney), there's been a terrifying surge in machine capacity in the last five years.  We're now at full Turing compliance for Generative Transformers, meaning that we've blithely skipped over the threshold that twentieth century AI pioneer Alan Turing established for determining the presence of synthetic intelligence.  There is no reason that machines couldn't soon do every form of work requiring awareness, other than that we're restraining them.

As it so happens, the first place that seems to be having an impact is the arts.

It's to the point where writers have begun to feel that their livelihoods are threatened, because they are.  Machine intelligence is great at burping out new content, and can do so at a hundred times the pace of human writers.  Almost all of the writing for the internet content mills, with their lazy listicles and corporately sourced content?  They could be done by AI.  This is equally true of most of the derivative romance novels out there, and the plot of every film in the Fast and Furious franchise.

Commercial artists are doubly threatened, because you can produce an image in seconds, and refine it in minutes, replicating the hours of focused labor necessary to make a single finished piece of visual art.

The image that accompanies this post is flawed, sure, but it took me a single minute to produce.  Just one prompt to Dall E, then another, and then I was like, eh, sure.  That one'll do.  For a graphic designer, that'd take days.

If writers and artists think their livelihoods are threatened, it's only because they are.  In a capitalist economy, AI means artists and writers can no longer expect to make a living through their work.

Which, I think, is the point we creative souls are all missing.  Writers and artists are seeing this through the wrong lens, seeing it as we have been trained to see it. 

AI isn't the problem.  Capitalism is.

There's nothing about AI that prevents me from doing what I love, from creating and sharing what I create.  The joy of writing is a human joy, and while I am slower at it than a machine, I still love to write.  The act itself is part of who I am.  

But we have been taught to view art as a commodity, as part of a system of economic exchange, as something that derives value only insofar as it can be marketized.

That understanding won't survive an AI era.

But then again, neither may capitalism.

Impairment of Goodwill

Corporations are strange things, these transhuman pseudo-entities that govern our economic life.  And as strange as they are, corporate accounting is even more peculiar.

This morning, I was reading through my newspaper, something I still do because I'm old school.  It's tactile and satisfying, and I'll encounter things that I wouldn't seek if I was just chasing after the things that interest me.

The article that struck me was a meta-article, as the Washington Post reported on the Washington Post's income over the last year.  It wasn't pretty, as the balance sheets reflected a loss of over $45 million.

What was odd, though, was the the source of the loss.  It was a $100 million accounting write-off, reflecting the financial impact of what was being called "impairment of goodwill." Otherwise?  Things weren't so terrible.  To which I said, huh?  "Impairment of Goodwill?"  I'd never heard that phrase, but I know what those words mean.  That couldn't possibly mean what it appears to mean.   You're monetizing how much people like you?

I looked it up.  From investopedia, the definition is given thusly:

Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset like buildings or equipment.  Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.

So if you screw up, or your brand name takes a hit, you can announce to the world that you've taken a huge loss for the year, even if you've actually and materially turned a profit.  That helps reduce your tax liability, limit how much you might pay out in dividends, and all other sorts of other fun things.

Imagine for a moment if we mortals were allowed to do this.  The belovedspear brand, for instance, is relatively weak.  Should I be able to claim a significant loss, and reduce my tax burden?  If I succumb to a norovirus right smack in the middle of a worship service, and my reputation is damaged, shouldn't that be reflected somewhere on my 1040 this year?

No such luck.

I guess reality is different if you're a corporation.  I will say, though, that learning this did impair my goodwill towards corporate America and generally accepted accounting practices.  I'm sure they'll find some way to monetize that.

The Enemy of Capitalism

With the arrival of the new iPhone, I find myself musing about whether or not I should get one. Yeah, it's got a better screen. And two cameras. And video chat, albeit only iPhone to iPhone and only on WiFi. It's pretty cool.

On the other hand, there's nothing wrong with my current iPhone. Which is also my third iPhone, after my first had a cybernetic aneurysm and my second picked a fight with the tile floor in my kitchen. I really and truly don't need anything other than the phone I have. I find myself thinking that way about a whole bunch of the objects I use.

My eight-year old Honda minivan, for example. It's got around 90,000 miles on the clock. It's got a few dings in it. But it still fits our family plus three. It still carries around a crazy amount of stuff. It's not as efficient as I'd like, but it's just as practical today as it was back in 2002 when it rolled off a factory line in Ohio. It was wonderfully designed and engineered, and I will, after cleaning and vacuuming it out, sometimes just marvel at what an amazing job folks did creating something so useful. It's also comfortable, riding smoother and quieter than the shiniest new Coupe DeVille that ever sat on a dealer's lot when I was a kid. I have no need for anything better.

Then there's my motorcycle. It's ten years old. It's got about 38,000 miles on it, which is a whole bunch for a sportbike. It is, shall we say, "cosmetically imperfect," at least as much so as the guy who rides it. It's reaching the point where it can be accurately described as a ratbike. In a brief fit of madness earlier this year, I thought I might be rid of it. But then I rode it again, on a beautiful Spring day. As air snarled through the intake, and the bike sprang forward, I realized that in every way, it meets my motorized two-wheeled transportation needs. I do not need to replace it. More importantly, I have no desire to replace it.

Our house? Much the same. I am content with it. While there are always things that need to be replaced, and things that can be improved upon, I find that with most of the things in my life, I am content with what I have so long as it works.

I fear that might make me dangerous. Lingering contentment, a pervasive sense of being at peace, and quiet, lasting happiness are the enemies of global capitalism.

Debt

As I was growing up, my folks whispered a subversive, un-American, anti-capitalist idea in my ear. Not only did they teach it to me, they lived it out. That dangerous idea: don't live beyond your means.

Outside of having mortgage debt, they took out no loans. Period. Ever. They always spent less than they made. That meant a humble but functional home. That meant cars that were purchased not as status symbols, but as ways to get around. Those cars were often purchased used, and they were purchased with cash on the barrel head. That meant clothes that...well...might have been in fashion 15 years ago, when they were bought. College for the kids? That was saved for. Home improvements? Paid in cash, after saving for years.

A credit card was a dangerous thing. It...meaning the one and only card you allowed yourself to have...was to be paid off every month, and watched as warily as a bobcat in a nursery.

As best we can, my family has tried as best we can to stick to this approach to financing our lives, while all the while feeling a bit strange. It's just so out of touch with the way the world works. This is not the way we good capitalist consumers have been taught to live. Nor, quite frankly, is it the way that our governments do business.

That is, I'm convinced, why the world increasingly finds itself in such a financial fustercluck. When you can live large, charge after charge, eventually, inescapably, you'll drive yourself into personal ruin. When housing speculation feeds off of the false abundance of irrational subprime lending, suddenly homes are driven out of reach of the average family. When those loans fail, as they inevitably must, our entire financial system totters. When entire nations decide to live high on the borrowed hog of their sovereign debt, the system shakes even more. That shaking hasn't even really begun, kids. Endemic debt has this way of destabilizing societies, be they the ancient Hebrew people or our newfound global community. That's the reason debt was viewed so warily by the Torah. A society that allows indebtedness to run rampant..at any level...will eventually tear itself to pieces.

We conveniently forget, even in this putatively "Christian" nation, that our sacred texts never ever no not never teach that the false abundance of debt-driven living is something worth seeking.

Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

I can't imagine that our comfy bed of debt will still be under us, as a nation, for very much longer.

Let Them Eat Mud

As one of the four people who still read print media, I was going through the WaPo yesterday, and stumbled across an article on Haiti.

Haiti is and has seemingly always been a total mess. As a kid, my church maintained a partnership with Haiti, sending relief supplies and other support. A good friend recently came back from a medical mission there, and the delightful pictures of suppurating wounds and skin ailments he put up confirmed that things are pretty intensely unpleasant there still. It's a little slice of intractably abject poverty, right there in our own backyard.

What particularly struck me in the article were two things. First, that Haitians have been so impacted by the recent economic downturn that they can no longer afford "mud cookies." Those are a delightful baked confection in which the most significant ingredient is clay. People increasingly can't even buy baked dirt in Haiti.

The second item was a little snippet of "hope" being offered up by our Secretary of State as she toured a garment factory in Port au Prince, the capital.

She marveled at the factory, and hailed it as a model for progress in Haiti. Workers there were making between two and three times the average Haitian's daily salary...which means they were making between $4 and $6 a day. Marvelous! Wonderful! They're being given the opportunity to pull themselves out of poverty!

So here we have jobs that used to pay American garment industry workers $6 an hour...and Haitian workers are being paid almost a factor of 10 less to do the same work. Unless you own the factories, how is this a triumph? Six bucks a day isn't going to turn things around. Sure, you can have all the mud cookies you can eat. Haitians can continue to struggle, and be only very slightly better fed, until they get sick and can't do it any more.

What I marvel at as I look at this sort of thing is how perfectly it mirrors the worst elements of late 19th and early 20th century capitalism. Back then, it was Americans who labored for negligible pay and for backbreaking hours. They mostly came from rural backgrounds, and were lured to urban industrial centers with the promise of consistent work. Within most democratic nations, though, the fact that folks could vote and freely organize and associate (more or less) ultimately counterbalanced the worst practices of profit-driven enterprise.

But I struggle to see how this works with globalized capitalism. If those who...ahem...control the means of production are able to circumvent democratic counterbalances, I'm just not sure how the intense imbalances in wealth that the market generates are ever going to be resolved. All one has to do is move industry to places where government is either weak or does not represent it's people.

For some reason, this sort of thing always makes me think of the prophet Amos:

This is what the LORD says:
"For three sins of Israel,
even for four, I will not turn back {my wrath}.
They sell the righteous for silver,
and the needy for a pair of sandals.

They trample on the heads of the poor
as upon the dust of the ground
and deny justice to the oppressed.
Father and son use the same girl
and so profane my holy name.

They lie down beside every altar
on garments taken in pledge.
In the house of their god
they drink wine taken as fines.

I'm Rather Fond of Trebuchets, Actually

There was a fascinating editorial in the WaPo this last week written by Robert J. Samuelson, a conservative economic commentator whose writings are always thought provoking. It was a description of what he perceives as an assault on the foundation of American capitalism, entitled "Capitalism Under Siege."

Most of the article referred back to the work of eminent economist Joseph Schumpeter, who felt that capitalism contained within itself the seeds of it's own destruction. In addition to it's dynamism, which we enjoy during the boom times but that seriously bugs us during the busts, capitalism's creation of excess resources establishes:

...an oppositional class of "intellectuals" who would nurture popular discontents and disparage values (self-enrichment, risk-taking) necessary for economic success.

As I read this, I found myself agreeing, but thinking that perhaps it isn't just "intellectuals" who are the problem for capitalism. The threat to the core values of capitalism does not just come from leftist professors on campus and busybodies who need to get out there and have a real job.

It comes, I think, from Christianity as well. Working diligently is a Christian virtue, sure. So is being willing to take risks and not cling to the things that this world values. Complacence and indolence wouldn't have gotten the apostles very far.

But self-enrichment? Not really. Christian faith has very little use for self enrichment. If it happens to us as a collateral result of our hard work, then...well...you have more responsibilities in terms of how those resources are used. As a goal towards which we orient ourselves, though, it is rather explicitly and repeatedly rejected by our Lord and Savior.

It's why folks like Ayn Rand despised Jesus people...because within His life and teachings, there lies something very very incompatible with the competitive culture of self that is at the beating heart of the free market.