Tuesday, November 26, 2013

The Illusion of Profit

We have been lied to. And we believe the lies because we don't want to bother to change the world. We live within a multiple set of illusions – coordinated to allow the takers to get away with pillage. 

There are many ways to define profit. Of course, the typical way is to count how much money one has gained. But this is a very narrow perspective. Money isn't everything – and everything we do has consequences. If the consequences of our actions are ignored when we calculate profit, we are essentially lying to ourselves. And why would we do this? Because for a while, we just might get away with it.

Have you ever noticed anyone ever talk about long-term real-world net profits?
But I bet you've heard of quick profits – easy money – bubble economies – monopoly control – no-bid government contracts – revolving doors – favored status from big campaign contributions – subsidies and tax breaks for highly profitable companies – burdensome regulations on competitors – black markets – gray markets – Ponzi schemes – market manipulations – bailouts – excessive printing of money – etc.

Obviously, we live in a world where doing the right things often take second place to doing the “profitable” things (no matter the rules one bends or the externalities one ignores). At present, this is just the state of capitalism (and socialism, and even communism). However, there are serious consequences from everyone acting desperate on a regular basis. Of course, the captains of money don't care – they can't. In our economy, doing the wise thing often puts one at a disadvantage in the market. This is the fatal flaw of our markets.

the illusion of functional systems

We live in a world where doing the right thing often isn't a “practical” option.

Consider the oil company executive. Much of his wealth is tied up in stocks in his oil company. Therefore, the oil company executive schemes constantly of ways to keep company stock prices up. Consequently, he continues to mine and sell oil – even if there might be wiser (but not as “profitable”) energy options worth investing in. The consequences of his actions commit the massive oil company to decades more extraction of poisonous fossil fuels – and climate change – and multi-billion dollar “profits.” Nonetheless, eventually peak oil comes along and all the easy to mine oil is gone. There's still oil though. The oil company just has to deep water drill for it, or frack for it, or process it out of tar sands. Yikes! Conditions have radically changed for the oil company. These are extreme challenges. The newer sources of oil are much smaller, much more expensive to get, and much more dangerous to deal with. And more and more people want oil.

...But wait a minute. If a lot of people want something everyone has less and less of, wouldn't that drive prices (and therefore “profits”) up? Yes. But only temporarily, because eventually people would figure out how to do without as much oil. So the oil executive only wants prices to go up some – at least enough to pay for all that extreme mining – and any fines they might later have to pay for the extreme consequences.

Oil companies have had to resort to radically extreme mining to retain their “profit” stream. By definition, that would make them extremists. But hardly anyone has really noticed. There's still gas at the pump...

The oil companies want consumers and investors to think everything is business as usual, even though the whole oil business model has been turned on its end. The world has run out of easy to get oil. But the oil companies can't tell us that. They have committed their massive companies to decades more of oil production. They have to tell us that there is plenty of oil.

And what would happen if the oil company didn't have a long list of “proven” reserves ready to be mined? Investors would be suspicious that the oil company couldn't continue to be profitable. Consequently, the oil company executive has to list worse and worse resources just to keep his company's stock prices up.

the illusion of stability

Moreover, the oil company executive has to worry about consumers. With Global warming and the high price of gas becoming very serious concerns, and electric cars becoming reasonable options; there inevitably will be a mass consumer exodus from the gas fired automobile. But, the oil man still has a trick up his sleeve. He can stall that exodus by temporarily holding gas prices down. Car purchases are somewhat long-term commitments. If the oil company executive can convince the public to buy another gas-fired car, millions will be captured customers for years.

the illusion of value

So, how does the oil company executive convince consumers to make bad decisions? The way they always have; by advertising (and threatening to stop advertising). Consumers have been herded like sheep for decades now. Advertising works. (The most amazing example of how effective advertising manipulates people is when Monsanto etc. convinced voters to vote against GMO product labeling.) And in spite of the fact that everyone knows the mass media is a for-profit industry that cannot be trusted because it panders to its advertisers and investors, people still instinctively believe what they see on TV.

the illusion of integrity

Far too often, the mass media is notorious for leaving out information that might offend their advertisers. Far too often, we are distracted from the issues that are the most important. Because of distractions, what consumers don't often think about is; fossil fuels are poisons that pollute everything they touch, our whole civilization has been poisoned for decades, and on top of that we are changing our climate to the point life on Earth is threatened. And what consumers also don't think about is that our economy is simply a subset of the Environment and that no economy can survive a collapse of our Environment.

the illusion of the whole truth

There's one more thing the oil company executive has to worry about. Much of the company's oil comes from foreign countries. It could be argued that in some form or another, the United States has been at war over oil most of the time for over the past two decades – and his oil company hasn't had to pay for that. On top of that, when there is a war, the price of oil goes up. Oh, and one more thing; our military uses a lot of oil.

So, it would be an understatement to say that the oil company benefits from war at the taxpayers' and consumers' expense. Essentially, financial security for the oil company means insecurity for the world.

the illusion of security

The oil company executive realizes, however, that his company is not alone in benefiting financially from war. A number of government military contractors have become some of the richest people in America by raking in billions of taxpayer dollars. America spends more on what we call “defense” than most of the rest of the world combined. America has about 800 foreign military bases – we don't really know how many (or even why a foreign military presence should be called “defense”). And astonishingly, Americans don't even know how many “wars” we're actually in. But we apparently have been convinced we need to kill far away poor people with drones in the name of “defense.”

the illusion of defense

Many of the people of America have conceded that this is a messed up world and the best one can do is maximize one's “profits”... or at least that's what the oil company executive does. But the rest of us don't have to put up with that. We can always buy our gas from some other sleazy oil company. Or we could vote to end all those “wars” (well, no we can't, at least not directly). We could even vote to use our tax monies to pay for food stamps instead of enriching the merchants of death. But who are we going to vote for to do that? We've allowed our candidates to be chosen for us before we get to vote – and we have casually accepted the lack of direct democracy.

the illusion of choice

The sheer scope of overwhelming corruption is breathtaking. It would practically take a revolution to clean up Washington. And nobody really wants a real revolution. We'd rather just suffer.

the illusion of hopelessness

This is far from the best we can do – and the “captains of money” know it. But as long as they can treat their employees like slaves, their customers like addicts, their investors like suckers, and the environment like a limitless credit card; they'll keep playing the game. And they run the game. They have the money to tell our government “representatives” what to do. (By the way, that was once your money.)

the illusion of leadership

Everything is being pillaged. Moreover, your tax dollars and the bills you pay are what are financing this world-wide pillage. In effect, you are paying for our own long-term self-destruction. You are being used to destroy the environment of the planet to make a few people even more unbelievably rich. Ultimately, no economy will survive that.

the illusion of teamwork

In spite of it all, you might feel you're doing quite well... But are you really, and for how long? This has been the condition of all the well-to-do throughout history. The rich were the last to realize how bad things really were. And by the time things went bad for the rich, it was too late for everyone.

the illusion of success

Borrowing from the future is not profit. Our Economy has been operating like a Ponzi scheme. The study of economics has been an exercise in ignoring everything but money. Our society has not really considered the end-game to this process of turning everything of any real value into money. When all that is left is money, there won't be anything left worth buying.

the illusion of profit

Just remember; the Earth is our habitat. And if we trash our habitat, we don't get a new cage. Or, for those of you who are Christians; if we destroy God's creation, we cannot expect to be permitted into Heaven. In other words; focusing just on “profits” can ultimately lead to our downfall. Or, as has been said; the road to Hell is paved with good intentions.

We have been lied to about putting the Earth's resources to beneficial use – no matter what is done. We have been lied to that the pollution our civilization has created is tolerable. We have been lied to about how our economy (dis)functions. We have been lied to about welfare for the rich. We have been lied to about our tax dollars being spent on “defense.” We have been lied to that we have a real choice in the matter. And we've been lied to that there is nothing we can do about this situation. Essentially, we've been lied to about most everything – to keep us in our place – subservient. But these lies have consequences. Our economy and our Environment are in serious trouble.

It's as if we've been sleeping while the house burns all around us.

the illusion of reality

...Now, try to imagine what truly waking up feels like.
Everything you thought you knew in your dream state was a lie.

Possibly, we could live somewhat well with this lie for a while, but eventually our economy must evolve or the consequences of its faults will kill us. As with any system that continues to get worse; fix it or it will break.

For decades, we've been ignoring the consequences of our actions because fixing things has seemed like such a monumental task. But in the time being, the task has gotten much bigger and the consequences more immediate. We are now cornered in our house fire. We now have to fight the fire or die... But for investors, that would be a simple thing. Just don't invest in fossil fuels. For consumers, it might cost a little more to buy renewable power, but in the long run (which now is only a few years ahead) it beats a collapsing environment and economy. And most importantly, we can't allow others to make our decisions for us. They have proven themselves too selfish and irresponsible time and again.

Sorry about all the bad news. But there is good news. The good news is that as a civilization, we now can mature. The good news is now we can start concerning ourselves with real-world profits and long-term issues.

Things can be much better than they are now.

That's what the takers don't want you to know.
...And because they have elevated money to the point of idolatry, that's what they don't realize either.