How We Justified Piling Debt on Poor Customers
newrepublic.com
newrepublic.com
And we don't want to give loans to poor people because that's clearly predatory lending. They would be better off without the option to decide for themselves because everyone knows how stupid they are and how incapable they are if making any kind of decent decision.
That's a recipe for a permanent underclass.
Opinion of a formerly homeless person who took out a Payday loan to go stay at a dive of a hotel for three nights to escape a deadly storm. My logic: three nights in a hotel was cheaper than replacing my laptop, which I needed to keep earning money.
I had no idea how I would eat for the rest of the month and didn't care after walking past a river about six times wider than I had ever seen it and my "safe" campsite for weathering the storm that was currently under probably six to ten feet of water -- before the worst part of the storm rolled in. I just knew I would be in a hotel that night if there was any means whatsoever to arrange it so I wouldn't die that weekend.
And that's exactly my point. Your assumption that I'm some weird statistical outlier is exactly the problem.
It comes across to me roughly like this:
"Oh, Doreen is actually smart or something. But that's the rare exception among the poor. So fuck the rest of 'em!"
To take your argument to its rational extreme, it would be a bad idea to disallow poor people literally selling themselves to a corporation because that's taking away their basic rights.
And this is literally something that happens when you don't put regulations to stop it [1]. The fact that the poor predominately are people who take payday loans which often end up exploitative of their situation should tell you that payday loans might be a bad thing! The norm is that people are not escaping payday loans. Payday loans need to go and we need an actual safety net in place.
[1] https://www.theguardian.com/us-news/2015/may/09/us-payday-lo...
This isn't a right we grant other people, so, no, it is not the logical conclusion.
The antidote to a Payday loan habit is more earned income or other access to resources that aren't borrowed. So if you want to solve this, give cash gifts to poor people you know, help vulnerable people access earned income or other resources, work on solving the housing supply issue in the US and/or work on addressing the healthcare issue in the US.
I do what I can to provide useful information to homeless and at-risk Americans as my contribution, for example:
https://sandiegohomelesssurvivalguide.blogspot.com/
http://whathelpsthehomeless.blogspot.com/
https://genevievefiles.blogspot.com/
http://streetlifesolutions.blogspot.com/
https://writepay.blogspot.com/
Simply cutting people off from the shitty resources they currently have access to without giving them something better only makes their problems worse. It's easier to cut people off than provide additional (superior) support and most people arguing vociferously for cutting them off are not actually actively working on better solutions, so it ends up being a big fat "fuck you" to the poor with a self-righteous justification to make it sound better.
It isn't something people are allowed to do now because we've decided that it was too societally abused in the past. Look up the history of voluntary indentured servitude, for example.
Develop better instruments and solutions, and then Payday loans can join indentured servitude and dinosaurs in museums.
And if the author had had more clout / underlings she could have done a more thorough analysis of spending patterns to identify who would buy ephemerals like entertainment vs necessities like food or shelter.
And if there was buy-in from the government then they could add government assistance to the program, like negative interest rates for essential purchases or something.
But C1 and every other business is focused on making a profit next quarter, while the government is focused on getting re-elected, so there's nobody around to do any development like that.
I'm doing what I can and can't even get adequate Patreon support.
Everyone always has an excuse. If you want a better world, roll up your sleeves or pull out your checkbook and actively support something better rather than telling me why it can't and won't change.
Donate a book to help rehabilitate the incarcerated: https://bookriot.com/2015/09/03/donate-books-prisons/
Volunteer to help the incarcerated: https://www.bop.gov/jobs/volunteer.jsp
Help end homelessness today: https://endhomelessness.org/
Help feed the homeless: https://www.homelessshelterdirectory.org/
Help feed anyone that needs food: https://www.feedingamerica.org/find-your-local-foodbank?refe...
Help feed hungry children and babies: https://www.foodpantries.org/
Help those in need near you: https://www.redcross.org/volunteer/volunteer-role-finder.htm...
Yapping about the nuances of helping others on here means jack-squat to those people in your community that need help now.
Any amount of help is 'good enough', any amount of volunteering is 'the best way to do things', any amount of canned food for a hungry child is 'spending money wisely'.
Loans are not inherently predatory. Giving loans without interest is a noble thing to do. Of course, many people don't like that, and want to take advantage of the poor, which makes loans with interest predatory.
I was actively trying to figure out how to establish an earned income from the street. I was being told I was "panhandling the internet" for trying to monetize my websites. I was not being taken seriously. I was not having scads of charity thrown my way. Etc.
Nearly six years of that has convinced me that when people set these ridiculous high-minded standards it's really code for "Fuck poor people" while sounding virtuous.
If you want to proactively offer interest-free loans to poor people through your church, more power to you. If you want to argue with me on the internet about why making loans available to poor people via the marketplace is bad and mean, sorry, not buying it. If all the good people who spouted nonsense at me while mistreating me while I was homeless had actually done anything at all genuinely helpful, my problems would have been resolved substantially faster.
Offer better solutions and watch payday loans et al wither on the vine instead of trying to justify taking yet more away from the already underprivileged.
I used to be poor, I'd much rather have a credit card than need to rely on payday loans, car title loans, or have no access to emergency money at all.
Out of all the issues the poor have, this is a relatively minor one, and frankly articles like this are just another form of virtue signaling. "Oh yes, even though I've never been poor, I obviously know best how poor people should be living their lives, and those expensive credit cards have just got to go..." is how it reads.
Yes, borrowers need more protections (rolling back the changes to bankruptcy law from 2002-4 is a good starting point), but that mythical person who couldn't get to work without using their card for car repairs? That was me at one point.
"than need to rely on payday loans, car title loans, or have no access to emergency money at all"
You'll get no argument from anyone but the purveyors of such predatory products.
But it's a false dichotomy argument along the lines of "you have to overlook all of the evil things Uber does because they're the only option for people going to poor neighborhoods."
The reality is that both of these things are true - credit cards are the best option for emergencies, AND that consumers (not just the poor ones) are encouraged to outspend their means, often finding themselves falling into catastrophic debt spirals.
I didn't bother reading the article, so I can't say whether or not its guilty of virtue signalling. But if it does in fact explain how they "Justified Piling Debt on Poor Customers", it's eminently reasonable to overlook any virtue signalling.
Access to credit, real revolving credit, is a boon to the poor, if you can teach yourself the skills to use it wisely, it can provide that cushion that you otherwise wouldn't have. I literally started over again at 27, with my slate clean by waiting 7 years, then I started fresh with a secured card from C1, and built my credit from there - but at some point about a decade ago, I used one of my cards to put tires on my car, which ensured that I had a functional vehicle to continue to use to work - even though I was not of traditional credit worthiness, that purchase allowed me to keep that job, and gave me the skills to find a far better one later.
Yes, some do fall into a perpetuity trap, but we need to fix the system to allow for an escape for that, not just change the system so you cant take any risk at all.
Emphasis mine; I believe that's the true point of the article. I also believe that banks, and lending institutions generally, as experts in that field (rather than average consumers which should not be expected to be experts in that field) should have a legal duty to the customer to act in the customer's best interests first.
What does this even mean though?
Say I'm getting a loan from a bank. It's in my best interest to get that loan for 0%. But it's obviously not in the bank's best interest.
We could go back to using those rules, the catch is that people desperate for finance will shop around to find a less principled lender, so FOMO leads to acquiring customers who are one bad week away from defaulting.
Late payments: A credit card company might make slightly more money when people pay late than it costs them in servicing and default costs while the cost of the fees alone may exceed that benefit even ignoring the cost of a diminished credit score
Increasing spending and borrowing: A company does marketing that convinces people to spend an amount (either through marketing a new card, a line increase or straight up marketing spend), that nets the issuer $100 in value and creates $30 a month in interest for the customer for six years.
The argument is the same as any other case of information asymmetries that create negative externalities. How should we regulate marketing cigarettes? How should we regulate marketing cotton candy? A purist would argue we ought to tax those activities.
But we've heard countless of stories where banks "rearrange" the order of transactions such that there is multiple overdrafts and thus fees. That is an example of something not in the customers best interest, but designed to suck out as much money as possible.
For example: To prohibit lenders to provide credit if the credit receiver is already so much in debt, that she's never able to service an additional loan?
Or how about capping annual interest rates at 15%? Making everything above that ursury and thus a criminal offense?
Now you may imply that this is the case in some socialist hellhole that hates business and you would be very wrong.
That's the law of the land in Switzerland, which, last I looked isn't exactly hating business.
Whenever I brought up whether the work we were doing might actually be harmful (even as a general question), coworkers would reflexively quip about what they're doing giving back to the community through outreach, or some other vague response that obfuscated the people behind the problems they were solving.
And of course, executives would just spam you with "Change Banking for Good".
I couldn't stand it.
Oh sure, there might be some lost tribe in the Amazon but I don't accept it, even if it is technically long-lived.
Interest is how we pay people to save and share their savings with others. Growth and reinvestment is much easier with it. This is why the Muslim world has come up with financial gymnastics to reward savers without technically paying some interest.
Sorry, what? What does that have to do with anything?
I like to think of religion as early law. Pork was also probably not a very healthy meat to eat at the time. Now it is probably an outdated thing.
Not a great deal for the Jews! Although they were also legally barred from doing almost any other work (they could also be tax-collectors, which was hardly a better job)[1]. But it's definitely not the case that the civilizations of Christian Europe didn't have loans with interest.
This was also largely true in Islamic societies: they did rely on loans with interest, by once again relying on their minority Jewish population to provide financial services. [2] Unlike the Christians, though, the Muslims generally paid back their loans instead of murdering their creditors.
[1] https://en.wikipedia.org/wiki/Medieval_antisemitism#Restrict... [2] https://en.wikipedia.org/wiki/Riba#History
But, it's true, it was not a perfect ban, but it certainly did have the practical impact of not allowing those to whom interest is owed, from hijacking control of the state. Again, not in a good way, but I think it shows that long-lived civilizations eventually find that the Mathew Effect is particularly strong with interest, and must be reined in somehow.
Hopefully in a better way than the medieval Christian one.
In England, Jews aren't consider the subject of the local lords. They're subjects of the king directly so they paid their taxes to him directly. Thus by raising taxes on the Jews, the kings of Englands were able to indirectly tax his nobles (because the cost would be passed on to their creditors) while throwing the Jews under the bus. This is why you see at various times in English history that the nobles call for the eviction of the Jews.
[1] http://www.yourfaithyourfinance.org/money-and-faith/usury-an...
[1] https://www.bibleodyssey.org/en/passages/main-articles/jesus... [2] http://www.yourfaithyourfinance.org/money-and-faith/usury-an...
Historically, intelligent elites have permitted safety valves like bankruptcy and even jubilees. While this does reduce the nominal wealth of the owner class, it has no actual effect on their real wealth since they still own plenty of real assets that can be used to start the next round of interest based rent-seeking. Unfortunately our present day elites present us with evidence that they plan to run the system into the ground and then escape to five star bunkers in a New Zealand. I guess we’ll see how that works out.
That doesn't seem right -- wages should grow with inflation.
Maybe there's a difference between the growth rates of the two, but I don't see how wAge grows linearly.
In the end, wage increases are far from geometric growth.
Sumer? Babylon? (Pre-Islamic) Persia? (Pre-establishment of Christianity) Rome?
Did Taleb say it? Maybe. Is it true? No.
But I'm also a personal finance nerd, so eventually I found myself reading https://www.reddit.com/r/personalfinance/
And then I read different versions of the same story over and over and over again. People with far more credit card debt than they could ever pay off. More than a year's salary worth of debt. People that we just stupid about money, and bought way more stuff than they could afford encouraged all the way by the credit card companies and advertising and keeping up with the Joneses.
So now, from time to time, I sometimes find myself wondering if credit cards should just be illegal. Such thoughts are heresy in my own mind, and I don't know how to deal with them really especially because I know that credit cards have been great for me with my 2% cash back and airline points. And I know that they can be great for people who get into a temporary cash crunch and know how to be wise about such things.
But then I read another couple of pages of /r/personalfinance and I wonder again. Maybe people do need protecting from themselves. It certainly looks like some of the people posting there do.
I find myself very sympathetic to the author's views.
The previous administration passed regulations requiring payday lenders to verify ability to pay before handing out loans, which was promptly crushed by the current admin at the request of the payday loan lobby.
Another solution is to cap the max interest rate far below current thresholds. The problem with these loans is that lenders are hoping you’ll get into debt, they’re in no way trying to create a mutually beneficial relationship with their borrowers.
If your debt load is unsustainable, such that your interest payments are more than XX% of your income, then you effectively already are bankrupt. We can either try to get people back on their feet, or let their debtors grind them into the dirt for a while longer.
[+] More if they haven't worked it a lot internally or if it is sold while fresh or if you look like someone who is extremely collectible but let's say "Typical case for people who are on verge of bankruptcy" pushes you waaaaay down the stack on all possible ways to price debt.
If you believe the first, like you say you do, people do not need to be protected from themselves, as self-inflicted harm is the correct outcome of letting people do as they please.
I think it’s ok for people who make bad decisions to go deep into debt. There’s no debtors prison in the USA, recourse against default on the extreme low end is pretty minimal. It may stress them out (as unpaid debt should, to some extent) but they likely won’t die over it.
There are tons of better ways of getting people to make better financial decisions than sticking guns in the face of lending institutions that choose to do business with them.
There is obviously a need for such a product since it's so popular, but it can't be cheap to manage and collect them especially since they're so small.
I guess I'm an evil executive, because I do think that the default assumption is that people are better with more choices. There are obviously exceptions, but I'd want some evidence to the contrary before I started blaming others for offering them choices. And I'd want especially strong evidence if banning those choices is damn near impossible (since loan sharks will just appear), so that unilaterally deciding to not offer choices makes people even worse off (because they go to the loan shark instead).
I went searching in this article for evidence, but couldn't find much. This seems to be the extent of it (am I missing something substantive?):
> As Scott Schuh and Scott Fulford have shown in a paper for the Federal Reserve of Boston, people who get credit limit increases tend to keep their “utilization” constant. In other words: If a person is carrying a $1,500 balance when they have a $3,000 credit limit, you’d expect them to start carrying a $4,000 balance if the limit is raised to $8,000. If most people use the full credit-limit increases they are offered, the thinking goes, that must mean that most people want to borrow more money.
Isn't this consistent with poor people needing loans, and yet them also wanting to make keep some of their credit limit in case things get even worse?
The author's main argument seems to be that Capital One has a lot of research resources, and if they were making their subprime customers better off they would be able to prove it with data, but they can't so they must not be.
> If [CEO] Fairbank cared to know the answer to any question—such as, “How many of the loans that we give out actually make the borrower’s life better?” or “What are the consequences of raising our credit card interest from the prime rate plus 19 percent to the prime rate plus 23 percent on child hunger in America?”—he could have gotten thoroughly researched answers. But those are the kinds of questions that the entire Capital One workplace was designed to drive out of view.
The author concludes
> When I was at Capital One, I wanted to understand if it was possible to keep loans as an option for the people who have exhausted all their better alternatives—without also causing suffering for those who would be better off forgoing purchases or borrowing money from friends and family. After five years, I concluded it was more or less possible to achieve that goal—to do the good loans without doing the bad loans.
But I can't see why she thinks that.
The problem is that the default assumption is not a universal truth. It's a rule of thumb.
If someone is in bad financial shape and I offer a loan to them, they'll probably take it because they have immediate pain that they want to fix. They are not likely to consider that the loan may ease their immediate problem, but will cause the problem to come back, but worse, later on. This is basic human behavior -- we care more about what is real right now than what will become real later on.
Lenders, however, know this (or should), and to give such people the "choice" of making their situation worse later on in exchange for temporary relief right now is simply inhumane. I don't think it's unfair to characterize that lending behavior as "predatory".
- People can have bad or incomplete information: misleading advertising, lack of expertise in every subject area that affects their decisions, etc.
- People can lack freedom to act: monopolies, lock-in, etc.
- People can have their rationality itself undermined through desperation, emotion, or addiction
Some of these problems have been patched over with laws. False-advertising law, nutrition labels, terms/agreements. Many have not. The third, and to a lesser degree the first, are the most relevant to the OP.
Rational actors and own-self-best-interest isn't about common, specific, long-term positions that an entire population might share (like increasing debt load is bad, or that having the most cash saved is good), only that the choice of price is set based on a number of variables, both internal and external to the actor. A desperate buyer might set their offer price high in order to attract sellers when there are none, despite not being able to pay (which is handled, positively or negatively, in other ways). A desperate seller might set their ask price really low because they have to get rid of inventory. Getting something "for a good price" is about the utility that comes about from having the exchange takes place vs not having the exchange takes place and each party being worse of. An addict might not be making the best decision for themselves and their livelihood but is making a rational decision if their goal is to get high.
But hardline capitalism isn't necessarily the thing we want, because of the chance for abuse of the information asymmetry and that, while everything is encoded in the price, extracting and understanding those details and position of the other side is impossible.
2. You did not address my point that if there is no way to stop people from getting illegal loans (loan sharks), it's better to give them loans at the market rate rather than the even higher rate loan sharks must charge because they operate outside the law. This consideration is very similar to legalizing drugs.
I don't think this is a good argument at all. In both instances, vulnerable people are being hurt. Arguing that it's OK for you to hurt them because you'll hurt them less than the other guy seems dubious to me.
Suppose it were unambiguously clear from data that (1) society as a whole and each individual were better off when marijuana was legal and tightly regulated; and (2) individuals would be better off not using marijuana. Would you then vilify marijuana providers? (I generally would not, although I would hold them to a stricter moral standard than I would for sellers of products that are generally beneficial to the user.) What if we replaced assumption (2) with assumption (2')?: 80% of individuals who use marijuana are better off (say, because they use it only socially and the negative motivational effects turn out to be small), and 20% are worse off (because they abuse it).
Any loan that carries interest in its terms is, by definition, predatory.
I think the problem comes when you are giving loans (and particularly high interest loans) to people who have little to no hope of being able to repay them.
>But I can't see why she thinks that.
The answer, which is this clearly the author's position, is self-evident if one moves from assessing the situation from the profit-motive lens: a stop to the practice of predatory lending.
Earlier, the argument was "Isn't this consistent with poor people needing loans": they don't need loans, they need a livable wage (which I know is a whole different story so won't go into that), but since they can't don't have a livable wage, they need financial support to tide them from non-livable paycheck to non-livable paycheck, that does not cost an arm or a leg, as they make sacrificial decisions as to what to make do with/without.
The argument that people are being given more choice is a lie - there is literally no choice here.
The lending is literary predatory as it is i) from a lender of last resort and ii) comes with interest and fees that would be intolerable to anyone with options.
Non-predatory lending is just one part of what the writer describes as ".. do the good loans without doing the bad loans."
... on the one hand, I want to yell "Strawman!" "Strawman!" "Come out and see the Strawman!" from the hills but I do not want to come off as aggressive or preaching ...
The point you make here is certainly true but it is neither the point of my argument or the point of the author's piece.
I guess there is no way to receive satisfaction here.
That said, I largely agree with your sentiment that the article doesn't provide sufficient quantification. You also might want to consider that the author might have experience seeing that quantification and making decisions based on it that can't be shared in The New Republic without violating confidentiality agreements.
One lens through which to view this: Is a culture that tends to view its customers as mathematical entities likely to make the best decisions either for their customers or themselves? That's the real tragedy and is half of the explanation for the paradox that such genuinely intelligent and kind people do things that hurt others (and in some cases themselves).
Disclosure: I also worked at Capital One and briefly encountered Elena there
The Mortgage Bankers Association defaulted on its own mortgage while trying to ban personal defaulting.
https://en.wikipedia.org/wiki/Mortgage_Bankers_Association
Personal bankruptcy rights has been consistently er
Was there more to your post?
This is a hilarious example. Also, bankruptcy exists for a reason: the injustice of debtor's prison.
Student loans should also be discharged in bankruptcy.
That would kill student loans because most students would declare bankruptcy as soon as they have graduated.
Oh nvm, it's a Capital One employee. False alarm.
Tuition has gone up even in public schools. Unless the student finds a good paying job after graduation they will struggle with student loan payments.
> The rise of data science, machine learning, and artificial intelligence means that you don’t need venal corporate tycoons wearing Monopoly Man hats to grind the faces of the poor into the dirt. Under the data-driven directives of Capitalism 2.0, you can have a bunch of friendly data scientists who don’t think too deeply about the models they’re building, while tutoring low-income kids on the side. As far as they’re concerned, they’re refining a bunch of computer algorithms.
Let us all remain vigilant that the puzzles we solve in code are actually solving problems, and not creating them.
I wonder if ever in history there was a time when we needed to kill people faster and set our engineering minds to solve that problem. Would there be any lessons to learn we could apply to our current problem of automated human life destruction.
I just can't believe there are human beings who would actually write that code!
Edit: Clarification, Yes, robots that kill automatically with no human intervention. Programmed to seek and kill the enemy.
Robots are different.
A person designs a machine gun but does not pull the actual trigger. There is an army officer that orders the weapon be deployed and the rules of engagement for when it can be used.
A person designs a killer robot but does not activate it. There is an army officer that orders the weapon be deployed and the rules of engagement for when it can be used.
There is always a person that is responsible for the use of a munition. Maybe that person is higher up the chain with a killer robot than a machine gun. If you want to launch a nuclear bomb then it goes all the way to the top of the chain. But there is always a person that is responsible for the death caused by the munition.
I'm not endorsing this, mind you, but it's not really any different that what we've been doing to each other for millenia.
Basically, drop the robots in and let them start killing by whatever algorithm has been programmed into them.
I was out with a bunch of friends who worked for Northrup Grumman and I was like, "Why do you guys work there building things designed to kill people?"
Synchronized response: The money is good.
It has to be because many people wouldn't work there.
In the case of killer robots, the engineers are not (outside of a test gone wrong) going to be realeasing the robots themselves. They are going to be giving them to the military, where officers create and load particular configurations then release the robots with that. These are the same people who current create orders release frontline soldiers to execute said orders.
Only some of us are sociopaths (a lot of people in tech, sadly), but most of us just compartmentalize and rationalize, with a special pitfall for the math-oriented is the truism that technology doesn't have moral implications in and of itself, just the uses to which it is put. The last is one of those things that people never bother to justify, they just think of it as an obvious implication of a impenetrable division between abstraction and the material world that is nevertheless marked by humans shuttling information between the two. To me, thinking of people this way is just warmed-over dualism.
If you introduce a technology into the world, you have to consider the possibilities every type of person with every possible aim having control of that technology. Not doing this is simply not scientific.
> Of course if one takes that as an ethical principle then obviously it can serve as a license to do anything at all. "People will be murdered; if I don't do it, someone else will." "Women will be raped; if I don't do it, someone else will." That is just a license for violence.
> Other people say, and I think this is a widely used rationalization, that fundamentally the tools we work on are "mere" tools; This means that whether they get use for good or evil depends on the person who ultimately buys them and so on.
> There's nothing bad about working in computer vision, for example. Computer vision may very well some day be used to heal people who would otherwise die. Of course, it could also be used to guide missiles, cruise missiles for example, to their destination, and all that. You see, the technology itself is neutral and value-free and it just depends how one uses it. And besides -- consistent with that -- we can't know, we scientists cannot know how it is going to be used. So therefore we have no responsibility.
> Well, that is false. It is true that a computer, for example, can be used for good or evil. It is true that a helicopter can be used as a gunship and it can also be used to rescue people from a mountain pass. And if the question arises of how a specific device is going to be used, in what I call an abstract ideal society, then one might very well say one cannot know.
> But we live in a concrete society, [and] with concrete social and historical circumstances and political realities in this society, it is perfectly obvious that when something like a computer is invented, then it is going to be adopted will be for military purposes. It follows from the concrete realities in which we live, it does not follow from pure logic. But we're not living in an abstract society, we're living in the society in which we in fact live.
> If you look at the enormous fruits of human genius that mankind has developed in the last 50 years, atomic energy and rocketry and flying to the moon and coherent light, and it goes on and on and on -- and then it turns out that every one of these triumphs is used primarily in military terms. So it is not reasonable for a scientist or technologist to insist that he or she does not know -- or cannot know -- how it is going to be used.
-- Joseph Weizenbaum, http://tech.mit.edu/V105/N16/weisen.16n.html
edit: oh well then. Your comment reminds of this dude living in $town who was later found to have done this weird thing. Good talk.
You can't.. the human mind simply can't understand every type of person or even 90% of every type of person. If this is a requirement for advancement nothing would ever get done due to the complexity of this part of the problem alone.
> with every possible aim
Again, we are limited beings this is not possible.
> having control of that technology. Not doing this is simply not scientific.
I'm going to disagree with your use of the term 'scientific in this case. The creation and use cases are entirely different steps in development.
The onus is not on the creator but the user. This is basis for modern law in the society we live in, we collectively choose to put this on the ' scientific community ' development will happen elsewhere and the moral civilization while nicer will remain in the stone age where it belongs.
One person writes calculate_attitudes(person)
Another writes calculate_abilities(person)
Another writes calculate_desirability(person, calculated_attitudes, calculated_abilities)
Another writes determine_spatial_location(person)
Another writes parse_list_of_protected_persons(whitelist)
Another writes move_to_safe_vantage_point(drone, picked_target, whitelist)
Another writes aim_cannon(cannon, spatial_location)
Another writes fire_cannon(cannon)
Another writes determine_witnesses(spatial_location, timestamp)
Then you just feed witness_person, witness_attitudes, witness_abilities into calculate_desirability, and loop it forever, killing the least obedient n%. No involved person really did much, or even anything, as far as they are aware.
Especially since you can, as Joseph Weizenbaum -- the one person HN really should know, but really doesn't -- pointed out, design/build/train those algorithms and machines with all sorts of rather benign stuff. E.g. you train for finding missing persons, but then you can also just feed it names and photos of dissidents instead of missing persons. The people "refitting" may know about the people who build them in the first place, but not the other way around.
The survival of humanity has escaped ALL tribal boundaries. The human beings with the most power are the ones contributing the most to our assured destruction.
It's basically inevitable. I am not a religious person, but ... has this happened before? Have we destroyed ourselves before?
On another planet? Millions of years ago, before the dinosaurs? How could revelations have predicted it so well thousands of years ago, hundreds maybe, before there was any evidence all of this would be happening right now.
Lots of religions have these stories about ourselves destroying ourselves and our planet. Indian religions describe it too I know for sure. Battles of the gods in ships with laser like weapons.
It's like we are uncontrollably, knowingly, ... desiring of self-destruction as a species.
Why are we like this and how do we change us?
Maybe I'm insane.
> It should be noted that no ethically-trained software engineer would ever consent to write a DestroyBaghdad procedure. Basic professional ethics would instead require him to write a DestroyCity procedure, to which Baghdad could be given as a parameter.
-- Nathaniel Borenstein
> Why are we like this and how do we change us?
Don't take this the wrong way, because I totally "feel you", to put it briefly, but my first thought is, there is no "us":
> When all are guilty, no one is; confessions of collective guilt are the best possible safeguard against the discovery of culprits, and the very magnitude of the crime the best excuse for doing nothing.
-- Hannah Arendt
For me it's important to not forget that sociopaths are weak rather than strong, and bluffing rather than laughing. Outside of forms of communications they can dictate and manipulate, that is, without some form of violence or dishonesty, on their own and as themselves, they have nothing, and can be made to implode rather easily. A murdering SS officer is not what sums up this phenomenon, Hitler, in his bunker, blowing his brains out, after blaming everyone with words that are obviously garbage once the claqueurs are gone, is.
No, I'm not saying I'm innocent and others are the sole source of evil. But we're still not all the same, it's a spectrum and we're not all in the same spot, and I reject that it's some "average human" doing everything. That's an abstraction, only the actually existing individuals are real, and the worst thing that can happen is not resisting and realizing it was "in vain" (and it never is when it comes to what it makes you as a person), the worst thing that can happen is that we realize we fell for rather mediocre people who faked it until they made it, and that we could have resisted easily (in comparison to the titanium steel gravity well humanity would be in then).
Every technology not forbidden by physics is inevitable. If somebody else is going to get a powerful tool to use against me, I'll damn well make sure I have that tool too. And if I can, I'll get it first.
You want safety from killer robots? Make more and better killer robots than the other guy.
You know what those robots can't do? They can't rape the enemy. They can't kill their superior officers, traffic in or get addicted to drugs, and ideally, they won't be killing anyone but their target. They can't be made prisoners of war and tortured, and they can't really be hostages, either captured or because of proximity to the combat theater. If the robot is destroyed, you don't need to tell someone's mother their son isn't coming home. It may even stop wars because the other side is only destroying materiel that can be replaced instead of lives. A deterrent.
I know the negative arguments against them very well, and I also agree with them; you can't do this because it can and will spread and it makes killing much "cheaper" for the same reasons. But why is it so hard to imagine why people would write that code? It's really the same reaasons why people here love self-driving cars; to remove human error that causes waste and death.
That sounds like a feature, but it has a very important downside.
One of the biggest reasons that politicians hesitate to send in the troops is for the very reason you mention. Killing from afar with no accountability or political downside is a recipe for permanent warfare. In fact, there is a significant upside to them from the defense contractors.
You could argue (and many have) that we have already seen the start of this with the US drone program.
But why the hell does debt have to be the only way of creating money is totally beyond me.
Debt always needs to be measured against the value of brings. Does the interest make up for the value you were able to generate today and throughout the lifetime of the debt repayment?
IMO, there is good debt and bad debt (and a gray area in between). My personal rule of thumb is, does that debt render me revenue above the monthly repayment and will it do so through the lifetime I hold it? That is good debt. The rest is bad.
Now, you can argue that other debts provide more than monetary benefit. That is where the gray area is. That is a personal decision.
Good point. As a thought experiment, can you answer why the larger project costs more that what an average person can already afford?
As it applies to new real estate specifically, you have a lot of materials, labor taxes etc to deal with. These are the most common sorts of business debts that I've been exposed to.
For existing real estate, I see value of things going up in value largely due to population increase in a certain area combined with the fed printing money (which it claims to do so constantly because the population will always be increasing?). I also see values wildly inflated due to foreign investment. A big issue in general is also due to the banking sector. I think the US government allows banks to go a little crazy with lending to everyone on anything without recourse. That being said, I personally benefit from the system allowing me to borrow money so cheaply.
Sorry if this post was a bit disorganized. I have a lot of thoughts on it and it is a great thought experiment. :)
What do you think would happen to the prices of materials, labor etc? Do you think tying money supply as a function of labor would make cost of necessities close to the median?
However, I'm thinking more along the lines of production. So if an individual/company produces more units of something, the FED could print that much money and put it into their accounts directly.
With expanding society, more money will be brought into circulation.
With lesser production, lesser money will be matched and produced by the FED.
The consequence of this would be that there is incentive to produce more with less. There will be more value for physical labor and that the rich would suffer as much as the poor. Hoarding money at the top will just result in lesser and lesser money being produced for the rich to earn.
Now you could go and take a loan if you wanted to. But not from a bank. Take it from any other party. It's between the two of you and you both go bust if the loan fails.
There are caveats here but what it removes is the creation of money by debt. Thus, to be richer as a civilization, we don't need more debt as a society. We need to produce more goods and services that are actually desired by others.
How does the FED determine the value to give each corporation relative to other services provided to the market?
It's an interesting idea if that's what you're thinking, though I foresee a lot more government overhead.
Correct me if I'm misinterpeting. I think I might be.
As company gets more and more efficient, they wouldn't need employees. But this would cause lesser money to be brought into circulation, thus eating up the companies earnings itself.
If the company wants more debt, they can go borrow from others (rich institutions, individuals etc) but this activity will not create new money. Thus, total money in circulation remains the same.
If an individual wants to buy a house, the house price will effectively be closer to the median affordable income of population. Thus, it will incentivize individual to produce more goods and services to reach median income at least. The only way to become richer is to produce more.The rich can try to buy more houses but it wouldn't be possible as much since leverage and speculation is much harder.
We have empirical data on what happens in such worlds: economies tumble into recession and there is mass unemployment.
An economy where new business formation is radically more difficult so the economy is far slower to adapt so there is mass unemployment and human misery.
Go talk to someone who actually runs a real business. Especially a business with capital costs. Ask them if they could run it without access to credit. The answer is no.
Why would capital requirements for capital intensive businesses be so high when the equipment they are trying to buy will be cheap?
If they need to buy lots and lots of equipment right now, they could issue a bond, investors looking to make a dime will lend. Since inflation is low because of no speculation, interest rates would be low as well.
The one big caveat I see is slow growth but that's exactly what I'm looking for. Slow sustainable growth directly proportional to labor.
Try buying a piece of heavy equipment that costs a quarter to half a million dollars. Every logging contractor or construction outfit I know is mortgaged to the hilt, one or two steps ahead of their payments
You're missing the forrest for the trees with all your handwaving about the money supply.
Houses are big and expensive and sit on land that is in finite supply (especially in high demand areas). People are generally a lot better off if they can pay this purchase off over time while living in it rather than saving up to pay for the whole thing all at once while also paying to live somewhere else.
That works both ways though, the reason housing is so expensive is because borrowing is so cheap and easy. The cost of land, materials and regulation has expanded to match the available funds.
But the ratio of the cost of a house to a person's labor will stay constant.
You give an equity stake in your project to the person/entity that gives you the funds.
Insurance or collective money pools are much better for emergency issues if they are not incentivized to profit off of its members.
Emergencies (if defined as unexpected events that have a high enough cost that a person requires debt) are things that people with fewer resources have exponentially more often than people with more resources. Emergencies, especially incompletely serviced, also tend to lead to further emergencies, and very quickly servicing the debt becomes the emergency.
This guy doesn't like the concept of credit cards. That's all this boils down to. Instead of making a detailed structured argument about what he feels the problem is, he tells a couple anecdotes about times credit cards didn't work about for people and about his personal feeling that credit cards aren't that great.
Ok fine. But then what's the takeaway? Not that there is any structural problem here or that something needs to change but that credit cards make this guy feel bad.
This kind of personal therapy masquerading as systemic or policy critique does nothing but rile people up with vague sentiments and directionless anger. It's a net loss for everybody involved.
For the record I'm not some kind of bank apologist, but the fact that there are serious structural problems with the way banks operate in the US makes this sort of infectual critique all the more frustrating
Get over yourself-- and good luck finding a job where you're not pandering to someone's needs and then exploiting it to make a living.
because if not, then you acknowledge there's an opportunity to charge a teeny bit less, and maybe not move in to an uber chic building, to completely maximize potential profit according to the altar of profit-seeking.
hell, according to this whole "efficient allocation of resources" "hypothesis" we should have long ago arrived at a point where the only way for these poor, poor banks to make a nickel is to massively innovate on risk models, technology, etc. because there's so much money (=> competition) that hundreds of firms are competing by lowering interest rate and there's barely any revenue to be made to pay for things like employees and computers.
so why aren't we there yet?