$4 toast: Why the tech industry is ruining San Francisco
venturebeat.com
venturebeat.com
Valuing toast especially highly is not the problem with the tech industry.
The problem is inequality. While tech generates huge returns for investors people in tech will earn a lot. What needs to happen is that money paid needs to be spent - on toast or anything really - rather than being further invested. By spending, money moves around the system, gets taxed, gets redistributed between everyone relatively fairly. If tech workers earn more than they can reasonably spend then they end up investing it in houses and companies, meaning the money stays with the few and pushes the poles apart - the poor get poorer and the rich get richer. That's the problem.
If everyone bought $4 toast then all the coffeeshop workers would earn more and the tech workers would have less to spend on houses. That would be a good thing.
I'm not saying that all of Silicon Valley is producing worthless stuff. I'm saying there is a distortion on the market caused by "free money" (compared to money that has to be saved and withdrawn from others, less profitable activities). Without it SV would still be a great and pricey place, but not hugely at the expense of everyone else like it is today.
PS. Before we start a flame about "crazy libertarians", consider what's more crazy: me questioning Fed's policies, or the fact that war in Iraq costed $6 trillion and killed 1 mln people (http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War). That wouldn't be possible at all if the Fed couldn't create money out of thin air. Once you deal with morality of this situation, only then please criticize me about my opinion on QE and other monetary policies in general.
The 1%, the poor, the black, the racists, the gays, the Jews, the immigrants, the socialists, the liberals, the neo-cons, the Kochs, the healthcare cartels. Everybody's at fault.
Then, you ignored the fact that existing Fed policy made possible murder of 1 million people over several years at a cost of $6 million per person. There were no taxpayers or private investors who'd save that much money to invest in a large scale murder operation. It was all possible because of Fed, legal tender laws and tons of regulations that make sure people have to accept USD as money. I think it is important to understand that to see the power that the Fed has and how much lives are affected by that power. It just gives the proper context.
Excess liquidity reduces the scarcity value of money, and results in lower quality thresholds for investment decisions. Thats pretty simple. If you want to debate about liquidity, you need to look at who invests in the investors. That is the place to measure liquidity that is relevant to distorting investment decisions. In the case of non-public equity...its pretty clear VC lps have too much cash. The Kaufman fund does research in this area and blames poor LP performance for the below-RAROC returns on VC portfolios when considered as an asset class. That should tell you something right there.
No offense but that's just naive and wishful thinking. Instead, the increased prices would inflate corporate profits even more without having any impact on real wages: http://www.usatoday.com/story/money/business/2013/05/05/wage...
Consumption simply does not reduce income inequality. All it does is reduce wealth inequality (since a dollar spent is a dollar not invested) while increasing consumption inequality. And consumption inequality is what most of the anti-tech activists are complaining about.
Sure, but that's based on what you earn. If you earned a quarter of what you earn now, would it still be worth 4 dollars? Plus, if everyone bought $4 toast, the cafe's that cater to the wealthy would soon have $8 toast.
Here in Moscow, toast with coffee might easily run 10$ and that raises no eyebrows.
Coffee and some good toast at a nice Cafe in Brisbane (Australia third largest city) would also run around $10.
This is why you can pick almost any suburb in America and see middle-class folks with giant houses filled with two cars and a mountain of junk made in China.
Not sure where the writer is coming from - goods and services will cost more than the sum of its raw materials, news at eleven. He complains about the settlers eating toast and it not costing as much - sure, if you make your own toast, you won't pay as much either. No settler had even the option to just go out and buy toast and coffee.
Call me a socialist, a hippie or whatever but fair trade isn't something meaningless.
In many cases, growers can make three or even four times as much per pound if they don't sell within their Fair Trade contracts. This is like a Blockbuster clerk being able to earn more cash if he just takes all the videos home and charges admission to his living room.
For a nonprofit organization working to combat the exploitation of impoverished countries, the FLO makes a rather tidy sum from licensing fees. For every pound of Fair Trade coffee a retailer sells, they have to pay the FLO 10 cents -- that's like Drew Rosenhaus collecting 50 bucks for every Terrell Owens jersey that gets sold (this is hypothetical -- we are well aware that no Terrell Owens jerseys are being sold).
In 2009, the FLO had a budget of $10 million, 70 percent of which was funded entirely by those fees. In short, the anti-exploitation organization is using Third World coffee growers to generate revenue, which as you may notice is very nearly the literal definition of exploitation. This has led many in the industry to argue that the FLO exists primarily to market Free Trade coffee, rather than to protect the interests of growers. This is the same relationship that Disney has with children.
On average, retailers are charged 65 cents more per pound of Fair Trade coffee. That might not sound like a lot, until you remember how retail markup works. Take a look at the $1.40 that the growers sell their beans for, and compare that to the $9 or $10 you pay for a pound of decent, non-Billy-Bob-Thornton-poop coffee. That's a 700 percent increase. If the retailers are being charged 65 cents more on average for that Fair Trade label (almost an additional 50 percent), then you can guarantee that's going to mean an additional 300 to 400 percent price increase for you, because retailers need to have a large enough markup to make a worthwhile profit. Otherwise, they'd just filter day-old coffee from the break room through the manager's sock, call it something with "Nicaraguan" or "Colombian" in the name, and sell that to you.
Am I missing something then? I don't understand why these coffee growers wouldn't be doing so.
£3 should definitely buy you a semi-decent coffee though:
http://www.londontoolkit.com/blog/eats/coffee-shop-chains-in...
In Stockholm you can pay $6 for a cup of coffee alone. Ok maybe not cup of black coffee but $6 for a cup of cappuccino is no problem.
Overall, the prices in the US for many commodities and services are ridiculously cheap compared to many European countries for example. And don't get me started on the gas prices...
You can't get a coffee and a toast in a cafe for $6 in my home town (in Europe). You'll be paying $8 to $10 at least.
No, Hollywood decadence is accepted, but you get techies with a small salary multiplier and people get upset, you have the 100 to 10,000 (income) multiplier in Hollywood and that's quite alright. I don't quite understand the incongruence.
We are in a world with resources diminishing and a jobs market decreasing.
Artisan style products are our best bet at keeping it at bay for a while.
People earn $x. They spend it on products. $x worth of fancy bread style thing vs $x worth of plain bread style things, I'd guess the plain bread uses more physical resources.
Take shoes : a man could buy only 8-10 pairs of really good shoes throughout his entire adult life and be set. Of course, those would be $500 high-quality shoes (not random 'designer' shoes). Or he could buy 60-80 pairs of cheap crappy shoes that quickly wear out and become painful to wear, and are not worth maintaining since they're so dirt cheap.
Then the high quality shoes are probably made by a craftsman in the U.S. instead of an exploited worker in a third world country, so that's a more fulfilling job. And you don't have to transport the shoes across the globe on gigantic boats, so that's another eco-benefit.
And I don't think it's at all fair to say small businesses languish as a result. Small businesses are booming by providing these things.
Opera is, comparatively, much more different than pop music than, say, comparing a cheap $1 toast from a $4 one.
And maybe, just maybe, you'd find that you liked some of them.
Come to my house sometime. I'll bake a fresh loaf of buttermilk cheese bread, toast it, and slather on some butter or cherry preserves. If you think the resulting experience is "vacuous" then I'll buy you a loaf of Wonder Bread to take home.
Except for the little fact that high end toilet systems are already a thing in places like japan. (See Toto's offerings)
And you see this in much worst from in India, China. Luckily these place have many other areas or choice for the "poor" to choose from.
Another example would be Hong Kong. Where NO ONE could afford to buy a flat. I would love to see Rent compared in SF and Hong Kong.