The United States

A Response To ‘Being The United States of Idiocracy’

I recently wrote an article titled Did We Just Become The United States of Idiocracy?, which was published both on this site as well as Business Insider.  It is a poignant piece, treading lightly but on a topic that should be worrisome to Americans- the private investment sector giving more attention and money to trivial products and companies while education and healthcare continue to wither on the vine.  Here is thought provoking comment from a Business Insider reader I felt would be great to share.

Interesting article. I also have marveled at the amount of talent and energy being thrown at really trivial things involving the Internet or mobile phones or other toys. I attribute this to the precarious imbalance between investors and producers. The investors have never held so much power and been so dominant in determining the economy. Yet, that is an unstable position, since it is producers that are the real source of power and activity. For example, young working people are producers – they don’t have money to invest. People on pensions are investors; they don’t produce anything but live off of the production of others. The people in the streets in the Arab countries and Greece are the producers of those countries, and the power they are fighting is the investors.

Investors add value to a capitalist economy by directing productive activity in an efficient manner. The current world imbalance consists of a very large amount of investment capital, which is remarkable already, but even more remarkable for the stupidity of that capital. Capital is managed for the good of society not by a dictator but by the risks of investment. But our Fed in its infinite corruption has decided on a new mandate that no investor should ever lose money, no matter how stupid or inappropriate their investment.

Thus the fools who lent Greece money, which is a purely absurd loan that deserves to lead to poverty for whoever approved that loan, these fools will be bailed out. This makes today’s investor class the stupidest of such that have existed in recent history. There is no possible penalty to risk; the Fed has stated a world-wide policy of Too Big To Fail which seems to include all investors and all investments in its complicated web. Thus the traditional positive contribution of the investor class has flown out the window. Rather than rational distribution of production, they now produce irrational and foolish distribution of production. There is no down-side to risk, all risk is good risk, all investors big enough always win as the Fed bails out the stock market, the sovereign debt, the big corporations that have failed such as GM.

Net result is an entire generation creates silly toys for mobile phones or new Facebook games rather than productive work that could be of benefit to the general public or mankind. The interesting byplay is that the producers of the world are going to war with the bloated investment system, and that is World War III. It is not between countries, but between the controllers and the controlled.

The world of VC and startup is sort of a place where producers are lulled into collaborating with the world’s enemy, or at least their own natural enemy. VC is evil. It isn’t shades of gray. There isn’t a compromise. There isn’t a way you can enjoy being productive and the fruits of your labor and still get along with an investment system gone pyscho. That’s what this generation will need to work out. There is no compromise with evil, one must oppose it.