Realist, not conformist analysis of the latest financial, business and political news

Dear God These People Are Stupid

So, WeWork. Yep, idiot idea badly done. OK, so, what next then?

Particularly after the 2020 Covid pandemic and a new economic recession, WeWork’s nightmarish if relatively short-lived reign hints at what one future nihilistic phase of capitalism could look like if market-fueled economic inequality is allowed to continue to grow unchecked.

Umm, sorry, what? Investors, the capitalists, lost lots of money here. The people who got the money were the people who worked for the company. That’s what business losses mean – the staff are being paid out of the checks of the investors. This is a reduction in inequality. Well, presumably it is, the investors likely being richer – at the start – than the workers.

In retrospect, Neumann’s knack for amassing billions of dollars in venture capital with no viable business model was one of the greatest scams of the twenty-first century.

Scam at least implies illegality which isn’t right here. But yes, transfer of money from investors – which is a reduction in inequality, right?

Just as WeWork successfully milked a stable of venture capitalists drunk on a tech-fueled bull market,

We’re not exactly moving away from this idea of this being an increase in inequality, are we?

WeWork’s investors—and SoftBank in particular—lost billions on their ill-advised bets on Neumann,

Yes, quite so.

but in the grand scheme of what those venture capital firms are worth and what they spend regularly, the money they burned on WeWork is the equivalent of a regrettable night at a casino for you or me—an embarrassing and humbling loss, but a risk that comes with the territory.

Also quite so but it’s not actually that increase in inequality, is it?

The complete untethering of the stock market from the rest of the economy—a phenomenon in the making for decades but accelerating even more swiftly in the wake of the pandemic—portends the widening of an already vast gulf between the oligarchs (currently profiting obscenely from market rebounds) and everyone else.

Now that’s just damn stupid. WeWork fell apart because the stock market – by examining the IPO document – brought some well needed sanity to the conversation about WeWork’s worth. This is a vindication of public markets story here.

In other words, even if WeWork (which now appears to be on its last legs) and other erstwhile unicorns don’t survive the pandemic, their investors and top brass likely will. That’s by design; as economic inequality continues to surge out of control, and climate disaster looms on the horizon, the financial overlords have done all they can to extricate their fates from everyone else’s.

No you idiot. The financial overlords *lost money here*.

Where in hell do they get these people?

J.C. Pan is a staff writer at The New Republic.

Ah, well, yes, should have known, eh?

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Boganboy
Boganboy
4 months ago

They just have to mention climate change. To show they adhere to the One True Religion no doubt.

Spike
Spike
4 months ago

They have blinders on such that the only criterion is: Whom do we want to win and whom do we want to lose? (The Rich, coz if they eat less filet mignon, it will appear on my plate). The correct criterion is: We want everyone with a new idea to be able to try to implement it to see if it improves our lives.

TD
TD
4 months ago
Reply to  Spike

But isn’t enabling anyone with a new idea to try to implement highly inefficient when we already have Obama, Gore, Sanders and Warren who know exactly what is needed?

Spike
Spike
4 months ago

PS – A noted basket of US shares has reached $30,000. The only change amid the last two weeks’ explosive price surge is a greater certainty that Biden will become President. This certainly does not portend a better business environment, and it almost certainly does portend government spending even more reckless than Trump sending us checks to tread water during Covid.

So investors are not saying they esteem shares, but disparaging the $30,000.

Barks
Barks
4 months ago
Reply to  Spike

Not a better business environment in a rational sense but the market does like the idea of the federal government splashing money around willy-nilly.

Spike
Spike
4 months ago
Reply to  Barks

Indeed, investors got $1,200 Covid-19 compensation checks, like everyone else, and said, “I’d better spend this while it’s worth something!” But it will lead you to wrong conclusions to believe the resulting higher prices mean we “like” this process or even the stuff we bought.

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