New York just raised the minimum wage to fifteen dollars an hour. So, Republicans immediately blamed all of Manhattan’s shuttered retail stores on higher labor costs. As if those empty store fronts popped up in January of 2019 right after the minimum wage jumped to fifteen.
The GOP says nothing about greedy landlords raising rents for more than a decade and forcing mom and pops out of business. That’s why store fronts are empty. But the GOP blames labor costs, because Republicans have always hated the minimum wage, they have always hated unions, they have always hated labor, because they hate Americans, they hate people because they hate themselves.
When you talk to a Republican, they will justify their iteration of capitalism with, “Socialism doesn’t work because people are inherently bad.” No. You’re bad. People are inherently good. You’re bad. Your wife is bad. Your children are bad. Your neighbors are bad. Even your dog is bad. And you smell.
So, the only way the GOP can win is by lying. They must lie about labor costs, because they are in the service of all those private equity funds buying up all the New York real estate and artificially jacking up the price of real estate by not selling. Private equity firms have enough cash, so they never have to sell. Even if nobody can afford to pay them rent, they don’t need to sell.
It’s a business model that’s alien to us because most Americans think you buy a building, and you collect rent in order to pay off the mortgage and maybe even turn a little profit. But that’s not how private equity works. Rental income is inconsequential. If you’re a private equity firm you don’t need rental income . You own the land, you own the building which means there are plenty of tax schemes out there to make it even more profitable for you to leave the storefront empty.
The death of mom and pops in New York City has nothing to do with labor costs. It’s primarily due to greedy private equity firms owning way too much real estate, and deficit financing the destruction of brick and mortar retail.
Labor costs, raising the minimum wage has zero to do with empty store fronts in Manhattan or empty malls in suburbia.
When nearly half this country can’t raise $1,000 without having to borrow it, as Helaine Olen repeatedly points out, it defies credulity that anyone would blame anything on labor costs. To get America’s labor costs any lower we would have to bring back slavery. And fifteen an hour is no balm for the working poor. Crunch it. If you make fifteen an hour, work 40 hours, and you have a child, by all measures you are part of the working poor. Especially in Manhattan. There are those who blame the working poor’s spending habits. I’ll get to blaming the victims in a second.
But first, obviously it’s not just Manhattan. In some San Francisco counties you have to earn more than $100,000 in order not to qualify for food stamps. People earning six figures qualify as the working poor. Because the rent is too damn high. Healthcare is too damn high. Daycare is too damn high.
Granted, we’re talking about San Francisco and New York City, where costs are notoriously high. But if the richest cities can’t fix income inequality then imagine what it’s like in places in Iowa where 40 percent of the people say they can’t afford the essentials even though Iowa boasts the second lowest unemployment rate in the country. We are nation of people who work, not to tread water, we are a nation of people who work to drown in debt. And our drowning in debt? That’s no accident. There are powerful forces within our system, primarily those in the financial sector, who rig the system so ordinary Americans are saddled with massive debt because that’s our financial sector’s business model. Trick hard working Americans into spending money they don’t have so they’re forced to pay biblically usurious interest rates. I’ll get to that later. But first:
Let’s return to those empty store fronts in Manhattan. Wealth inequality starts with income inequality. And the people who own the wealth also own the buildings, and the owners of those buildings couldn’t care less if they’re empty. They don’t need the rental income, because they have the wealth that comes with owning the entire building. They don’t need rental income because they need the tax write off. Or they do need the rent, but, and I think this is more likely, they’re idiots. I think a lot of these private equity firms are poorly run, and just like ordinary Americans these private equity firms are also one financial hiccup away from ruin. That’s one of the big takeaways from The Great Recession. People on Wall Street are morons. Seriously. We’re not talking about Masters of The Universe orchestrating a massive conspiracy to put 99 percent of Americans into indentured servitude.
We’re talking about greedy, amoral halfwits. They’re mobsters, that’s all. And mobsters aren’t smart. They just resort to crime because they were born with the perfect combination of stupidity and sociopathy. They will do anything, find any loophole, to take advantage of people like you and me who are too busy working, raising a family, trying to enjoy life. We don’t have time to understand what every career criminal is trying to do to us. That’s what police, government agencies, and regulators are for. We need to be protected from these people. Which explains why these people, those on Wall Street, loathe the government. The same way Tony Soprano hates the police and the FBI, people on Wall Street hate the Security and Exchange Commission and way more importantly The Consumer Financial Protection Bureau. Of course Wall Street would push this utopian myth about a free market, because a free market means no financial police on the beat to arrest them. Stickup artists hate the police for the same reason Wall Street hates the government.
So no. This isn’t a massive conspiracy hatched by evil geniuses. This is just one financial fraud after another financial fraud committed by lazy mobsters. Never think a private equity firm, or any investment firm is run by a genius. They’re run by slothful degenerates looking for shortcuts. Which is why we need police, and government regulators to reign them in. A person isn’t a genius just because he knows how to break into your home and steal all your jewelry. He’s just a person willing to take the chances you’re not willing to take and break the laws you’re not willing to break. And that’s who comprises America’s financial sector. They are sociopathic idiots who are willing to steal and take chances until they themselves go bankrupt or to jail. If you work in the financial sector, you are either a career criminal or incredibly stupid and have no idea what’s going on around you, or you know exactly what’s going on around you but you want to make money so you’ll keep your head down and do exactly what you’re told and try not to think of the toll your work takes on ordinary Americans, yourself and your family.
So those empty store fronts? It wouldn’t surprise me if the private equity firms who own those store fronts didn’t even know they were empty. Because the people at the top of these private equity firms care about one thing, paying themselves gigantic salaries and then, if there’s any money left over, paying their investors dividends. Whether or not a building in Manhattan is empty amounts to an accounting error. It’s like bending down to pick up a penny. Why bother? Leave the storefront empty. Hiring someone to collect the rent means you have to hire someone to fix up the place and that is a major pain in the neck, because we don’t anything about owning real estate, we’re a private equity firm, all we know is how to raise and borrow money, to buy businesses and real estate, to rack up debt and then pay ourselves salaries. That’s all we know how to do. We’re uncreative idiots. That’s why we work on Wall Street.
Meanwhile the GOP claims to place all its faith into small business. But their definition of “small business” is any startup with millions of dollars from angel investors behind it. Their definition of a “small businessman” is someone drawing a seven-figure salary while waiting for his startup to go public.
But a genuinely small business, one that’s started by a genuine entrepreneur who is investing their own capital, not a private equity firm’s capital, their own capital, a real entrepreneur can’t afford the rent.
So, stroll Manhattan or San Francisco. The only retail businesses able to afford the rent are the chains, the chains large enough to write off exorbitant rent as branding. These chain stores don’t make money in Manhattan or San Francisco. Those stores are their showcases. It’s all advertising. Having a chain store located in Manhattan or San Francisco is a loss leader that tricks tourists into associating your retail chain with “sophistication.” That way the tourists will visit one of your outlets after they return to Branson.
As the Trump investigation unwinds, we will discover that Manhattan real estate isn’t about making money. It’s about creating debt. Nobody makes money, money the way you and I think of money, in Manhattan on real estate. The purpose of Manhattan real estate is to create collateral for rock solid debt.
It took twenty years for the Empire State Building to finally turn a profit. And once it turned a profit it went back to losing money and then began seesawing between profit and loss ever since. But it doesn’t matter. If you own the Empire State Building you can create debt, and debt can be traded on Wall Street, and bundled into securities, and then you can bet on those securities to lose more money or make more money, or simply collect a fee for executing the trading of that debt.
That’s how Trump operated. His buildings lost billions. Jared Kushner’s building on 666 Fifth Avenue loses millions. But it never mattered. They are generating debt, which can then be swapped around the globe. This is why Donald Trump bragged, “I’m the king of debt.” Forget Putin, Donald Trump is Wall Street’s useful idiot.
If you study the beginnings of America, you know that the federal government was established by assuming all the debt that the 13 colonies created fighting for Independence. That was Alexander Hamilton’s vision. Create a national bank, build the country not by creating wealth, build it first by creating massive debt, and then make America the lender of last resort. That’s what made for a “more perfect union.”
Unfortunately, a “more perfect union” doesn’t include unions. Because unions represent people who make money, not debt. I know it’s hard to wrap your heads around this, but you have to understand that debt is an asset that can be traded. It’s better than money, if you already have money. Debt is an asset that benefits those who can afford to buy debt for less than its face value. Unions, labor, the people who actually make things, who do things, they don’t benefit from debt. They are slaves to debt. They only benefit from cold hard cash because they need it to buy things.
Debt, bonds, certificates of deposit, mortgages, even someone else’s student loans or auto loans can be turned into a “note” that the rich can then buy and sell. And the only way to generate more “notes” is by making sure the 99 percent is creating more debt. What keeps this Ponzi scheme going is the 99 percent spending what they don’t have.
It is the job of the American consumer, the 99 percent, not only to buy things, it’s our job to buy things we could never possibly afford so we create even more debt which is then turned into more “notes” that can be traded on Wall Street. Back in 2007, when banks were giving out mortgages to fast food employees, it wasn’t about putting those people into homes, it was about putting them into debt. The debt is what could then be traded.
Mortgages are harder to get these days, but Wall Street is always finding new ways to create debt. And so the retail model for most retail chains is not making money off of what they sell you. It’s making money off the debt they create by convincing you to buy what they’re selling you on credit. Every retail chain wants you to open up a credit card with them, because interest rates can get as high as 24 percent. So that shirt you think you’re buying half off? It’s actually going to cost you 24 percent a year for as long as it takes you to pay it off, which they never want you to do. They make more money charging you interest on that purchase. Which is why Old Navy can sell you a shirt for seven dollars. By the time you’re done paying 24 percent a year on that purchase you could have paid cold hard cash for a really great shirt at Armani. But nobody has cold hard cash. They have credit.
And that is also what kills mom and pop businesses. Unlike the big retail chains, mom and pop aren’t in the credit card game. So they can’t artificially keep prices down the way, say, Banana Republic does by tempting their customers into years of usurious interest rates.
The current system is designed to convince us to spend all our money, ALL of it, and then keep spending more with credit cards. And when we spend money we don’t have, when we put it on credit, that’s the tipping point. That’s when the profits really start to kick in. That’s the economy’s sugar high. Because once you start spending money you don’t have, you’re paying 24 percent a year to service that debt. This is not Adam Smith’s version of capitalism. It’s not end stage capitalism. It’s not the collapse of capitalism. It’s just unregulated greed. Capitalism is when wealth is created by using credit to create money. What we have now is an inverse of Capitalism. We’re witnessing wealth creation by deploying debt to create more debt. Sure, the richest one percent have some cash, but most of their wealth is the accumulation of other people’s debt. This is not Capitalism. This is just perverse.
And the genius of it all, is that when you find yourself maxed out, it’s your fault. Not a system that has been hijacked by well dressed loan sharks who own the regulators.
No, it’s your fault. You’re a degenerate who couldn’t control your appetite, even though your soul was starving, and the retail chains made sure to waft over the phony perfume of spiritual fulfillment that comes with a new shirt or bath salt until you finally cave and put it on your card. Ka Ching! More debt. At 24 percent a year.
Advertising, branding, and social media is designed not to just make you want things, it’s designed to make you spend money you don’t have. You’re not supposed to live within your means. If people only spent what they had then our entire financial sector would collapse. And Americans would have to go back to making things.
But you can’t be told that. So, the GOP lies by blaming empty Manhattan retail spaces on labor costs. Incredible. Absolutely incredible that they can get away with these lies. How do they do it? Well, billionaires spend millions to buy journalists, academics, think tanks and magazines to provide intellectual cover for their lies.
In order to steal from us, to loot our government they must first shell out a few bucks to low rent politicians, pundits and professors who in turn spew out absolute falsehoods about labor costs being responsible for all our economy’s ills.
Once those falsehoods are echoed enough by seemingly reasonable white men in suits, you know someone like coke addict Larry Kudlow, most Americans start to believe the horse shit. And for those who don’t believe the horse shit there’s always the Black Man, the LGBTQ Community or the Mexicans who make us poor. And if we’re not poor yet, there are always the Muslims who want to kill me.
Fact: Supply Side economics doesn’t work for the 99 percent. But if you stand to benefit from trickle-down economics you will pay third rate intellects like Stephen Moore, the chief economist for the Heritage Foundation, or coke addict Larry Kudlow, the president’s chief economic adviser, to insist tax cuts for the rich juice the entire economy.
Most Americans woke up to their lies after The Great Recession. That’s why the GOP has been forced to just steal elections.
Look, I’m no fan of the Democratic Party. They’re only a little bit better. The Clintons and the Obamas inhabit the “meritocracy” wing which plays right into Wall Street’s lies. But in the Democratic Party this is still room for Bernie Sanders, even though he’s technically an Independent. There is still room for Elizabeth Warren and AOC. And that’s why I welcome so many Democratic candidates for president. It’s time to purify the Democrats, the same way the GOP has been purified. We need a battle for the heart and soul of the party. If you don’t believe in the 99 percent, if you don’t support labor, Medicare of all, free tuition at all public universities, then go become a Republican.
But, I like to believe instead of leaving, the Clinton wing will finally come around to turning their party into what it always was meant to be, the party of Labor. Because the Clinton wing is smart enough to know that there isn’t any room in the GOP for intellectual honesty. There isn’t any room in the GOP for fact based dialogue. The GOP is all about saying anything, doing anything it takes to guarantee the richest one percent gets wealthier. That’s it. That’s all they stand for.
Which is why the GOP is the definition of evil. It is pure evil what they do. They work off the devil’s playbook, which explains why they have trouble wrapping their heads around the idea that it’s wrong for Donald Trump to take his marching orders from Vladimir Putin. Your typical Republican can’t understand why it’s wrong to do whatever it takes, say whatever it takes to get your tower built in Moscow.
The GOP is evil. It is evil to work against the interests of your country, the working man, to ignore the fate of our planet, to turn a blind eye to the plight of those who can’t afford healthcare, to cater to the rich and ignore the meek, to gut our public schools, infrastructure and libraries and promote the idea that more guns are the solution to gun violence. This is evil. By its very definition.
And this evil is why the GOP must spend so much time courting ignorant Evangelical Christians and Orthodox Jews who, for a few tax breaks, will grace Republicans with their seal of approval in order to make Republican greed appear biblical. And it is biblical, because it’s Satanic.
So, I’m observing Godwin’s law. Forget comparing the GOP to Hitler. I’m saying it’s time to call the GOP what it is. An unholy owned subsidy of Satan. Let’s pray Mueller, a Republican, can perform the exorcism this GOP sorely needs.
David Feldman Show Daily Blog
David explains why Democrats who oppose Medicare For All are Satan’s limb in this excerpt from the David Feldman Show.
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