Thursday, November 20, 2014

Corporate Colonization: Invasive Species

Most economists and commentators are clueless about the corporate job killing machine
Having worked at 10 major corporations in 24 years, mostly as an IT Consultant, I've had the dubious pleasure of witnessing how the sausage gets made. Back in the 1990s we were told that IT was the career of the future, with "limitless opportunities". When the DotCom bubble collapsed, the future got truncated to yesterday. All of those "future IT jobs" went straight to India. Now this subsequent decade and a half roller coaster has been a continual game of musical chairs wherein each boom and bust cycle leaves fewer and fewer good jobs, not just in IT of course, but in every field. And it's the corporate errand boys who stay who get to lay off their colleagues and pretend that they won't be the next ones on the firing line. The water mark of corporate stooges keeps rising higher and higher. Soon they will put everyone out of work, including themselves, it's merely a matter of time.

Musical Chairs Visualized:
Corporate Profits versus GDP

And because one company's costs are another company's revenues, the inevitable stagnation of revenue could only be made up for with Central Bank provided leverage, on an ever-growing scale. In lieu of revenue growth, companies turned to "leveraged recapitalizations" to pay for special dividends and stock buybacks. Central Banks have become the handmaidens to the obliteration of the Middle Class. 

Meanwhile, it's an established fact that small businesses create more jobs than large corporations on an aggregate basis. So Central Banks have been subsidizing major corporations which have been decimating small businesses using their scale advantages, cost of capital advantages and Third World outsourcing advantages. 

What's my point? My point is that these limitless growth marketing shells known as multinational corporations are net takers from a balanced economy. They only thrive in an imbalanced economy up until such time as they have fully cannibalized it and left behind the empty husk. They contribute to supply but are net extractors of demand. Corporate colonization is the virus feeding on the carcass of the world economy. In the real world there is no such thing as limitless growth. 

Something to think about for next time. If there is one.

People ask me - what would it take to make me "bullish"?  

Collapse. And nothing short of it.