Apple – RAnt(hony)-ings

Break Up Big Tech?

I keep hearing that phrase. We need to break up big tech. Today Robert Reich released a video about it.

It is easy to say “break up big tech”, But how do you do it? We don’t want a bunch of balkanized Facebooks that don’t share a common user base. What would be the point of that? Should Whatsapp and Instagram be peeled off of Facebook? Without a doubt. Those purchases should never have been allowed in the first place, and Facebook should be required to open up its API so that outside contributors can get access to Facebook’s user base. But is that breaking up Facebook?

The same is true of Amazon. You could break storage and delivery services up, but then you increase the cost to the purchaser. Is Amazon proving its worth during the crisis? Without a doubt. What people who talk about Bezos’ wealth always leave out is how much he pays himself for his time. $81,840 is his actual salary (h/t to BusinessInsider.com) There are far, far worse CEOs in the world. Truly deplorable people who not only shouldn’t be wealthy, but should also probably be in prison (yes, I am looking at you Donald Trump and all you little Trumps and Kushners, too) The fact that Amazon has increased in value during the pandemic is an economic affirmation of Amazon’s real worth, as opposed to the imaginary value of stocks on the stock market as a whole.

How many CEOs get paid hundreds of millions to run companies that haven’t increased in value by billions of dollars? Maybe we should be looking at taking away their lavish compensation packages. Clearly they don’t deserve the kind of money that they are being paid.

In the same vein with Amazon and are the co-owners of Google. They too don’t get paid lavish salaries. Like Facebook, Google’s parent company, Alphabet, should have its investments put under a microscope, and some of their shadier advertising practices should be subject to fines, because they are already illegal. But how do you break up a search engine and not render it useless for conducting searches?

Breaking up monopolies only works if those monopolies are artificial monopolies. We established this with the breakups that were forced on Standard Oil and AT&T in previous decades. Rockefeller still made out just fine after Standard Oil was broken up, and most of those companies have merged again into the behemoth known as Exxonmobil. Why aren’t they charging usurious prices now that they’ve re-established their near-monopoly status? Because they aren’t the only players on the block when it comes to energy production, and they know they could be broken up again.

AT&T also reformed itself, and few people seem to care or even notice that it happened. Why? Because the problem, the cost of long-distance phone calls, went away with the creation of mobile phone technology.

So what is the solution? Regulation. We need to be writing regulations to guide these internet companies going forward. That means we need a government that functions at the legislative level, and we need a government that can’t be bribed by industry. In short, the average American needs to stand up and make government pay attention to them and not pay attention to the companies waving dollars in their faces. Replace the representatives that have been shown to be too easy on businesses, that can be shown to be too comfortable taking large sums of money from corporate donors.

We need to institute a standard of employee ownership of every publicly held corporation, ensuring that workers in any company will be paid what the workers think is a fair wage. Completely change the nature of worker/employer relations by giving the employees a seat at the management table. That will help address the problems of homeless working poor.

But we need more than that, too. Rental costs in cities are too high. Property valuations are completely out of whack. As I’ve heard a number of times in my podcasts this week, macroeconomics is broken. We can’t explain what it is we are experiencing as we go through this pandemic, from an economic perspective.

We need to focus on the here and now. How do we keep people in their homes when they have no income and no job prospects on the horizon? How do we keep people fed? Those are the most important questions right now. We’ll get to Bezos and his billions later, he can be assured of that. Let’s deal with the crisis in front of us first. We might need his help with that.

Apple Card

Twelve and a half years after Steve Jobs borrows technology already in use by Palm and Handspring to create the iPhone, Apple has today invented the credit card. Now, some will say, “wait a minute, credit cards have been around for decades.” But that would be incorrect. There has never been a credit card made of titanium before! An actual metal card, not plastic.

TechLead – Why the Apple Card is pure garbage – Aug 21, 2019

I’m kidding. It really is garbage, as the video above goes into. In fact, cashback cards in general are garbage, something he doesn’t go into. Cashback is a gimmick. The card issuers count on you charging things and then forgetting to pay the cards off each month. They don’t make money unless you pay them interest for carrying a balance from month to month.

The solution to the credit problem is not to have any credit cards. Use cards tied to your bank accounts, issued by your bank or credit union (I try to only use credit unions myself) and only use credit when absolutely necessary. Then pay back the entire amount as fast as possible in order to reduce your own costs. If you have to have a card to do certain kinds of transactions, have one card to do those transactions with and then pay that card off before the issuer can charge you for the carry-over balance.

60% of reward cards holders don’t pay off their balances each month. That statistic troubles personal finance experts, because credit card interest rates are at a 25-year high.
NPR

It would really be nice to have enough money (as the youtuber above clearly has) to be able to resist the urge to put essentials on credit. To go on a spending spree and not have to worry about doing without essentials later. If you cannot afford to buy essentials, you cannot afford to have that temptation lying around. Cut up the cards and never look back.

The concept of customers paying different merchants using the same card was expanded in 1950 by Ralph Schneider and Frank McNamara, founders of Diners Club, to consolidate multiple cards. The Diners Club, which was created partially through a merger with Dine and Sign, produced the first “general purpose” charge card and required the entire bill to be paid with each statement. That was followed by Carte Blanche and in 1958 by American Express which created a worldwide credit card network (although these were initially charge cards that later acquired credit card features).
Wikipedia, the free encyclopedia

The US government has taken to issuing charge cards to people who qualify for benefits these days. I’m not sure what I think of this development other than that it is a way to get funds into the hands of the unbanked, a serious problem in poverty stricken areas. And as long as the card only works up to the point where the benefits end, that shouldn’t be a problem. What would be a problem is the government issuing cards that could then be used to tie more poor people to debt that they will never be able to pay off. That would be a problem.

So, there you have it. Apple creates the charge card in 2019, about 150 years after the idea is first proposed in speculative fiction, and about 60 years after the first general charge card is introduced into the consuming population. Just in case you thought Steve Jobs was full of himself when he claimed to create the smartphone. Apple creates Paypal for Apple, joining the leagues of credit card issuers that are only a benefit to the wealthy who can pay their cards off regularly. Charge cards which are just another cross for the poor to be hung on, unless those poor are lucky enough to qualify for government benefits. In which case, track your balance! (the one solid word of financial advice offered in the video) But, you know, shiney new overpriced technology. We’re all excited to see it. Can’t you tell?

A h/t is due to the Economist Radio episode Money talks: From bad to wurst-Germany’s economy shrinks where I first heard of this latest offering from Apple.

Apple vs. the FBI

A backdoor is not required to address the immediate issue of this specific case. What this decision shows is a lack of understanding on the part of the judge, and an attempt to force Apple to do what the US government has tried to get Apple (and all other tech companies) do for the better part of 20 years. Make our data systems less secure in the name of national security. Ironically it is the government that is grandstanding on this issue, not Apple.