A couple of days ago, Microsoft announced 9,000 layoffs across its global workforce, impacting its engineering, Xbox, sales, and management teams. This move also affected various initiatives, resulting in the cancellation of at least three Xbox games, job cuts across various studios, and even the shuttering of one game studio, The Initiative. In the wake of this dark day in the the tech industry, a tone-deaf Microsoft executive urged laid off workers to turn to AI tools for emotional support.
↫ Usama Jawad at Neowin
These corporations are raking in massive amounts of profit, they’re doing better than ever, the cup of money runneth over, and yet, they keep laying off thousands and thousands of people almost every few months. The incentives in modern-day capitalism clearly aren’t working out for the vast majority of people, and then to give that final kick when you’re already down, some asshat manager tells you to “talk to” sparkly autocomplete for emotional support.
Fuck this guy.
That’s going to work out well —expect a wave of suicides incoming,
We live, after all, in a world where people are fully prepared to swallow horse medicine on the recommendation of “the internet”.
What a way to tell your former employees to ,”Talk to the hand!”
“Talk to the Copilot!”
Let’s be real for a moment, EU and North American governments heavily manipulated the incentives, first by encouraging borrowing via ZIRP and even creating money out of thin air during the lockdowns and tossing it towards corporations and individuals (which resulted in massive inflation and companies rushing to hire people at current salaries), and then by increasing central bank interest rates considerably to counter the massive inflation their previous actions created (which resulted in corporations tightening the purse strings, including doing layoffs).
I am not saying all this wasn’t necessary, I am saying incentives were heavily manipulated by governments, so no whining about “capitalism” please.
kurkosdr,
We have a government the sets policy, but it doesn’t imply those policies are anti-capitalistic. The creation of money has long been privatized. While the feds get their cut, it’s the private banks who create that money out of thin air. It’s astonishing that we allow them to do that, but like it or not it’s the capitalists who wanted this system and they got their way.
It’s fair enough that some people don’t like pure socialism either, but unchecked capitalism is a disaster that cannot be dismissed. You end up with the owning class controlling the means of production with the working class being increasingly dependent, which is largely what we are seeing. This is capitalism. While real life is much more complicated than the game of monopoly, the game is a great example of the dynamics of capitalism and it’s inevitable end game. The fairest point in the game is at the start when resources are balanced, but as the economy becomes imbalanced, these imbalances become impossible to overcome and it becomes less and less about work or skill, and more and more about ownership and control. Luckily for players of the game, it ends and resets back to a fair state next time, but in reality there is no reset, the imbalances grow over generations with more wealth being a byproduct of who one is born to.
“Whining” may not offer a way to solve the problem, but it’s candid to state that capitalism isn’t going in a great place for the majority of people. Median wealth, adjusted for inflation, is dropping because the elites that control everything are hell bent on keeping more of it for themselves. A country that is so wealthy really should not be experiencing poverty/homelessness/food/healthcare insecurity etc, yet we do and the wealth imbalance is getting significantly worse over time.
https://www.cbo.gov/publication/60807
Nope, you got it completely wrong, the central bank regulates the money supply by setting the central bank interest rate. For an extreme example, see the Turkish Lira, Turkey’s central bank set central bank interest rates well below inflation for too long, and the Turkish Lira lost 83% of its value over the past 5 years relative to the USD (despite the USD experiencing considerable inflation at the same time frame!) and even lost 60% of its value the 5 years before that. I won’t explain how the whole thing works here, but this should clue you that such a loss of value doesn’t “just happen”, it’s tied to central bank interest rates.
And what people like you who complain about “wealth imbalance” don’t understand is that wealth isn’t anchored to a particular country, it can be transferred to other countries such as Switzerland or Panama to avoid redistribution (including redistribution via taxation). The owners of said wealth can be also buy citizenship and denounce US citizenship. Want to improve median wealth? Fine. Raise the minimum wage, stop importing illegal competition to domestic labor from abroad (since illegal immigrants tend to work under the table and undercut the locals), and control natural monopolies (including healthcare providers) via price caps. Whining about “wealth imbalance” is a red herring that only serves to distract, since again, wealth isn’t anchored to a particular country, which is why some politicians like to talk about “wealth imbalance” so much.
kurkosdr,
This may not be how banking works in other countries, which I don’t know much about. But it is how it works in the US. Our banking system lets banks create money from thin air. They are only required to back about 10% of loans with actual assets. Theoretically a bank would not need to borrow any money from the feds, but as generous a deal as it is that banks are allowed to create $9 out of $10 from thin air, it still ends up being a lending bottleneck. That’s where the fed comes in, they lend money to the top banks and decide what the interest rate should be.
These videos may do a better job explaining both the US banking system and fed.
https://www.youtube.com/watch?v=O5DaC1Ujrrg
https://www.youtube.com/watch?v=Oz5hNemSdWc
The “wealth imbalance” is not merely the opinion of people who complain though, it’s an established fact that it’s real and getting worse. Whatever your opinion may be about it, report after report support this fact.
I don’t contest that you may have legitimate gripes about the wealth imbalance between the US and poorer countries. Maybe you want to say “americans have it easy compared to us”, and maybe we can look at that, however, if you are living outside the US you may not realize how bad the wealth imbalance has gotten here too with people not being able to access to food, housing, healthcare, education, etc. The wealth imbalance is not just a red herring, it very much a center stage issue responsible for why things are getting worse for new generations. Not for nothing the very same billionaires who are exploiting US workers are probably exploiting you too.
It looks like the reserve requirements were brought down to zero during the pandemic and are still in effect, so banks no longer need to borrow money (for now) if they can’t hit the 10% target.
https://www.thebalancemoney.com/reserve-requirement-3305883
And you don’t understand that banks cannot lend more than their deposits. Even at 0% legally mandated reserve, they can’t lend more than 100% of their deposits. So, eventually they have to collect those loans one way or another so they can re-lend that money to someone else. So, the money returns to the bank. So, unless a bank decides to never collect the loans (and leave depositors high and dry too), they cannot create money out of thin air.
And you don’t understand that whining about “wealth imbalance” is like crying over spilled milk. Once the money has vanished into the Swiss or Panamese bank accounts of the mega-rich, it’s like trying to collect milk that has vanished down a storm drain.
What you can do is eliminate any unusually high profit margins that enable such money accretion in the first place, but this requires legislation that will displease both the left and the right (see my comment from yesterday for details).
@ kurkosdr
“And you don’t understand that banks cannot lend more than their deposits.”
That’s your misconception. The amount of deposits has nothing to do with credits at all. That’s not how banks (globally) work.
They actually DO create money – most times secured by some collateral like e.g. your house. And only 10% or less of these credits are to be refinanced via a central bank.
And yet they do, the traditional view that lending arises from depots isn’t so clear cut with modern banking. There can be unintuitive yet significant disconnects between deposits and lending.
https://www.philadelphiafed.org/the-economy/banking-and-financial-markets/how-banks-use-loans-to-create-liquidity
kurkosdr,
Any wrongdoing whatsoever can be cavalierly labeled as “spilled milk”, but that doesn’t mean we should ignore that there is real and ongoing harm being done. If you’re point is that it is difficult to fight those with all the wealth and power, well sure, I agree with you there. But I get the vibe that you don’t even want us to point fingers at those accumulating unimaginable wealth while so many others are suffering. I think you’ll find most people disagree with that. Normally I’d assume nobody in my orbit favors oligarchy, but given your position I have to ask: are you in favor of oligarchy? That would certainly explain why you don’t seem to mind the extreme wealth imbalance.
The problem with finger pointing is that once you start doing it, it never ends, I prefer to think in systems.
First things first: Even if I am, what are you gonna do? Come to my house and slap me?
Secondly, I don’t like terms like “oligarchy” being thrown around without proper definition, thank you very much. At which point does someone accrue enough wealth to be considered an “oligarch”? You never bothered to define that, yet you are already willing to start pointing fingered at the people you perceive as “oligarchs”.
Personally, I’d rather think in systems. If there are corporations enjoying unusually high profit margins, that’s where you should focus (how they do it), not whining, not finger-pointing.
Someone is about to discover that banks can create liquidity by borrowing from the central bank (when the central bank interests are very low). But who decides central bank interests? (and ultimately money-creation)? The central banker? And who appoints the central banker? The government.
Ultimately, it’s the government that increases the money supply.
kurkosdr,
Thank you for agreeing with what I already linked to 🙂
kurkosdr,
I agree it never ends; those in power always want more because of greed. However if too many people resign themselves to accept deteriorating conditions and to never fight for the masses, then democracy and our freedoms from tyranny will be no more. Ignoring such serious issues as the wealth and power imbalances is the exact opposite of what the world needs right now, at least assuming you aren’t rooting for the oligarchs.
I am fine with the common meaning of it, but if having a definition makes you happy, here you go…
https://www.britannica.com/topic/oligarchy
That should answer your questions about oligarchy. It even touches on elements of our discussion…
Comments aren’t self-contained articles. This is an interactive discussion and what I say is based on your responses. It’s fair to ask each other questions, but it’s not fair to criticize each other for not answering questions that haven’t yet been asked.
That said, you didn’t provide a direct answer to my question about whether you support oligarchy? That would help clarify why you don’t care about the growing wealth inequality.
It seems like your trying to deflect criticism of those responsible (ie the oligarchs) by creating distance between them and the “systems” they’ve created. I gather you’re doing this to avoid the finger pointing “fear the entity in front of you, but don’t look at the man behind the curtain pulling the strings”.
I’d understand if wealth inequality just wasn’t a battle you want to partake in it. However your comments are actively taking a position against criticizing the elites….my question is why? Can you answer that?
And what you don’t understand is that finger-pointing doesn’t work for two reasons:
1) The oligarchs (perceived or real) can always transfer their wealth to another country and even get citizenship in another country, your finger-pointing from thousands of miles away does nothing, I prefer to focus on any unfair advantages that enable some people to collect the wealth in the first place
2) I don’t mind people becoming filthy rich if they do it without unfair advantages (for example Henry Ford). If you become a billionaire by providing a million people with $1000 of value, good for everyone involved
3) Some poor person in the third world or in the very rural provinces of Russia may consider you part of the privileged elite for having stable access to clean water, food, and an air-conditioned home, see: https://en.wikipedia.org/wiki/Golden_billion So, be careful with that finger-pointing, because the finger can as well be pointed at you by someone poorer than you. That’s one of the reasons I prefer to take a more systemic view.
Does this mean you are also agreeing with my first post?
Let’s be real for a moment, EU and North American governments heavily manipulated the incentives, first by encouraging borrowing via ZIRP and even creating money out of thin air during the lockdowns and tossing it towards corporations and individuals (which resulted in massive inflation and companies rushing to hire people at current salaries), and then by increasing central bank interest rates considerably to counter the massive inflation their previous actions created (which resulted in corporations tightening the purse strings, including doing layoffs).
You can’t blame “capitalism” for what was a government decision (now that we agree that it’s the central bank that regulates the money supply).
kurkosdr,
I didn’t disagree with you that the government does those things. However I’m still going to reiterate my original point “it doesn’t imply those policies are anti-capitalistic”. There may be some exceptions, but by and large the politicians who run the government are in bed with big business interests. They will say what they need to get elected, but when it comes time to actually legislate, it all gets corrupted to favor big business.
kurkosdr,
It’d be dumb not to acknowledge and address the problems here at least. Just think if the same self-defeating logic was applied to dismiss abuses in other facets of life: DUI, theft, assault, rape, murder. The fact that abusers may be able to cross jurisdictional lines is not a reason to throw up our hands and allow it to continue here.
What you don’t understand (#1) is that wealth imbalance is it’s own cause. Even if the rules of monopoly are completely “fair” throughout the game. imbalances quickly make it easier for the top player to make more money while much harder for the lowest player to make money for the same effort. The wealth gap is a self reinforcing feedback loop. Skill and some luck are important at the beginning, but after a few rounds ownership quickly overpowers game-play strategy. Nearly any loosing player could switch hands with the winning player and go on to win the game, not because of skill, but because it’s so much easier to win when you have more than your opponent. The same is true in real life. The difference is that real life doesn’t place people on the same starting line. And the advantages are multi-generational. This isn’t to say there is no vertical mobility, but it’s dropped significantly in recent decades.
I’m fine with people working hard for money, but the reality is that way too much money comes from rent seeking instead of through positive contributions to society. This type of wealth accumulation actively exploits negative social outcomes for profit. Unfortunately not all companies are above turning to bullshit business models screwing their own customers. And since businesses practically own the government, they generally get their way even if they face temporary setbacks.
https://arstechnica.com/tech-policy/2025/07/us-court-cancels-ftc-rule-that-would-have-made-canceling-subscriptions-easier/
https://www.theregister.com/2025/01/02/fcc_net_neutrality_rules_killed/
I actually don’t have AC and boy was it uncomfortable when it reached 101F/38.3C earlier this summar. I can sympathize. There will always be others who are worse off, however rather than avoiding the subject like you suggest, I feel it’s important to shine a light on the disparities both here and abroad. Wealth imbalance isn’t just happening in the US, it’s happening across the world.
We covered this in a philosophy class, Plato had a lot to say about this.
https://thegallerist.art/plato-on-equality/
I wouldn’t go as far as he was suggesting, but I think he may have been onto something. Rather than limit the wealth at the top, we need to encourage wealth growth by means that benefits everyone. Stop justifying the accumulation of wealth by ways that exploit and take away from others. I realize that your going to completely disagree with this philosophy, and that’s ok, but I do bring it up to point out that you’d be wrong to assume that I wouldn’t care about those with less than me. We should allocate more for those struggling with the basics. Unfortunately our government is doing the opposite, ending USAID distribution of food and medicine. And they just passed a bill that may be responsible for the largest transfers of wealth to the billionaire class ever.
#1 I don’t like talking this way, but I’m using your words on purpose to illustrate how condescending they are. Disagreement does not imply misunderstanding.
9000 layoffs? I guess they want to open new call center in India or hire underpaid immigrants that will work 80 hours per week and not complain about any human rights violations.
I think they are just coasting on their corporate installed base for their diminishing products, like Windows, and all the people who keep for some unfathomable reason, giving them money for things they barely maintain any more. Yeah, and mostly being extracted out to India, like IBM before it. This is mostly a story about America’s decline.