A Love Letter to Bankers.
Don't read this.
A thing that is absolutely true about twitter is that it is a toxic place. The more obvious reason why this is true is that twitter seems to transform some perfectly normal people into instantaneous terrorists that rush in hoards to mock & bully with no mercy.
The reasons why perfectly normal people can be transformed in this way escapes me, and may or may not involve a fair deal of psychology that I’d prefer not knowing. Look, let’s just say that one should be always suspicious of psychologists. They see into us! Surely it must be fun to watch people from afar, while pinpointing known psycho disorders to all the ways we freak out. Like calling Kanye’s God blasphemy a narcissistic disorder?
The other reason why twitter is toxic is that it works like an addictive self immolation. The irresistible urge to short-form broadcast anything that you momentarily feel particularly clever about is immediately punished by thousand prying eyes armed with the infinite knowledge of the internet.
Over time, this has created an environment of absolute sarcasm. There is a certain invisible art to conveying a message on twitter; not necessarily a finesse, rather a combination of absurdity and the skill of saying things backwards.
This is incredibly entertaining. Really, a constant stream of alpha news in the form of a joke. Toxicity is good and bad; it seems to be working really well when it comes to short information intakes. Elon or not, twitter is the single most important personal broadcast channel for anyone with even one foot in the Anglosphere.
Although there are many twitters (dog lover twitter, poetry twitter, etc.), for the reasons above, finance and crypto twitter dominate, and one of recurring topics on this dark side of the app is how twitter’s stock constantly underperforms.
Of course, someone named Elon has added oil to the fuel over the recent months, but make no mistake, this is an old, old topic. Investors were talking about this in 2016! (I wrote about it for Forbes back then.)
Isn’t it strange that one of the most important media channels, a company that provides so much value and gives work to thousands of employees is constantly underperforming?
Isn’t a stable (even if lower) profit* every year, the ability to pay thousands of employees a wage, the resources to support an active R&D and still some time & money left to do some other stuff for society (which I am sure twitter is doing) enough to justify a rising stock price?
No, not in our world because we are suckers for sensation. A fun thing that I like to think about that is not fun at all is how excess sits well with human nature. Good enough is not good enough when it comes to money.
If there was some finite known wealth in the economy, and everyone would get a fair share, if there were no outliers, no billionaires and jet dreams, in other words, if we were to kill the American dream, the economic growth would die with it.
There is a whole chapter missing here in this space about how men love climbing the inequality ladder, but look, we both know that I am no Maslow.
Which is why we need debt. Debt is absolutely essential to how we as humans operate. If you look at a period of, say, the last 20 years, everything has become larger, better and more plentiful.
Our cars have become opulent (virtually every car class has devoured at least one category above it), we are surrounded by luxury electronics and we drown in fashion.
Yes, a lot of it is down to technology - a productivity boost driven by cleverer way of doing things. (I deliberately avoid the topic of #brokenglobalisation2022, you can read about it pretty much everywhere else.) But a higher productivity is not what keeps the economic machine moving forward.
A somewhat esoteric view that I cannot shake off is that it is the debt that keeps the gears of the economy spinning, that keeps us producing and buying always more.
It is esoteric because there is no exact science. There is a very large divisive line between inflationary economists (say Friedman) and Austrian economists, or even pure antagonists of banking (Rothbard). This is fun to watch in relation the bitcoin standard. (Bitcoin Standard Has a Debt Problem.)
My simplified mental model goes something like this: We are not wealthier than we were 20 years ago. The total value of all resources on earth is still the same. We haven’t taken over more planets, or something. I mean, Elon has, but only on twitter.
Yet, we are thrust forward to produce and buy and then replace better, more opulent things because we keep borrowing from our future selves, then rolling that debt forward and borrowing even more, ad infinitum, propelled by the process of debt creation rooted in how banking and the fractional reserve system work at the core; a process that inevitably expands money and lowers its value.
Finite things cost more over time, yes; we cannot afford a house, but we are surrounded by better products, the endless production and consumption of which, keeps us all busy. Seems truly important that debt.
Now, observing history, you could even go further (as I have) and ask if it couldn’t be that it is debt more than anything that makes men into entrepreneurs. I wrote about it in Have central bankers heard of The South Sea Bubble? and perhaps also Crypto’s aha! moment.
Also don’t take me too seriously. You will probably not meet a more debt-free person in your life.
*yes, ok I saw Q2 numbers, ouch.