[Plura-list] Warren Buffet, monopolist; Uber lost $4b in H1/2020; Dragon's Lair skeleton Dirk pin

Cory Doctorow doctorow at craphound.com
Mon Aug 10 10:34:45 EDT 2020

Today's links

* Warren Buffet, monopolist: Monopolized: Life in the Age of Corporate

* Uber lost $4b in H1/2020: They're not even making it up in volume anymore.

* Dragon's Lair skeleton Dirk pin: Come for Dirk, stay for Leia.

* This day in history: 2010, 2015, 2019

* Colophon: Recent publications, upcoming appearances, current writing
projects, current reading


🥜 Warren Buffet, monopolist

Monopolized: Life in the Age of Corporate Power is David Dayen's new
book about the concentration of industry in America and around the
world; one interesting implication of monopolies is that they are
intensely individual phenomena.


That is, despite being driven by vast social forces, monopolies have
monopolists: named, well-known individuals whose personal choices
directly lead to misery, hardship and death for millions.

People like Warren Buffett, America's folksiest monopolist.

Buffett isn't shy about this. His whole deal is backing companies with
"moats" - that is to say, companies that don't have to worry about
competition (cue Peter Thiel, saying the quiet part aloud: "Competition
is for losers").

Buffet is in nearly every chapter of MONOPOLIZED. In an interview with
Matt Stoller, Dayen explains how this came to be.


What kinds of monopolies does Buffett love? Well, if you can't afford
dialysis or if you lost a loved one to opioids, chances are Buffett made
a buck. A classic Buffett moat is health/pharma, which are easy to
monopolize thanks to the captive audience and/or addiction.

If your town only has one newspaper, that might be Buffet's doing - and
if not, it was the doing of one of his buffettistas, using his playbook
to buy one paper and then crush its rivals with anticompetitive tactics.

If you own a mobile home and lost money the instant you bought it and
get worse off every year in a trailer park, that's probably Buffett, who
understands that when someone is desperately clinging on at the brink of
homelessness, you can really squeeze 'em.

If you own a .net or .com domain that you're paying big bucks to renew
every year, that's Buffett, working through Verisign, one of the world's
most profitable companies, thanks to its government monopoly on the to
biggest TLDs.

If your favorite craft brewer was driven to its knees and bought up for
pennies by the Brazilian private equity firm 3G, that was Buffett, who
drove the purchase of beer monopolist AB Inbev. Buffett's also behind
megamergers like Burger King/Tim Horton's and Kraft/Heinz.

And while Buffett rarely buys tech businesses, he was big, early on
Amazon: "I had to understand the product and business." Dayen
translates: "he understood the monopoly that Amazon was putting
together, so he purchased a large share of their stock."

Buffett's also big on Moody's part of the hyperconcentrated bond-rating
market: "I know nothing about credit rating. The only reason I bought it
is because there are only three credit rating agencies and they serve
the whole country, and they have pricing power."

Buffett's ideal investment is a monopolist, one that makes money so
reliably, irrespective of poor quality or high prices, that "even your
idiot cousin could run it."

Buffett doesn't just seek out monopolies: he creates them, he cheerleads
them, he normalizes them. Buffett, perhaps more than anyone else on
Earth, has legitimized the idea of monopolies.

As Dayen points out, "Buffett would be the best informant for an
antitrust authority that you could find, because he's already looked
into the economy and found the companies that have the most inordinate
market power. And so all you’d need to do is subpoena him and say, all
right, tell me about this company that you bought and why you bought it.
And you would say, well, they have this incredible pricing power. Well,
there you go."

Monopolies esoteric, so let's put some sinew and blood onto those bones.
Zephyr Teachout's new book "Break 'Em Up" has a great chapter on
"chickenization," the labor practice named for the way the
poultry-processing monopolists do business.


If you're a poultry farmer, here's how your life works. The three
poultry processors have divided up America so there's only one processor
in range of your farm. That processor tells you how to run your business.

They design your coop. They sell you your chicks. They tell you when and
what to feed them. They tell you when to turn on the lights and when to
turn them off. They tell you which vets to use, and which meds the vets
can prescribe.

They experiment on you: some farmers are given experimental chick
breeds, or experimental feeding or lighting schedules.

But through it all, they don't tell you how much they're gonna pay you.

You find that out when you send your chickens to the plant - they
just...decide. If the price is too low, you go broke. Chickenizers tune
the process to keep farmers at the brink of bankruptcy. If you complain,
they stop buying your chickens.

If you complain in *public*, they tell all the other farmers that if
they do business with you, they'll stop being able to sell their
chickens, too.

Chickenization isn't just for chickens. It's the Uber model, the Shipt
model, the model of any "gig work" that tells you what you have to buy
and spend, but not what you will earn, with the pretense that you are an
"independent contractor."


Chickenization is coming to vast swathes of the workforce, and lockdown
will accelerate it, because if your job can be done anywhere in the
world, your employer can shop for the cheapest labor, anywhere in the world.

And even though you're working from home, bossware lets your employer
(excuse me, the company you "contract to") control and script your
movements down to the keystroke, watching your facial expressions and
listening to your mic.


That's where the Wizard of Omaha's love of "moats" gets us: chickenized
worlds, run by bossware, where he gets rich, and we cling on by our


🥜 Uber lost $4b in H1/2020

If you only follow one person on Uber, make it Hubert Horan, a transport
analyst who's been writing about the sector for 40+ years and has
written 23 articles analyzing Uber's financials and the impossibility of
the firm ever attaining profitability.


Uber has never, ever been profitable, and it never has been. When the
company IPOed and its investors dumped their stock on suckers, its
prospectus - the S1 - revealed that the company's path to profitability:

Replacing every public transportation journey in the world with an Uber


Short of that, the company is and always will be a money-loser.

The only reason it exists is that the Saudi royals decreed that they
would diversify their income, and gave Softbank an unlimited investment
budget. Softbank backs companies that it thinks can monopolize a sector,
allows them to lose money for years - decades!

Softbank assigns its companies absurd, unsupportable valuations, in the
hopes of scaring off competitors. If the monopoly rents never
materialize, Softbank flogs the company to rubes who were wowed by those
sky-high valuations. That's the Uber story.

In the past four years, Uber has *lost $23.2 billion*. In the first half
of 2020, Uber lost $4B. In 2019, Uber lost $5.1B. That means it's losing
money faster in 2020, despite no one riding in its money-losing
unlicensed taxi-cabs (Uber subsidizes about 40% of every ride).

Uber's got $7.8B on hand. At that rate, it will be broke by mid-2021.

Horan: "But if anyone still thought that Uber could somehow magically
reverse its multi-billion dollar losses, the coronavirus should have put
their fantasies totally to rest."

"The coronavirus has crushed the major drivers of urban car services
demand, including business travel and discretionary urban entertainment
(clubs, restaurants, etc.). Their customers remain highly concerned
about the health risks of all forms of public transportation."

Lots of businesses were made unprofitable by the pandemic - Disneyland,
MLB, United Air - but they were wildly profitable beforehand. Uber lost
money before the lockdown. They lost more after. They are toast.

Not even Uber Eats, a predatory company that is destroying restaurants
that *were* profitable, and might be profitable again if they survive,
is losing the company massive sums, the financial economy destroying the
productive economy.

Eats loses money faster than the car service! Its "adjusted EBITDA is 25
margin points worse than car services, even after the big coronavirus
driven boost in food delivery demand."b

And even as we prepare to dance on Uber's grave, remember that Uber
chickenized a vast cohort of precarious workers who will be sucked down
with it.

Incredibly, Uber CEO Dara Khosrowshahi is claiming the company will be
profitable by the end of 2021. The press is repeating this claim despite
the fact that he has no documented plan to make this happen and all his
past profitability predictions were false.


🥜 Dragon's Lair skeleton Dirk pin

Dragon's Lair wasn't a fun game, but it was an *amazing* game, and worth
the $0.50 premium it commanded for its jaw-dropping laser-disc graphics,
especially Don Bluth's superb character designs.


Etsy seller Nerdmatters commemorates Bluth with this terrific $10
Skeleton Dirk pin that comes with a holographic sticker.


Nerdmatters has a pretty fabulous store. I came for the Skeleton Dirk,
but I stayed for the Pink Hologram Princess Leia Glitter pin.


Both come with elaborate, pitch-perfect packaging from an alternate
universe in which they are the official product.


🥜 This day in history

#10yrsago Bill Ayers's To Teach: The Journey, in Comics, a humanist look
at education https://boingboing.net/2010/08/10/bill-ayerss-to-teach.html

#5yrsago Kansas officials stonewall mathematician investigating voting
machine "sabotage"

#1yrago Adversarial Fashion: clothes designed to confuse license-plate
readers https://adversarialfashion.com/collections/all

#1yrago How facial recognition has turned summer camp into a dystopia
for campers, parents, counsellors and photographers (but not facial
recognition vendors)

#1yrago Pressed about Amazon deforestation, Bolsonaro proposes only
shitting on alternate days to remediate climate change

#1yrago The FBI keeps boasting about all its "domestic terror" arrests,
but it can't name a single one


🥜 Colophon

Today's top sources: Naked Capitalism
(https://www.nakedcapitalism.com/), Super Punch (https://superpunch.net/).

Currently writing:

* My next novel, "The Lost Cause," a post-GND novel about truth and
reconciliation. Friday's progress: 517 words (41820 total).

Currently reading: The Deficit Myth, Stephanie Kelton

Someone Comes to Town, Someone Leaves Town (part 12),

Upcoming appearances:

* Virtual event with Christopher Brown for his novel "Failed State," Aug

* Induction into the CSFFA Hall of Fame, Aug 15,

Latest book:

* "Little Brother/Homeland": A reissue omnibus edition with a new
introduction by Edward Snowden:
https://us.macmillan.com/books/9781250774583; personalized/signed copies

* "Poesy the Monster Slayer" a picture book about monsters, bedtime,
gender, and kicking ass. Order here:
https://us.macmillan.com/books/9781626723627. Get a personalized, signed
copy here:

Upcoming books:

* "Attack Surface": The third Little Brother book, Oct 20, 2020.

This work licensed under a Creative Commons Attribution 4.0 license.
That means you can use it any way you like, including commercially,
provided that you attribute it to me, Cory Doctorow, and include a link
to pluralistic.net.


Quotations and images are not included in this license; they are
included either under a limitation or exception to copyright, or on the
basis of a separate license. Please exercise caution.


🥜 How to get Pluralistic:

Blog (no ads, tracking, or data-collection):


Newsletter (no ads, tracking, or data-collection):


Mastodon (no ads, tracking, or data-collection):


Twitter (mass-scale, unrestricted, third-party surveillance and


Tumblr (mass-scale, unrestricted, third-party surveillance and advertising):


*When life gives you SARS, you make sarsaparilla* -Joey "Accordion Guy"

-------------- next part --------------
A non-text attachment was scrubbed...
Name: signature.asc
Type: application/pgp-signature
Size: 195 bytes
Desc: OpenPGP digital signature
URL: <http://mail.flarn.com/pipermail/plura-list/attachments/20200810/80013ef7/attachment.sig>

More information about the Plura-list mailing list