Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

The Tech-Company Fad For Laying Off “Low Performers” Is A Bad Idea

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On January 17, 2025

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General Electric, once one of the most important companies in America started firing the bottom 10% of performers every yearwhen Jack Welch took over. Seems smart, right? Strangely, however, GE was driven into the ground by Welch. It made a lot of money, for a while, but it was burning down the house and now it’s a has been company. The routine firing wasn’t the only reason, but it was part of it.

Lately I’m seeing companies like Meta and Microsoft saying they’re doing large lay-offs of the lowest performers. Seems smart, eh?

Problem is that most performance reviews have nothing to do with performance. They ask other people to rate you, often the so-called 360 degree rating, but sometimes it’s just your boss. Problem is, people suck at rating.

what you find in statistical studies is that their ratings only correlate to their own personality. We don’t see other people, we see ourselves. Groups don’t make this better; increasing the number of people who are bad at rating others doesn’t, in aggregate, turn the ratings good. Everyone is wrong. (There’s a bunch of other statistical stuff here, but what it comes down to is everyone is that there is NO way to measure the performance of knowledge workers.

Generally the best thing to do, counter-intuitive as it is, is have people rate themselves.  When asking others, the questions are:

  1. Who do you plan to promote?
  2. Who do you go to get X done well?
  3. Who do you go to when you need extraordinary results.

This is still subjective information, but it is reliable.

The better question to ask during lay-offs is “does this job need to be done?” If it does, unless it’s clear the person isn’t doing his job (in which case they should have already been fired), then lay them off.

Lay-offs generally do more harm than good. There’s plenty of evidence of this. Companies don’t lay-off into greatness, it’s a sign something is wrong and muscle gets cut at least as often as fat.

But using performance reviews (which, as they exist, should be tossed anyway) is extra stupid even if it seems like “duh, of course” idea.

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Doctorow Has the Best Idea for How Canada Should Retaliate to Trump’s Tariffs + Make It So Americans Can’t Drive

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On January 16, 2025

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Just break the IP laws and set up app stores with 5% feeds. Create jail break kits for John Deere tractors, and so on.

There’s no reason that a Canadian app store would have to confine itself to Canadian software authors, either. Canadian app stores could offer 5% commissions on sales to US and global software authors, and provide jailbreaking kits that allows device owners all around the world to install the Canadian app stores where software authors don’t get ripped off by American Big Tech companies.

Canadian companies like Honeybee already make “front-ends” for John Deere tractors – these are the components that turn a tractor into a plow, or a thresher, or another piece of heavy agricultural equipment. Honeybee struggles constantly to get its products to interface with Deere tractors, because Deere uses digital locks to block its products:

https://honeybee.ca/

Canada could produce jailbreaking kits for John Deere tractors, too – not just for Honeybee. Every ag-tech company in the world would benefit from commercially available, professionally supported John Deere jailbreaking kits. So would farmers, because these kits would restore farmers’ Right to Repair their own tractors:

This is the ultimate “break glass in case of fire” situation. US elites make a ton of their money from IP, and breaking it would hurt them extremely. It’s something I thought Russia could do in the face of American sanctions, but why not Canada? If the US won’t keep its deals with us, any deals we have with it are ours to break.

And Doctorow’s right that this is the perfect retaliation: any sort of exit-tariffs or retaliatory tariffs hurt Canada too. This just hurts the US, and hurts the decision makers, not ordinary people. Heck, many of them might benefit.

To make this really work, and make sure the population backs it, share half the profits with Canadians: just split them evenly.

If the US wants Canada to not be its good ally, then why not become a semi-neutral country? We can sell to the US and China and Europe, and become a data haven.

The other, less fun, but very devastating thing to do is to cut off raw crude. US refineries are reliant on Canadian crude oil, and by about a month after Canada doing so there would be absolute shortages of gasoline in half of America. Not “the price is high”, but “we don’t have it.” Canada can handle this for a few months. Just cover the company losses and insist they keep paying workers until we say otherwise.

Finally, and obviously, all countries being hit my Trump tariffs should get together, support each other and work to hurt the US and Trump as much as possible. Trump’s handed us allies, we should use them.

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The Competency Crisis Is Not About DEI

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On January 15, 2025

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That DEI (women and brown people) are responsible is a constant right wing cry.

The competency crisis is a result of an economy where making money without making a product is easier than making something. We prioritized financial profits—multi generational rises in asset prices that were faster than inflation. Housing went up. Stocks went up. Private equity earned money buy buying companies, larding them up with debt, and running them into the ground. Profits were juiced by moving production offshore and engaging in regulatory and labor arbitrage.

The best profit came from playing financial games and rentierism. You didn’t have to make anything or delivery anything, you just had to find a way to squeeze money out of something by making it go up faster than inflation, or by destroying something which was already built, taking all the future value now and giving it to yourself. Even the (old) Middle Class got in on this, by buying houses when they were cheap, watching them appreciate faster than wages, then selling them when old and moving south to be have their bums wiped in cheaper southern states by brown immigrants.

Everyone wanted to make money without having to create to get it. Mostly they either wanted to get unearned money from appreciation, to destroy what others had built, or to capture a market in an oligopoly or monopoly so they could juice prices.

Meanwhile, the manufacturing floor moved to China and elsewhere. The people who knew how to make things retired, moved to other jobs, retired and eventually died.

We can’t build most things because we haven’t prioritized building things, or getting better at building things since the 70s. The eighties are where predatory capitalism took hold, and since then the whole game has been rentierism, unearned gains, predation and arbitrage.

DEI doesn’t much matter in comparison. The people running the economy for the last 45 years have been mostly white males, and that doesn’t matter either. Women or brown people would have done the same thing. Margaret Thatcher was a woman, and one of the founders of this mindset.

No one’s competent at actually doing things, except profit extraction, because our societies haven’t prioritized doing anything but extracting profit for over 45 years. Everyone who lived in a society that was about really delivering products and making things is dead or retired.

if you want a competent society again, make it so that no one can get wealthy, let alone rich, without really making something or improving people’s lives. And no, Facebook and Google and so on don’t count, because they were started as good, and made shitty to increase profits. That’s the opposite of what’s needed. (AI in the US will be the same.)

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Gaza Ceasefire Proves Biden Wanted Genocide

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On January 13, 2025

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Trump famously said that he wanted the hostages released by January 20th or there’d be hell to pay.

Well, we now have what appears to be a ceasefire deal. All hostages won’t be released by the 20th, but it won’t be long afterwards.

As Ryan Grim states, Biden wasn’t “weak”, he was for the genocide. And as many of us noted, the war could always have been ended by the US with one phone call, because it could not be waged without US support. Israel is completely dependent on American weapons and ammunition shipments, as well as US economic aid.

Lots of stuff is still up in the air, including who will control Gaza afterwards, and we’ll see if Israel actually lets aid in. But the deal appears to be basically the same deal as the one offered in July which Netanyahu kiboshed. The difference now is that Trump, even if not officially President yet, is calling the shots. Biden could have ended it in July and saved a ton of lives.

I’m a little surprised by this, but apparently Trump wasn’t just pandering to Muslims when he said he’d end the war. As for Biden, he’s human filth, a genocidal bastard. I refused to endorse him because I won’t support genocide, period.

Those who said Trump would be even worse for Gaza appear to have been wrong.

Don’t support genocide. Ever.

This also appears to be a loss for Israel, though it will depend on the details. Israel’s goal was ethnic cleansing at the least. If the Gazans keep control of all of Gaza, Israel lost. Frankly, at this point, not something I expected, but we’ll see as the deal and Israeli compliance with the deal becomes more clear.

America is in decline, possibly terminal decline, but it’s still a great power and Israel is entirely America’s creature, though the influence of AIPAC often makes it unclear whether the dog’s waving the tail, or the tail the dog.

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What Should Europe Do About American Cannibalizing It & The Chinese Threat?

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On January 13, 2025

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So, Trump has threatened, most of the world, including most Germany and much of Europe, with 25% tariff rates. Under Biden, with the destruction of three of the four underseas pipelines from Russia to Europe, along with sanctions, Germany in particular and Europe in general have been losing energy-price sensitive industry to America. They close down in Europe, they open up in the US. Natural gas from America is much more expensive than Russian gas.

Meanwhile, the Chinese are coming on strong in automobiles and other consumer goods. Right now it’s mostly hitting European exports, so much so that BMW is planning on shutting down plants. The Euros have sold a lot of cars to China, but domestic producers are now cheaper and in many cases better, especially EVs.

Down in Africa, practically every country that France had troops in has or is planning to kick them out. The French bought a lot of resources from their ex-colonies at cheaper than market prices and screwed their ex-imperial possessions on loans and even charged some for “infrastructure built during colonization.” Now that those nations can get security from Russia and goods from China, they’re kicking the French out en-masse.

No love lost. Can’t imagine why people would be upset by being conquered, then charged for it. Ungrateful bastards.

Anyway, all of this has put Europe in a pickle. They’re behind China, the US, Japan and South Korea technologically. Their goods can’t compete with Chinese goods, and they’re losing their access to cheap resources from Africa, and have cut themselves off (with an explosive assist, almost certainly from the US) from cheap Russian resources. Meanwhile Trump is threatening Greenland, and saying the Euros need to spend more money on NATO.

Fun times in the garden. Nothing the Euros don’t deserve for refusing to end their vassalization back in the 2000s when they were up and the US was other occupied, but water under the bridge and all that.

So what should the Euros do? (Not what will they do. They love being American vassals and may well hug trumps leg as he kicks them until they cough blood.)

Well, for one, end the anti-Russia BS. If the Eastern Euros don’t like it, the Westerns should just kick them out of the EU or end the EU and start something else. Poles talk big, but they suck at the Euro teat. The Americans aren’t going to send them as much money as the EU does. If they want to be anti-Russia while Germany loses all its industry, get rid of them.

Russia has constantly stated its happiness to start selling to Europe again. Sure, China and India will buy their resources, but without Europe they lose a lot of bargaining power. Plus they built all the infrastructure and it can be fixed.

Second, reasonable trade deals with everyone else the US under Trump is fucking with tariffs. Canada and Australia are a good start. Japan seems to be avoiding the tariffs, but is worried and still pretty anti-China. Cut a deal with them as well.

The issue is that Europe has a high cost structure. Prices for their goods can’t compete with China. They need resources. Canada and Australia and Japan are high cost producers.

Form a trade bloc. Put up their own tariffs so that their domestic industry can compete. Insist that the Chinese build factories in country to avoid the tariffs. Europe’s still high income. Foster tech transfer from China. Massively invest in tech and science. Shut up about Chinese human rights, it’s none of their business and after Gaza it’s laughably hypocritical. China isn’t genociding the Uighurs, even if they don’t treat them great. So zip it.

Make your own trade area, consisting of high income, high cost structure nations with whom you can compete. Tell the US to fuck itself (politely but firmly) and rebuild the European military, not as part of NATO but independent.

France has nukes, expand that program and get them on modern missiles. Put allies under the European nuclear shield.

Form, in other words, a third pole.

Oh, there’s more that needs to be done. Neoliberal austerity needs to end, rents and housing and stock bubbles need to be slammed into the ground, and it needs to be policy that if you want to get rich you have to actually make stuff. No more finance bullshit, or landlordism.

But start by ending Europe’s vassalization and forming their own bloc.

Europe needs to grow up. The era of being America’s ally, and having a good standard of living without really having to work for it is over. America’s declining and they want to cannibalize their vassals to slow or (they hope, but hah) reverse the decline.

Don’t let them.

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Week-end Wrap – Political Economy – January 12, 2025

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On January 12, 2025

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By Tony Wikrent

 

Strategic Political Economy

The Lost Memos That Predicted This Era

David Sirota, January 07, 2025 [The Lever]

THE PLUTONOMY MEMOS: As we welcome in 2025, it’s worth noting that this year is the 20th anniversary of the release of the so-called Plutonomy Memos — a series of Nostradamus-like reports that predicted much of the world we live in today.

The memos written in 2005 and 2006 came from Citigroup, and they effectively admit that Wall Street and its neoliberal political allies were creating a feudal American economy. These documents — which you can find here, here, and here — survive on economist Brad DeLong’s blog and in a few old media mentions, book references, and tweets but barely exist on the internet (Citigroup reportedly worked to get them memory-holed off the Internet).

“There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take,” the Citigroup analysts wrote. “There are the rest, the ‘non-rich,’ the multitudinous many, but only accounting for surprisingly small bites of the national pie.”

Underscoring the accuracy of these predictions, a new UBS report finds that billionaires’ total wealth has more than doubled over the past ten years to $14 trillion.

In 2005 Citigroup Saw Canada, the U.S. & UK as “Plutonomies” – Economies Where Only the Rich Mattered.

Dougald Lamont, January 09, 2025

Their plan? Figure out how to make even more money from making the rich richer, and the poor poorer. Spoiler: Citigroup flamed out three years later….

Now, if you’re looking for some kind of morality in this tale, you should know Citigroup and its leaders managed to create the conditions for the 2008 Global Financial Crisis. They had lobbied for the 1990s-era repeal of the New Deal Era Glass-Steagal Act, which kept commercial banks and investment banks separate.

The “Plutonomy” is a study in Icarean Hubris. In the Global Financial Crisis, Citigroup crashed and received more in bailout money than it was worth;

“The U.S. Treasury extended a $45-billion credit line, and gave it a guarantee for $300 billion in “trouble assets” junk mortgages whose market price had fallen by 60 to 80 percent. Thic actions saved the bank and its bondholders, but Citigroup stock plunged belov a dollar by March 2009 as its equity value fell by more than 90 percent, to just $20 billion compared to $244 billion in 2006….

“Little of this note should tally with conventional thinking. Indeed, traditional thinking is likely to have issues with most of it. We will posit that: 1) the world is dividing into two blocs – the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S. What are the common drivers of Plutonomy?….

4) In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take.

There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.

 

Global power shift

Collapsing Empire: RIP ‘Overt Operations’ 

Kit Klarenburg, January 05, 2025 [Global Delinquents]

In recent months, a remarkable development in the Empire’s decline has gone almost entirely unnoticed. The National Endowment for Democracy’s grant database has been removed from the web. Until recently, a searchable interface allowed visitors to view detailed records of Washington-funded NGOs, civil society groups, and media projects in particular countries – covering most of the world – the sums involved, and entities responsible for delivering these initiatives. This resource has now inexplicably vanished, and with it, enormous amounts of incontrovertible, self-incriminating evidence of destructive US skullduggery abroad.

Take for example NED grant records for Georgia, the site of recent repeated colour revolution efforts, at the forefront of which were Endowment-bankrolled organisations. While still accessible via internet archives, they were deleted during the summer. Today, visitors to associated URLs are redirected to a brief entry simply titled “Eurasia”. The accompanying text describes in very broad terms the Endowment’s aims regionally and the total being spent, but the crucial questions of where and on what aren’t clarified….

 

Gaza / Palestine / Israel

The dream of a free Middle East is coming true 

[The Telegraph, via Naked Capitalism 01-06-2025]

Israel built an ‘AI factory’ for war. It unleashed it in Gaza. 

[Washington Post, via Naked Capitalism 01-06-2025]

Chris Hedges: Genocide — The New Normal 

[Consortium News, 01-08-2025]

New York Times rejects Quaker ad for calling Israel’s actions “genocide” 

[American Friends Service Committee, via Naked Capitalism 01-09-2025]

 

Oligarchy

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Open Thread

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On January 11, 2025

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Use to discuss topics unrelated to recent posts.

The Pacific Pallisades Fire

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On January 10, 2025

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An area larger Manhattan has burned down. In the middle of fucking winter.

I’ve been watching the reaction, and there’s a lot of screeching about DEI and bad fire management and so on and it’s true that California’s fire management isn’t good.

Whatever.

California’s had shit water management forever, and decades of shitty fire management. What’s changing is the climate.

California was paradise because it had a mediterranean climate. That climate is shifting north. California is moving towards a new climate. Like most such changes it’s a fits and starts thing: some years its the old normal, others it’s the new normal. The old vegetation, suited for the old climate, will go, often in fire, sometimes replaced more gently.

So, when building and rebuilding all homes need to be fire proof. The right type of concrete, thick brick, old fashioned masonry, ICF bricks, steel. A fireproof roof. Fireproof windows which don’t shatter under heat. A metal door. No foliage too near the house. You may have to evacuate, but when you come home, the house will still be there. Build to protect your pipes and electrical infrastructure, as well.

This the general rule, folks. The climate is changing. You need to adapt to the new climate wherever you live. If you’re a Californian and you want the old climate, move north, because that’s where the Meditteranan climate is moving.

In addition, expect instability. More extreme weather: California had floods not long ago—your home needs to be fireproof and floodproof. You prepare for fire, flood, wind and power and water outages. If you have money, get your own power and water supplies. (There are now machines which can make water from the air, even in pretty dry places.) If you’re doing the whole food thing, it needs to be done in a climate controlled space, not outdoors, because of the instability.

We aren’t stopping climate change. All indications are that it is accelerating, and we aren’t doing shit all about it. I suspect we are now at the self-reinforcing stage anyway. To stop it we’d actually have to not just stop fueling it but work on reversal, or it will continue.

Politically that isn’t going to happen any time soon enough to matter.

The world is changing. Prepare.

(Haven’t forgotten the Europe piece.)

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