80F and 98%RH this morning. Stayed a tiny bit cooler yesterday with overcast, but was still hot and humid.
Anyone else notice how much of our economy is people living off the ‘skim’?
From Greg yesterday-
“The record companies in the US have definitely stopped trying and are content to pocket streaming royalties from the last five decades of material in their vaults.”
It’s not just the record companies. Youtube’s whole model is getting paid for other peoples’ work. The entertainment industry in general does this, with the creative talent, the ‘artist’, often getting little or nothing for their efforts.
Amazon skims a little off of every third party transaction. Ebay and Paypal too. Google and facebook get paid for something quite different from the ‘service’ they provide to their users, interjecting themselves into the process of buying and selling, skimming a tiny bit from every potential transaction.
Doordash, grocery shopping services, delivery in general, all make their money off of someone else’s transaction. There are fewer and fewer primary creators, making things for people to buy.
The internet may have disintermediated some commerce, but it introduced a whole new crop of companies that interjected themselves BACK into the ‘value stream’. The end result is the ‘maker’ gets less, and all the new intermediaries all get a little bit more out of each transaction.
The financial industry is all about skim. All the algos are skimming from each sale, frontrunning and driving the cost up for the end customer. Interest and other financialization tricks are skim. Gambling in the stock markets is skimming money out of the pool….
.gov does it directly with taxes and regulation. Regulators are the first of the skimmers, adding cost, producing nothing. And of course the ‘taker’ class lives entirely off the skim from ‘makers’ and the earnings of the ‘skimmers’.
Huge chunks of our economy have been financialized, or become dependent on .gov.
Take a second or two and consider what happens to an economy built on skim when it contracts… What happens when there is no room in the price of a good for 4 extra intermediaries? What happens when people decide they really don’t need someone else to pick up or even make their dinner?
That’s when the downward spiral starts in earnest.