Tesla's market cap is 25% of Ford's. I really wish them the best, but the stock already prices in insane growth from where they are now.
You've clearly never driven on California's roads (unlighted freeways with big potholes through major urban centers - really California?). Plus I suspect the Tesla plant mostly uses the rail line it backs up against.
Anyhow, the portion of taxes that goes to roads and police and such is a tiny fraction that no one feels bad about paying. At the federal government level its about 14% of spending, and it's similarly low at the local level. Alameda county, where the Tesla plant is, needs to spend roughly 100% of it's tax revenue on funding pensions, and borrows additional money for it's alleged road spending. The City of Fremont finally saw the light (literally) about a year ago and scaled back pensions so that they could actually budget a few bucks to keep the street lights on.
tl;dr: the roads and police are not a significant government expense.
The effect is the same whether it's one bank acting alone or many banks acting in concert. One dollar deposited at one bank leads to a series of loans and further deposits which eventually permit 1000 banks to make 1000 $1 loans and, all together, collect $10 worth of interest. Provided, of course, that no two individuals ever ask to withdraw "their" dollars at the same time and thus bring the whole house of cards crashing down.
Out of curiosity, do the banks really need to be different, or does money deposited by a bank's loan customer count toward that bank's deposits? It was my impression that all deposits counted and there was no need for the money to pass through many distinct banks.
Well, there's not much fear of a run on the banks since the FDIC was created and backed with the money-printing power of the Fed just to prevent that - I can't think of a reason I would ever withdraw my saving as physical cash. I might spend all my savings to buy gold or land or guns, but I've never heard of even the "preppers" hoarding cash.
No, it doesn't strictly have to be a different back, it's just quite likely to be. My only point was you can only loan out the total of your deposits so it's not "free money": you have to work to convince people to deposit that money in the first place, and you won't do that without offering something of value.
would prefer a clear dividing line between demand accounts, which the bank must be prepared to pay out in full at any time (full reserves), and time accounts, which should be clearly described as investments, loans to the bank which, like any loan, may not be available for withdrawal on demand and could end in default, costing you some or all of your principle. Current practice is to mix the two types in varying proportions, from interest-bearing checking accounts to CDs guaranteed against default.
The is a clear dividing line, it's just not the one you want. A "demand account" is for all consumer purchases the same as a "checking account" - allowing banks to pay interest on those started around 2000, but the interest has no bearing on it. (And the reserve requirements are pretty low for demand accounts too, their just not 0 like savings and CDs).
It's worth noting that in the current system, there's not really a risk that you can't get your money back because of fractional reserve banking, because a bank can meet withdrawal needs short-term by just borrowing the money from the Fed, which is willing to create infinite money to meet such demand. There's not enough physical currency to go around, but again I'm not sure that's relevant any more.
No, you're just not getting how it works. The same bank does not get to lend out the same money twice. The "same money" gets loaned out multiple times (and thus the money supply is quite a bit larger than the physical currency pool) by different banks in sequence. The Fed is very firm about this: it's the only bank that gets to actually print money, all the other banks must get a deposit before they loan the money out.
Currently Slashdot is displaying ads for me along with the "disable ads" checkbox checked. Perhaps "approximate computing" is farther along than I imagined!
have no problem with "work of the mind"â"I'm a software developer too, BTW. But when you can take $1 in reserves (just enough to meet the daily demand for physical currency) and turn it into a $1000 loan, and get paid real interest on the full $1000, there's something undeniably fishy going on.
You may be misunderstanding how this works. A given bank can't lend out the same money twice, or 1000 times. In order to lend out $1000 someone has to deposit $1000 with the bank (after which that money is presumably spent and if another bank must convince the new owner of that $1000 to deposit it, only then is it loaned out again). And the bank needs to do something people find valuable in order for people to make those deposits, and accept a lower interest rate than the bank can make. in return.
Historically, being a retail storefront at all was a big part of how banks added value, and being able to process small transitions with good liquidity was the rest. But all of those things are becoming available to the individual small investor now with no need for a bank. Banks are basically coasting now on the financial sophistication of the average guy catching up with technological advancement (which usually take a generation or so).
How can we ever run out of time to take in personal services? An economy where each of us spend half our time providing personal services and half consuming personal services (from one other person at a time) is quite viable (if robots are doing the rest) and we're quite a ways down that path already today.
It's well understood that people don't much value things given to them, compared to how they value things they earned. I'm not sure why you'd question that.
If we're talking experiments, learn the secret of NIMH: unlimited free resources in constrained geography leads to a population spike followed by a loss of the social ability to reproduce, and then extinction. It's hard to argue that this just applies to mice when we see it around us, in demographic implosions in well-off high-population areas. Universe 25 is terrifying once you understand it.
Our mental wellbeing requires real challenges to measure ourselves against and lend a sense of purpose to life. Historically we can usually often societies into farmers and bandits, makers and takers, but the bandits often had a harsher, more challenging life than the farmers, so everyone still had adversity to overcome. When the "bandits" instead just vote themselves lives of ease on the backs of the "farmers" (to stretch the metaphor a bit), social structures seem to fall apart within those groups and you get the same "random waves of violence" seen in Universe 25.
The difference between a bank and a "random guy on the net" is that the bank can loan out money at no cost to themselves, apart from the low reserve requirements, while the guy on the net has to actually earn every single dollar he loans out.
There are no reserve requirements any more, except on "demand" (checking) accounts. But that bank earns its money as much as the "guy on the net" does. As a software developer, I'm going to insist that work of the mind is just as much "earning" as work of the body.
Banks may not have a monopoly on dollars, but they do have a monopoly on cheap dollars that effectively prevents anyone else from competing in their domain.
No, they convince people to lend them money. At the rates most banks pay for savings, I'm amazed and impressed they convince anyone to do that. But there's also peer-to-peer lending, charitable micro-loans, and other models for lending. Most people go to a bank because banks are traditionally pretty good at being retail storefronts. But the value of brick-and-mortar storefronts keeps falling in all businesses, and banks don't have a lock-in this century.
No, there certainly isn't a "major shortage" by historical norms, just a stretch of unemployment that's "bad" by modern standards. But recovery is here, at least where I am - help wanted signs are everywhere again for low-skill jobs.
We've been replacing intelligence as well, for centuries. A significant portion of the workforce spent their days writing stuff down, and adding stuff up, and those jobs have slowly vanished over the past century.
Demand likely does stretch to infinity - why wouldn't we want more? Whatever the robots do, there will always be personal services we want from one another. Paying people to do nothing, OTOH, could bring down society if the past is any guide - when people don't have a stake in building things, they tend to spend their time destroying them.
How would that work, exactly? "Ultra-luxury" doesn't involve having that much more stuff than anyone else these days, rather it's about having stuff that takes more human labor to produce, unlike that vulgar mass-produced stuff. Pretty much the opposite of what you fear, in fact.
Anyhow, all corporate earnings combined are less than 10% of total salaries. It really doesn't matter much in the scheme of things where that 10% goes - we keep creating new jobs because the average man keeps wanting more. Sure you could have some if you only had what robots made, but you could have more if you had some services humans provided. And as a species, we always want more.
We're about 300 years into human labor being replaced by automation, and we seem always to be able to invent more jobs. No matter how many jobs are replaced by automation, we as humans will always want more, and so will always find work for one another. It wasn't that long ago that almost everyone worked as a farmer, soldier, or manufacturing worker, but now all three of those have gone the way of the blacksmith and scribe: we found new ways to be productive.
Almost all agriculture jobs have vanished to automation. Almost all manufacturing jobs have vanished to automation. Almost all paper-shuffling jobs have vanished to automation. I don't think whatever's next will somehow be catastrophic when none of the previous cycles were.
Why so? There are many, many tweaks to car motor design that aren't found in a weed wacker, but little of that is specific to a 4-stroke engine. The cheapest possible designs are bad to be sure, since they aren't careful about burning all the fuel, but AFAIK any 2-stroke built for performance (i.e., with a proper exhaust expansion chamber) isn't a fundamentally worse starting point. Of course, it's easier to just us existing, refined 4-stroke designs than to get everything right for emissions on a 2-stroke, so most tools will go that way.
What a bizarre notion. Of course, it's common on Steam for bigger games to be able to pre-download the game and just unlock it when it launches (and then not be able to play because the game servers are completely overloaded, of course), so I guess there's a market for that.