Asklemmy

Literally money. More specifically, the financial need under a capitalist system for businesses to constantly grow and increase profits, and to focus on shareholder profits over making a good product. Most businesses on any sort of large scale today aren't in it to do a good job at making whatever it is they make, they're in it to make money. Their actual 'business' is just an incidental stop on the way to making more money.

You see this literally everywhere. Remember Odwalla? They made these great, super-thick bottled smoothy-like juices. Easily the healthiest thing you could find to drink in most of the places they were sold. Then Coca-Cola bought them out, changed the name to Naked Juice, and watered them all down. What we have now, as a result, is a pale imitation of what we once had.

Why? Because Odwalla was profitable, so it was profitable for Coca-cola to buy up a competitor for shelf space. But once they were bought up, there's no incentive to deliver the same quality of product. They have no remaining competition, so they can release a shittier version and we'll basically just suck it up because it's still healthier than soda.

Our reward for worshiping currency is for everything ever made out of love of a craft or an art to be exploited and turned into a shittier version of itself.

The solution, to my reckoning, is to start making things you love because you love to make them and to refuse to sell out when they come knocking.

Cause 1% of people own 99% of everything. That's never going to not be a shitty situation.

But also shit has been bad for marginalised groups since like forever. Now we're all just getting a taste of that as our masters pull the ladder up from under them.

It's cyclical and it's been happening for thousands of years. It's part of our human nature.

We all work together and build systems, societies and civilizations and do great things. We become wealthy and then slowly concentrate that wealth to smaller and smaller groups of people. Eventually the majority of the wealth is controlled by a very small group of people and everyone else has nothing. The system at this point can not sustain itself and collapses. Then the whole human system restarts again from the bottom.

It's happened many many times throughout human history.

We are just at the height of one of those cycles.

Most of these businesses operated at near unsustainable levels with almost negligible interest rates on loans, and now they're panicking because their business model is shit and they're trying to recover however they can by enshittifying everything.

I personally think that everything has always gone to shit. But in the downfall, new things will take over until that goes to shit. Or maybe because there are new things the old things will go down.

Take the example of video stores. They used the be the best thing ever. Rent all the movies you would like to see for a small fee per movie. Then downloading and streaming came along. Streaming was cheaper and more convenient. Result: video renting business went to shit.

Then the streaming services started to raise their prices. It started going to shit. Soon new ideas/companies/services will swoop in and the cycle will repeat again.

Worldwide economic growth is coming to a halt and what we're seeing is the ripples it causes.

Everyone giving you simple one-word explenation is most probably wrong.

Capitalism, its bubbles and inflations.

The problem is that money is permited to generate money. So the more you have beyond the threshold to sustain yourself the more you can generate without labour. The business with no interest loans accelerates things but it isn't the problem. It is that the system rewards idle investors at the expense of those whose labour actually generates value.

Capitalism wasn't fine until someone broke it. The core concepts behind it are flawed.

I think as we get older we just notice more and more. Things are bad but relatively things are also good. Take the bad and the good. Others here are explaining the economy stuff, that explains housing and our tech woes, blah blah blah

Stay informed, fight the good fights, but also take the small moments to stop and think about the positives in your life too. Your family, friends, what you find solace in. There are a lot of negative things, and social media really likes to focus on the negatives, but remember your personal positives too.

Neo-liberalism

But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???

Few, if any, of the big tech companies were playing out any kind of dividend to investors. It was more that they were content for companies to maybe someday make money as opposed to actually making money,

Most bizarre financial decisions can be put down to greed, or stupidity. Usually both.

lemme tell you about a special gorilla from Cincinnati

Our societies have been built around our economies. The underlying premise of our economies is that they must always grow in the long term to sustain itself and generate returns.

Permanent growth is not sustainable. Nothing in this universe just grows forever without significantly changing state. Not even the universe itself or imaginations do that.

Resources are finite and at some point, the costs outweighs the returns. The choice then is how quickly to shrink. A sudden collapse is the most dangerous option but possibly the fastest before returning to growth, a slow shrink is less destructive but for a much longer duration and it may not be fast enough to prevent outright collapse. This is where we are right now, and why banks are tinkering with rates.

The question for me is: Will tinkering with our economies slowly be fast enough to outpace our outstanding environmental debts and the interest accruing on that.

Greed, deregulation, and at least in my country, the powers that be don't give a shit about the plebes, but have incentives to destroy the world to feed their already overflowing bank accounts.

Very generally, you use the central bank rate to control the money supply. You increase it to remove money from the economy.

Even money is affected by supply and demand. Too much money in the economy is one of several things that can cause inflation -- for example because a surplus of money means people value money less and goods/services more. As a result, the value of goods/services as measured in money goes up.

Sadly, these are macro-level problems. Personally having a surplus of money sounds great, but the actual amount of extra money I made during Covid was not that much -- but give that much money to 100 million people and you're going to have inflation (I live in Vietnam where the economy was not seriously impacted).

Companies are competing with each other to maximize profit. If there aren’t new markets for them to grow into, companies can only grow by reducing cost and bringing in more revenue. As such they make shittier products while also pushing prices as high as they can go. This is an unfortunate consequence of how capitalism works.

Too many reasons to list so I’ll add another

Stocks are only ever allowed to go up, if they go down you risk death

Covid caused massive increase in some stocks, now those companies need to find new ways to create revenue from the base they had prior to Covid to out match the base they had during it

Some companies had drop in stocks during Covid, they need to make it up to their shareholders so they don’t lose confidence

Race to the bottom.

Your post is obviously mainly about interest rates, which wasn't clear from the headline. Why do you think higher interest rates equal "everything going to shit"?

But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???

There's a bit of this, but it's not the main way everything ever worked.

The hiking interest was to combat inflation by discouraging people from borrowing and spending, but the reduction in spending can also push some companies out of business and start a recession. The economy isn't booming but we don't have a global recession yet either, so I'm not sure I'd even say they're "going to shit" at the moment.

Actually this is because quality of engineering goes down. Noone seems to be able to design a good user interface. My theory is it's because the new generation of designers are rised on Facebook and Twitter. They never saw a good, clean UI in their lives.

There isn't an easy statement that explains why things are getting worse.

The housing market, for instance, was being affected by low interest rates. Low rates make being a slum lord more profitable than other forms of investment. This caused a massive amount of investment in the housing market by rich people and corporations, and normal people were priced out.

The banks that failed did so because they either invested in dumb things (crypto) or in long-term bonds. Those bonds lose value as interest rates rise, and SVB invested far too much into them.

There's all kinds of reasons

pay out investors from money that other investors gave them

But nobody would base a serous business on such a premise, would they? This sound like a ponzi scheme!