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This is one of those feel good articles that doesn't say anything revolutionary yet manages to miss the point anyway.

To explain why it's possible for a cash-flush tech start-up to have homeless workers, it helps to know that the man I hired through Homejoy wasn't a Homejoy employee at all. That's because Homejoy doesn't employ any cleaners — like many of its peer start-ups, it uses an army of contract workers to do its customers' bidding.

So let me be a bit fair here -- I worked for a job shop for a period of time.  It was a convenient means for me to hawk programming services (which I'm fairly decent at) and have someone else handle all the bull**** other than doing the work and spending the money earned.

Of course for this intermediation I paid quite a price.  In fact, I paid several prices.  Let's list the more-obvious ones:

  • I got a lower hourly rate than I would have otherwise.  Nobody works for free, you know.  The job shop paid me my ask, but what they billed me at wasn't something I was entitled to know.  I did find out, but I had no control over it.

  • I got to pay all the taxes and fees that an employee doesn't see, but is part of his pay package.  Both halves of FICA and Medicare, for openers.  That one is obvious.  What's not-so-obvious are the other ones -- like health insurance.  At the time I did this I didn't have a need for it nor was there Obamacare, so I simply ignored it.  Had I been a W2 I would have likely been offered it and wound up with it as part of my "salary" whether I used it or not (I didn't.)  So not all of this was actual expense.  There was also workman's comp and unemployment insurance tax, which an employer must pay but a 1099 individual contractor does not have to pay.  That's great right up until you get hurt on the job, then you're ****ed, and if you get laid off you're not eligible for unemployment.  I suppose a server rack could have fallen on me, but it didn't.

  • I don't have any of the alleged "protections" of an employee.  The job requires deliverables, not time put in.  Big difference.  You wind up doing 80 hours in a week?  Tough ****.  Oh, and since you're 1099 there's no overtime either; your billing rate is your billing rate.  Period.  I used to snicker when some of my staff at MCSNet would bitch about being assigned hours way beyond 40, usually during trade shows and such when it was all hands on deck!  Heh, it's a lot of extra work and it may be an imposition on your personal life but you're getting paid time and a half for it, and it's not because I want to, it's because it's the law that I must!  You work 60 hours, which is a lot, you earn double your usual wage -- and you want to bitch?  I can only say "shut up and pay me *******!" in response to those complaints, because I would have given my left ball for time and a half when I was doing 1099 work -- or when I was exempt.  Ditto on any sort of seniority or protection against a canceled project (yeah, that happens a lot too) or simply because the guy that is running the project decides one day that he wants someone with***** to look at.  You're gone, period, and good luck suing.  At will states have few protections against being fired just 'cause I wanna, but as a 1099 you have zero protection against that.  About the only thing you can do is contract blocks of billable hours, which (for a sizable discount) you can sometimes get a client to take. If they ****can you before the block is consumed they have to pay you for the rest, but trust me, the discount demanded for that isn't usually worth it.

I never did this when I ran MCSNet, although it was tempting more than once.  The reason is that it was my money on the line without having venture funds or an IPO under my belt -- and there is a significant risk of the IRS coming back at you and trying to reclassify everyone.  If that happens you're ****ed and done, and what usually perks up their eyebrows is when one of your 1099s fails to file or pay taxes and they go trying to figure out where to the get the money from.

The worst part of a reclassification is that it is retroactive for a good period of time and even if the 1099 guy filed and paid his FICA, Medicare and income tax if they win you'll get assessed it anyway, and you can't claw it back from him!  So the government basically gets to double-dip you, and what they're dipping is long, hard, and dry.  You figure out where they dip it.  Then they'll take Round #2 out of your ass for unemployment and workman's comp, retroactively as well.  This can very easily put you out of business immediately, considering that you think you transferred that cost to the 1099 guy when in fact you basically overpaid him in the amount of those assessments -- pay that likely makes your firm retroactively uneconomic and destroys it.

No thanks.

When the money isn't yours, however, then it's easy.  Go ahead and do it. If it blows up in your face who cares?  Yeah, your little startup blows sky high but you can start another one, and the payday you were really looking for was at the IPO anyway.  So, you blew it -- but you're not bankrupted by it, because it wasn't your capital -- at least not most of it.

That's the problem, in a nutshell, that exists with things like "fines" against Wall Street banks and similar -- it's not the management's money that gets taken and nobody goes to jail -- it's "someone else's" money.

Bonne chance "angels"; you have this ramjob coming and it's your own damned fault.

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Hmmm....

http://www.youtube.com/watch?v=yw_0WHPvL0M&feature=youtu.be

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Alibaba has opened and is trading right near $98/share.

This puts the company at a market valuation approximately equal to WalMart.

This is claimed to be "a titan of tech", albeit in China.

Oh smiley

I fully expect this stupidity will go on for a while, but the fact remains that it is stupid, and I don't know when the crack-up will come but I am very sure it will.

The usual refrain will be that "Twitter is a bargain" compared to Alibaba, or similarly eBAY and on and on and on.

Oh please.

Tulips were great currency too - once.  Then they were just pretty flowers, as they were before.

I'm not going anywhere near this piece of crap, but I sure do see the shoeshine indicator lighting up nice and bright in the drug-addled haze of Wall Street.

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Yes, you should trust your school system and its staff members with your special-needs child who they use as bait to try to catch a sexual predator.

"A school board cannot avoid summary judgment as a matter of law when a school administrator willfully ignores a plan to use a 14-year-old special needs student as bait to catch a student with a known history of sexual and violent misconduct, and as a result, the student is sodomized," reads the federal brief filed in the 11th Circuit Court of Appeals late today.

You got that down here folks?

Your school administration thinks it has the right to use your 14 year old kid as bait to catch a sexual predator they know is in their school building with their consent.

They devise such a plan (which, I might add, cannot come with said "bait's" consent because she's not of age to give consent) and then blow it on top of that and she gets raped.

Yeah.

The first crime was the arrogation of a right to use the girl as bait in the first instance.  If no act had occurred beyond that it should still be a criminal felony.  But no, it gets better!  Not only did they set this up they then failed to put anyone in the bathroom where the alleged "bait" was supposed to result in a "catch" and the girl was in fact raped.

And for this we have a lawsuit instead of felony criminal charges laid against everyone in the school that knew about or participated in it, and the school is (as usual) trying to duck responsibility, civilly or otherwise.

**** you all among the so-called "prosecutors" and "law enforcement" in Alabama who have failed to indict everyone responsible.

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No, this isn't a novel.  Sorry, the Ticker doesn't do fiction, and especially not apocalyptic fiction.

I'm talking about reality here, in the wake of the failed Scottish vote.

Reuters reports:

(Reuters) - The failed Scottish vote to pull out from the United Kingdom stirred secessionist hopes for some in the United States, where almost a quarter of people are open to their states leaving the union, a new Reuters/Ipsos poll found.

There's no such thing as a "hope" when it comes to this.  You either believe it would be good or you believe it would be bad.

Washington is likely to ignore those who think it would be good.  But they should do something about it instead -- although I'm quite sure they won't.  Indeed, not only won't they do anything about it but neither will those political entities, such as the Libertarians, that could capitalize on this.

Let me note that a quarter of the electorate is radically beyond any vote count that the Libertarians have ever collected, yet they're too idiotic to look at the economics of the matter and focus there.  

Know where I'm going yet with this?  Right here:

Today's Census Bureau report on health insurance in 2013 shows that on the eve of Obamacare, whether you had coverage was largely a question of how much money you made....

....

But the chart above is still one of the best possible arguments for the necessity of Obamacare, by demonstrating that the government programs preceding the law are too narrow to cover the poor. It shows that even with the existence of Medicaid, the Children's Health Insurance Program and other assistance, health coverage in the U.S. remains a luxury good -- one that the rich can afford but others struggle, in proportion to their income, to obtain.

Health "coverage" is a luxury good.  It should be -- and it should be an unnecessary purchase.

It is, by the way, exactly that the day after we enforce long-standing laws that are supposed to bear on the behavior in the medical marketplace, both by addressing the existing violators and removing the special protections that make much of what they do legal despite blanket laws that are supposed to make that conduct illegal everywhere in the United States.

It is only through that special protection that medical care is expensive enough for you to "need" health insurance in the first place.

I'm going to continue to put a number on this -- health "care" is not only of dubious quality when it comes pretty-much anything that doesn't involve fixing injuries and similar, but it is intentionally full of monopoly practices that under The Sherman and Clayton Acts are supposed to be federal felonies with 10 year prison terms and $1 million fines attached.

This in turn drives the price of such services up by 10 times and often more what it should be -- in some cases by factors of 100, 1,000 or even more.  That's the only way $200 worth of scorpion antivenom can cost $60,000, three hundred times the market price.  It is the only way that a $20 test can cost over $1,000, fifty times the market price.  And it is the only way that one half-hour of a physician's assistant time, worth perhaps $100, can cost $9,000 (to bandage a finger), or ninety times the market price.

It is also the only way you can actually put a $10,000 charge on someone's bill for a service that was never performed at all and not go to prison immediately for fraud and, when you threaten someone with collection for refusing to pay the bogus charge, extortion.

These acts happen every single day, they're intentional, the drug companies openly brag about conspiring to do so in the setting of their prices and nobody lifts a finger to stop it.

That's nuts but it's also reality.

The Federal Government not only refuses to stop this they're a big part of the cause of it, openly conspiring to fix prices.

A state or group of states that refused to permit this and seceded would instantly increase the buying power of everyone in the economy of that state by at least 10% and probably more.  It would also instantly become the destination for medical tourism to an extreme degree, effectively draining the revenue from the monopolists everywhere else in what was left of the United States.  And while such a state or group of states would not be able to deficit spend (especially if it refused to pay any part of the debt the US Treasury took on over the last 30 or so years) that's good, not bad as it would cause the purchasing power of those in the seceded areas to go up rather than down.

Within months the disparity would become apparent in the population, and it would be to the benefit (on balance) of the seceded area.  Yes, there would be losers, with the biggest group being those who gouge the public in the medical field.  They'd lose big, but everyone else would win big.  There would be much wailing and gnashing of teeth, but society would be better for it on-balance.

And if it worked, and I believe it would, not only would people flock to the seceded territory, especially those of means and industry, further draining the swamp, but pressure would mount fast for the remaining territory to join with the secessionists.  Nothing breeds success like success.

We could end up with Washington DC being all that was left, with no productive capacity beyond the ability to ask would you like fries with that?  The credit rating of the remainder would go in the toilet as well, and with it the influence of the so-called "creditors" who had bought the worthless paper (hello China!)

As for threats to do something militarily about it?  I doubt it very much in today's world, and here's why -- the mere act of secession would create a credit event, and that would make further deficit spending an impossibility.  To put down such an act by force of arms would require lots of money, and there wouldn't be any -- never mind that it would also require ordering the military to fire on the members' neighbors and friends, an inherently messy scenario that is by no means assured to be honored.

I'll take the under on Washington being able, in the 2000s, to muster a military response to a peaceful act of erecting the middle finger.  And frankly, were it to happen, I'd almost-certainly move there and might have a reason to start another business -- an act that I won't even contemplate in the US as it exists today.

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