Monday, June 4, 2012

VIDEO: Planned Obsolescence ("The Lightbulb Conspiracy")

This video is well worth an hour of your time: Yes, there are many documentaries out there about over-consumption, consumerism, etc, but this one stands out from the rest, in that it makes this excellent observation on the world economy: Our economy is based on over-consumption and consumerism, even planned obsolescence of products, and cannot function if the people were to overcome these "bad habits".

The documentary uses the life expectancy of a light bulb or a printer to show how companies are trying to lower the life expectancy of their products. After all, if products were designed to endure for ever, there would be no need for us to work long hours - the global economy would collapse and unemployment would soar, unless of course we were to work for only a few hours a day. But that would be terrible for our rulers, who would probably be made obsolete.

Please remember this MUST-READ article from Orion Magazine:
[...] Just ten years later things looked very different. Cars dominated the streets and most urban homes had electric lights, electric flat irons, and vacuum cleaners. In upper-middle-class houses, washing machines, refrigerators, toasters, curling irons, percolators, heating pads, and popcorn poppers were becoming commonplace. And although the first commercial radio station didn’t begin broadcasting until 1920, the American public, with an adult population of about 122 million people, bought 4,438,000 radios in the year 1929 alone.

But despite the apparent tidal wave of new consumer goods and what appeared to be a healthy appetite for their consumption among the well-to-do, industrialists were worried. They feared that the frugal habits maintained by most American families would be difficult to break. Perhaps even more threatening was the fact that the industrial capacity for turning out goods seemed to be increasing at a pace greater than people’s sense that they needed them.
It was this latter concern that led Charles Kettering, director of General Motors Research, to write a 1929 magazine article called “Keep the Consumer Dissatisfied.” He wasn’t suggesting that manufacturers produce shoddy products. Along with many of his corporate cohorts, he was defining a strategic shift for American industry—from fulfilling basic human needs to creating new ones.

In a 1927 interview with the magazine Nation’s Business, Secretary of Labor James J. Davis provided some numbers to illustrate a problem that the New York Times called “need saturation.” Davis noted that “the textile mills of this country can produce all the cloth needed in six months’ operation each year” and that 14 percent of the American shoe factories could produce a year’s supply of footwear. The magazine went on to suggest, “It may be that the world’s needs ultimately will be produced by three days’ work a week.”
Businessmen were not happy about this prospect -> Read the rest of the story here:

Anyway, back to the documentary, here is a short description of it (via imdb):
Once upon a time..... products were made to last. Then, at the beginning of the 1920s, a group of businessmen were struck by the following insight: 'A product that refuses to wear out is a tragedy of business' (1928). Thus Planned Obsolescence was born. Shortly after, the first worldwide cartel was set up expressly to reduce the life span of the incandescent light bulb, a symbol for innovation and bright new ideas, and the first official victim of Planned Obsolescence. During the 1950s, with the birth of the consumer society, the concept took on a whole new meaning, as explained by flamboyant designer Brooks Stevens: 'Planned Obsolescence, the desire to own something a little newer, a little better, a little sooner than is necessary...'. The growth society flourished, everybody had everything, the waste was piling up (preferably far away in illegal dumps in the Third World) - until consumers started rebelling..
And here's a wikipedia article on  Planned Obsolescence:
Planned obsolescence or built-in obsolescence in industrial design is a policy of planning or designing a product with a limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time. Planned obsolescence has potential benefits for a producer because to obtain continuing use of the product the consumer is under pressure to purchase again, whether from the same manufacturer (a replacement part or a newer model), or from a competitor which might also rely on planned obsolescence. 
In some cases, deliberate deprecation of earlier versions of a technology is used to reduce ongoing support costs, especially in the software industry. Though this could be considered planned obsolescence, it differs from the classic form in that the consumer is typically made aware of the limited support lifetime of the product as part of their licensing agreement.

For an industry, planned obsolescence stimulates demand by encouraging purchasers to buy sooner if they still want a functioning product. Built-in obsolescence is used in many different products. There is, however, the potential backlash of consumers who learn that the manufacturer invested money to make the product obsolete faster; such consumers might turn to a producer (if any exists) that offers a more durable alternative.

Estimates of planned obsolescence can influence a company's decisions about product engineering. Therefore the company can use the least expensive components that satisfy product lifetime projections. Such decisions are part of a broader discipline known as value engineering. 
Origins of planned obsolescence go back at least as far as 1932 with Bernard London's pamphlet Ending the Depression Through Planned Obsolescence. However, the phrase was first popularized in 1954 by Brooks Stevens, an American industrial designer. Stevens was due to give a talk at an advertising conference in Minneapolis in 1954. Without giving it much thought, he used the term as the title of his talk.
From that point on, "planned obsolescence" became Stevens' catchphrase. By his definition, planned obsolescence was "Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary.
The term was quickly taken up by others, but Stevens' definition was challenged. By the late 1950s, planned obsolescence had become a commonly-used term for products designed to break easily or to quickly go out of style. In fact, the concept was so widely recognized that in 1959 Volkswagen mocked it in a now-legendary advertising campaign. While acknowledging the widespread use of planned obsolescence among automobile manufacturers, Volkswagen pitched itself as an alternative. "We do not believe in planned obsolescence," the ads suggested. "We don't change a car for the sake of change."
In 1960, cultural critic Vance Packard published The Waste Makers, promoted as an exposé of "the systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals."
Packard divided planned obsolescence into two sub categories: obsolescence of desirability and obsolescence of function. "Obsolescence of desirability", also called "psychological obsolescence", referred to marketers' attempts to wear out a product in the owner's mind. Packard quoted industrial designer George Nelson, who wrote: "Design... is an attempt to make a contribution through change. When no contribution is made or can be made, the only process available for giving the illusion of change is 'styling!'"
Planned obsolescence tends to work best when a producer has at least an oligopoly.
Before introducing a planned obsolescence, the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence, there is an information asymmetry between the producer–who knows how long the product was designed to last–and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. When Japanese vehicles with longer lifespans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products.
Types of obsolescence
Technical or functional obsolescence

The design of most consumer products includes an expected average lifetime permeating all stages of development. Thus, it must be decided early in the design of a complex product how long it is designed to last so that each component can be made to those specifications.

Planned obsolescence is made more likely by making the cost of repairs comparable to the replacement cost, or by refusing to provide service or parts any longer. 
Systemic obsolescence

Planned systemic obsolescence is the deliberate attempt to make a product obsolete by altering the system in which it is used in such a way as to make its continued use difficult. New software is frequently introduced that is not compatible with older software.
Style obsolescence

Marketing may be driven primarily by aesthetic design. Product categories in this case display a fashion cycle. By continually introducing new designs, and retargeting or discontinuing others, a manufacturer can "ride the fashion cycle".
Obsolescence by depletion

When a product consumes a resource, as when a computer printer consumes ink and paper, it is generally understood that this is unavoidable. But some products also consume related resources that need not be consumed. For example, a 4-colour inkjet printer that is used mostly for printing in gray scale and seldom in colour, may be pre-programmed to deplete colour inks while printing black, so that the colour cartridge(s) must be replaced more often.
Innovation is important - it's almost as important as "creative destruction". This is probably the reason why Steve Jobs was so important - he was a capitalist, but he was a capitalist of a dying breed of capitalists: He was an innovator, a creator of new markets, instead of a technocrat who simply fired his employees by the thousands each time his company wasn't doing well because of the luck of innovation (think HP, Nokia, etc.). Of course, Apple's early products (the Macintosh, the mouse, etc.) were much more "useful" that its current products (the ipad, etc). Apple is now essentially relying on the desire of "the common people" to feel special by owning a fashionable item they don't really need (style obsolescence). If all those ipad owners were to stop buying the newest ipad model, Apple would collapse (and the same thing applies to most of the other companies as well). So, "Planned Obsolescence" is the only way for them to rmain in power, and for us to remain poor and unsatisfied.


Here's the documentary:

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Friday, June 1, 2012

Gold and the jobs report: If you only knew the power of the dark side

Well, in case you haven't noticed, is once again over 1600$/ounce. This "sudden" move was triggered by the US May Jobs Report, which Marketwatch described as "disappointing":

U.S. stocks sink after disappointing jobs report
Stocks on Wall Street fell sharply on Friday after a disappointing U.S. jobs report and downbeat data from China and Europe raised serious concerns about the health of the global economy.
“Disappointing payroll data in combination with mounting external risks obviously increase the pressure on the Fed to apply further stimulus,” wrote Bernd Weidensteiner, an analyst at Commerzbank AG, in a note, with the euro-zone sovereign debt crisis being the main external risk.
So, there is no recovery after all, is there? The US Jobs Report can -and is- be manipulated. Especially during the last few months, the "Bureau of lies and scams" as The Burning Platform nicknamed it has been working overtime in order to persuade us that the recovery is real - here is an article dated 05/04/2012:

The employment report from the BLS just hit the wires.

The unemployment rate FELL to 8.1%. This is the lowest level in years. All hail Obama and his fantastic management of our economy.

So let’s look at how we achieved this reduction in the unemployment rate. Here is a link to the data:

Here are the facts:
The working age population rose by 180,000 people
The number of employed people DROPPED by 169,000.

Hmmmmm. Wait a second. If there are more working age people in the population and less employed people, a critical thinking individual might wonder HOW THE FUCK did the unemployment rate DROP?

Oh don’t worry your mind over such trivialities. Our friendly drones at the BLS have it all figured out. You see 522,000 Americans willingly decided their lives were so fulfilled and their financial situation was so good, they decided to kick back and leave the work force.

The country has another new record. There are 88,419,000 of us who don’t want or need a job. The participation rate of 63.6% is now at a 30 year low, back to levels before many women joined the workforce.

But wait a minute: IF the government can manipulate the jobs report, why didn't they do it this time around? Well, this is where the plot thickens, as they say. Here's Jesse on the subject:
I looked over the Jobs numbers earlier this morning, and checked the usual suspects. Imaginary additions were 204,000 which are right 'in the groove' for the normal pattern we see for May each year.
If anything the seasonal adjustment was shaded to the downside, meaning that it would have not taken much or been out of the norm to have taken away LESS jobs in the seasonal adjustment, and brought in a report that was in line with expectations.
So why put out a weak number when one could have statistically justified a stronger number?  Besides 'sand-bagging' now with an eye to the second half of the year?
There are an important set of central bank decisions coming up, including the FOMC meeting shortly after the Greek elections at mid month. This weak Jobs number gives Bernanke the cards he needs to play in responding to the evolving crisis.
And you know what that means.
And this is why gold and silver diverged so hard this morning to the upside. They had been artificially pressed down for the May-June contract expirations, and some might say to lessen the impact of their rally when the inevitability of QE became evident.
I am just wondering how the Feds will try and spin it.
Gentlemen, start your presses. But try not to be too obvious about it.
It's easy to pin it all to Bernanke and the FED - but as we've explained before, if you really want to find the root of all evil, you'll have to search harder:

In a nutshell, the bankers have been handing out one loan after another, in order to substitute for the industrial capital's flight to Asia: The West's productive base has been shrinking for quite a while now, but the loans handed out out by the bankers have been masking this uncomfortable truth for all these decades So, the multinationals have been getting richer and richer by exploiting the -massively underpaid- Asian workforce, and the banks became bigger and bigger (they are now "too big to fail", and Goldman Sachs's CEO even considers himself as doing God's work - talk about hubris).

But the economy reached a point where the Western worker simply couldn't pay for his mortgage (that's a bit of an over-simplification, but you get the point). So, now the banks are in trouble as well, because if they can't collect the money they were supposed to collect from the recipients of those loans, they are bankrupt (ALL of them). Let's not forget Lehman's collapse, not to mention the hundreds of other (smaller) banks that have gone bankrupt in USA over the last four years.

But, as we all know, most banks are being rescued via your -and my- money. But the banks need a lot of money. Well, I know that they have already received huge bailouts, but that's not enough. Banks are failing in Europe (now it's the Spanish banks, then Greece again, etc) and in USA, stocks are going down, and it seems like everything is about to collapse.

But guess what - no matter how much the banks need, money can be printed in today's economic system - and they will.

States all over the world have been printing money for quite some time now, and they continue to do so. Savings the banks is more important than preserving the value of their currencies, so...they will inflate these currencies. And as more and more people realize this, these currencies will hyper-inflate, as noone will want to trade ("loss of confidence") in a currency that keeps losing value compared to gold, the only thing that will remain stable, as it always does.

[By the way, did you hear about China and Japan's deal to trade with each other in their own respective currencies, instead of using the dollar? Or maybe about China's deal to buy oil from Iran in exchange for yuan, instead of dollars? Oh, and guess what, China and Russia are no longer buying a lot of US bonds, are they? They are however buying gold...]

As for the workers, printing money is a great way for the ruling class to stealthily lower their wages, making them more "competitive". After all, they do have to compete against the dirt-cheap Asian labor-force, don't they? So, they only way to go forward, according to our rulers, is for us to become really poor, and for them to receive huge bailouts, making them even more powerful than they already are. This is the only way they will return to the West for investments - until the workers accept "modern serfdom", the capitalists will simply let them starve. Hunger will take care of the rest. And since our rulers are already doing God's work, they could even declare themselves to be Gods, like the Pharaohs. And why not? Their will is our command, isn't it?

But this process of debasing the currency has to be completed "one step at a time". If they print everything at once, everyone will be on to them, and things will get out of hand. So, they first let the stock market almost crash, and then they "save the day", by printing more and more money. This has already happened a lot of times, and it will probably continue to happen in the future, in both USA and in Europe (Europe is an even more complicated case, since it is a monetary union of many different States: Germany is letting everyone else crash, and only then they allow the ECB to print money (in order to save the German banks among others). But before Germany agrees to money printing, they always hold a conference, where they propose a few new treaties, that give them more and more control over their fellow eurozone members protectorates. So, it's a bit more political in the eurozone compared to the situation in USA, but the economics of it are pretty much the same, and  the ECB will also print money sooner or later, and one way or another).

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