Guest blog by Steven Miller
(This is the 5th of 6 guest posts in which Miller discusses the corporate vultures descending on the Bay Area)
San Francisco’s Invasion by Corporate Predators – Part V
These are the best of times…. or so it appears. San Francisco is succeeding Detroit as the pre-imminent manufacturing city in America… except it does not manufacture tangible products. This development is amazing, since the city is isolated on a peninsula and never developed a large manufacturing base in the Industrial Era. For decades a Western center of finance, San Francisco is becoming the center of the high-tech industry, which produces intangible digital products, an extension of Silicon Valley 50 miles south.
The city’s population is over 800,000, the highest in history, as tech workers flood the city. Carl Guardino, president and CEO of the Silicon Valley Leadership Group notes that well over 100 of his 391 member companies “either have headquarters or a strong physical presence in San Francisco”. (15)
The economy of the Bay Area has reached pre-2008 levels, but with 200,000 fewer jobs. The difference is in the greater use of electronic technology, which inevitably means laborless production. (16)
In this respect, the economies of San Francisco and Detroit are moving in the same direction. This trend, reflected throughout the US and the world in general, gives the lie to glib pronouncements by politicians that they will create more jobs. The hard reality is that there will be fewer and fewer jobs because technology needs ever fewer production workers.
Electronic technology is now so productive that it no longer requires people work 40 hours a week. Thus corporations are engineering Temp World right before our eyes. Part-time workers, permatemps, precariats, contingent workforce, outside contractors, flexible contract workers, personal entrepreneurs – the names change, but a new model of work is being imposed. (17)
One of the city’s vaunted hi-tech start-ups is Task Rabbit, where someone posts a job on line – anything from moving a couch to creating a website – and a mob of desperate workers, many with advanced degrees, compete to place the lowest bid. This is the hi-tech version of the day laborer shape-up that happens every morning as construction workers, mostly without papers, battle each other to work for contractors. This trend reflects capitalism’s latest production model of outsourcing production through chains of sub-contractors.
At the other end of the pole, well-off techies have suddenly discovered the wonders of capitalism and wax profound about the libertarian virtues of a society where everyone free-lances. Though they believe they are creating the new glamorous world of work, they are simply establishing the visionary model of capitalist work in the electronic era, articulated in the 1994 Fortune Magazine article “The End of the Job”:
“As a way of organizing work, the traditional job is becoming a social artefact, created in the 19th century and well suited to the demands of a newly industrial world, but poorly adapted to a fast-moving, information-based economy. Its demise confronts everyone with unfamiliar risks — as well as rich opportunities.” (18)
Laborless production generates the polarization of wealth, the polarization of the job market and the polarization of society. Techies can afford to pay super-high rents. Immediately after the Melt Down, a massive wave of evictions swept the country. Many of these have been shown to be completely illegal. Now a new wave of evictions is being implemented across the city, leading to the eviction of working class families across the city. Evictions of entire buildings for purposes of sale are up 170% since 2010. (19)
Rebecca Solnit describes the Google buses that roam the San Francisco, picking up tech workers to carry them to Silicon Valley, “Most of them are gleaming white, with dark-tinted windows, and some days I think of them as the spaceships on which our alien overlords have landed to rule over us. (20)
The new evictions really reflect the penetration of speculation through the economy. Wall Street’s new campaign is to turn rental homes into cash cows! The banksters caused the 2008 Meltdown by bundling predatory mortgages together as “a security” that could be bet on, either for or against. Now they are securitizing rents themselves to serve as fodder for the new amped up Casino Economy. When the next crash hits, will Americans again be so gullible to accept the “too big to fail” line once again?
Dave Ransom reports on how this is going down in the San Francisco Bay Area:
“Oakland-based Waypoint Homes, for instance, calls itself “a next generation real-estate company.” It holds title to more than a thousand homes. And it is attracting serious capital to buy several thousand more—$2 billion from Silicon Valley venture capitalists and real-estate investors.
“Waypoint buys foreclosed homes from banks or in auctions on the courthouse steps, generally at a steep discount. After fixing them up, it rents them out for a good deal less than the original mortgage payment.
“That sounds good until you realize that, if the banks had offered the families living in the homes the same deal they offered Waypoint, those families could probably have avoided foreclosure entirely.
“This spring, the Obama administration announced a plan to sell foreclosed homes owned by the government’s housing agencies—Fannie Mae, Freddie Mac, and the FHA.
“But the hedge funds and private-equity firms are pressuring the administration to offer them cheap financing and guarantee they will be bidding on lots of as many as a thousand homes at a time.
“Who currently holds the mortgages to these homes? We the People do—the 99%. Fannie Mae, Freddy Mac, and the FHA—all government backed and bailed out by the taxpayers—hold half the country’s mortgages, dumped there by the banks when the housing bubble burst. (21)
Thom Hartman describes the same phenomenon nationally in his book The Crash of 2016:
“Among the firms and big banks buying up America’s real estate is the Blackstone Group, the largest private equity firm in the world. The Blackstone Group alone has bought nearly 40,000 houses across America, spending $7.5 billion in the process.
“Blackstone, for example, bought 1,400 homes in Atlanta in one day, and owns nearly 2,000 houses in the Charlotte, North Carolina metro area.
“So why are Blackstone and other Wall Street firms buying up foreclosed homes all across the country? It’s simple. By renting these homes back to Americans, and securitizing America’s home-rental market, they can bundle up rental payments the same way they used to bundle mortgage payments, and sell them to investors.”
“The predators are again up to their old tricks. Nothing has changed.” (22)
This is madness! The speculative section of capitalism is in the driver’s seat, but the only solution they can offer to any problem is… more speculation. They use carbon futures to speculate on the very atmosphere, and intend to make a profit all the way through Global Warming and the end of human society, as we know it.
References and Resources
15) Patrick May, “Is it now the ‘Silicon Bay Area”? Oakland Tribune. 11-13-2013
16) Caroline Said. “S.F. Bay Area economy thriving despite challenges”. 3-17-2012
17) NPR Staff. “A ‘Permatemp’ Economy: The Idea Of The Expendable Employee”. January 28, 2013
18) William Bridges. “The End of the Job”. Fortune. September 19, 1994
19) SF Chronicle. City Insider. 12-29-13
20) Heather Knight. City Insider, SF Chronicle, 12-15-2013
21) Peoples’ Tribune, October, 2013
22) Thom Hartman. “Are the Bankers Now Setting Up the Crash of 2016?” 12-3-2013
To be continued.
Steven Miller has taught science for 25 years in Oakland’s Flatland high schools. He has been actively engaged in public school reform since the early 1990s. When the state seized control of Oakland public schools in 2003, they immediately implemented policies of corporatization and privatization that are advocated by the Broad Institute. Since that time Steve has written extensively against the privatization of public education, water and other public resources. You can email him at email@example.com
Originally posted at Daily Censored
photo credit: Wikimedia Commons