October 29 2019
We Work is yet another example of a classic 'bubble'.
Whether its the South Sea:
Or Asteroid mining:
The Internet has made this phenomenon far more frequent, occurring over an ever shorter time period, exploiting the permanent gullibility of most humans.
What is different with its modern occurrence is that it is now rare for the instigators, like Neumann to suffer.
They lose nothing.
The not-so-secret secret here is that the founders and financiers typically make out like bandits.
Time was, an entrepreneur had to get loans to finance growth based on demonstrated ability to pay.
Often, that owner would not pay him or herself
until there were profits to support it.
Wealth came with earnings.
Now, wheeler-dealers with an idea cast themselves
as CEOs from day one.
The vulture capitalists fund based on personality, fantasy financials, and fuzzy ideas like “blitz scaling.”
Both the founder(s) and the deal-makers get paid wads of cash from day one and share in the “equity” generated
— not by the business —
but by cash provided by smaller, downstream investors.
If the business fails, the money from those downstream investors still pays the gang at the top handsome returns:
In the case of WeWork one thousand, seven hundred million dollars to a guy who never created anything or made one, red cent in profit.
These charlatans talk about “creating value,” creating jobs and “eating what they kill” but what they are really doing is scraping cash off in what sensible people recognize is a Ponzi scheme.
This is enabled, of course, by politicians too busy politicking to properly understand what’s going on.
Lock them all up!