The dangerous aristocrats of finance

By Edward Hadas
May 29, 2013

In many ways, the financial world has changed remarkably little in the five years since the 2008 financial crisis. Yes, banks, brokers and other intermediaries are neither as profitable nor as popular as in the pre-crisis years. However, the industry is still arrogant, isolated and ridiculously lucrative. Leading financiers look more like pre-revolutionary aristocrats than normal businessmen.

Pay is the most obvious sign of this privileged social position. Consider JPMorgan, a fairly typical financial firm in terms of remuneration. Last year, the annual compensation per employee was $192,000.

That already seems high, but the measure includes the majority of employees whose pay is bunched around the $45,000 average for non-supervisory U.S. workers in finance. Assume that two-thirds of Morgan’s employees were in that group. For the rest, the people at the top and upper middle of the company, that leaves an average pretax reward of $485,000 – more than 10 times the norm of the lower orders.

Few senior hedge fund managers, successful inter-broker dealers or other high earners in finance see themselves as seriously overpaid. They are wrong.

The rewards for financiers are excessive by three standards. First, professionals with comparable skills earn much less. Second, financiers are paid far more than is merited by their contributions to the common good. It is telling that the most richly rewarded financial activities – trading, advanced financial engineering and sales – are more likely to subtract than to add economic value. Finally, there is the matter of justice. Penance was in order after the industry’s foolish behaviour in the years leading up to the crisis. But instead of sackcloth and ashes, or bread and water, there are designer clothes and helicopter skiing, caviar and champagne.

The excessive pay can be interpreted as a sign of unfair or inefficient markets. It is that, but I think the deeper cause is not so much economic as sociological. Financiers have persuaded the broader society that they are modern aristocrats. Pampered lives are part of the package. They go along with an unthinking sense of entitlement and a mix of self-righteousness and self-centredness, with just a hint of condescending tolerance for limited criticism.

Of course, today’s financial aristocracy is different from traditional nobility. The contemporary titles (partner, managing director) and privileges (first-rate education, political influence) are not exactly hereditary, and long hours on the job have replaced a life of leisure. But I believe the commonalities are more significant.

Old aristocrats believed they protected social stability and dismissed radical critics as ignorant and disruptive. Similarly, most financial aristocrats are certain that the world would be much worse off without them and that their exalted position is good for everybody.

Ask an articulate trader about the social value of playing the yield curve to the detriment of clients, and the response will have the same unthinking certainty as a French count asked about the justice of the corvée. The trader dismisses radical critics as well-intentioned but ignorant about the importance of high (and highly paid) finance.

In my view, the sociological analysis provides more insight into the industry’s condition than the more common argument about “heads I win, tails you lose” incentives. I rarely meet financiers who would admit to being reckless or wasteful. What I observe is sublime and blind self-confidence.

Living largely with other members of their caste, they rarely have doubts. To them, more finance is always better than less and higher margins always better than lower. They welcome the development of more complicated financial products; they don’t worry much about the effect of these products on the rest of the economy.

Why has the financial aristocracy been able to hold on to so many of its privileges, despite its colossal failure in 2008? Again, look to sociology. There has been no revolution because there is no social force comparable to the rising French urban bourgeoisie, which exposed the uselessness of the old rural aristocracy, and eventually replaced them.

Right now, almost all power groups seem to be in thrall to the money men. Central bankers, who have good reason to complain, are either financiers themselves or unable to resist their pleas for special treatment. Politicians, who have even more grounds for discontent – the majority of voters who borrow and suffer in the financiers’ credit-intensive economy – pay them court. Regulators, who should be shocked and appalled, are easily bamboozled or bought off with promises of joining the aristocracy later. Even borrowers are often grateful for their expensive loans.

Still, a revolution may come, even if the disempowered 99 percent don’t rebel. China is in a good position to play the leading role. Its trade surpluses, recycled into financial markets, help make the industry highly profitable. Whenever that money disappears, the current system could fall apart, and its leaders might finally learn something like humility.

 

31 comments

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Mr. Hadas,

It is almost inconceivable, but I find myself in agreement with you, even though you slip a bit on the final paragraph.

“Still, a revolution may come, even if the disempowered 99 percent don’t rebel. China is in a good position to play the leading role. Its trade surpluses, recycled into financial markets, help make the industry highly profitable. Whenever that money disappears, the current system could fall apart, and its leaders might finally learn something like humility.”

Perhaps the strain of telling the truth for a change was more than you could bear.

Posted by EconCassandra | Report as abusive

It is an aristocracy of sorts. A club where you must know others to benefit from the insider information and use your corporate gains to scratch each other’s back.

A good hacker reporter would have a field day with hacked texts to disclose the extent of the financial aristocracy laziness and financial sleaziness. Don’t even have to meet for lunch to trade secrets – text will do.

Heredity is still part of the new world financial club/aristocracy. Just not that obvious.

Posted by Butch_from_PA | Report as abusive

Perhaps I could work at Reuters. I knew this years ago. I attended a privileged prep school on a scholarship, so while I wasn’t part of the privileged class, I was an observer. While the overall experience was academic, tertiary wisdom was gleaned witnessing the brat-child antics and behaviors of my classmates. It was an epiphany. These kids came from excess and thus behaved excessively – by and large. The ‘system’ is shaped to favor the privileged class as well and my experience in prep school has shaped my attitude towards many things – finance, law and justice, politics, careers, etc. Is it any wonder that these ruling-class attitudes are reshaping the American experience and lifestyle and thus creating a further division between the ‘haves’ and the ‘have-nots?’ It reminds me of France, pre-revolution.

Posted by wooleyes | Report as abusive

Revolution needs new ways of production, not new kind of authority. French revolution happens because merchants and industries enabled ways of producing wealth that did not rely on centralised control on land, i.e. revoked raison d’ĂŞtre of feudalism and consequently feudal aristocrats. Technology that enables micro finance, bitcoin and crowd funding and distributes control of capital and reduces need of centralised form of it can make revolution, not China!

Posted by Earnesto | Report as abusive

Well said, Mr. Hadas!

Posted by OneOfTheSheep | Report as abusive

Sociology, psychology… some pixie dust… take a look at the way markets (investors) blackmailed governments and people in Europe, hurting their own long-term interest in process. Crazy stuff…

Of course it can happen, it will be most welcome. Best part is, imo that is, that parts of these financial apparatchiks can’t reach minimum safe distance.

”An observer crossing a black hole event horizon can calculate the moment they have crossed it, but will not actually see or feel anything special happen at that moment.”

***

Two bankers wait for the bus; a lovely lady drives by in F12berlinetta. Bankers catch a glance, one looks at the other… says: ”She earned it, she’s a miner”.

Cheers,

Posted by satori23 | Report as abusive

Thank you for shining more light on this crucial topic. In my opinion this is the single most important issue currently confronting our nation, because it affects everything else. As this op-ed points out, this is the modern day equivalent of what drove our nation’s founders to revolt. They resented the fact that they were being taxed without having any representation, and frankly in many ways they had more economic freedoms than we now have.

There are economic centers of power that are able to exert that power because they control services and commodities that the rest of us need, like healthcare, food, fuel, wages, clean water, and government. They have manipulated the system to maximize their profits, which has increasingly hurt most Americans.

Take healthcare, for example. We have the most expensive healthcare system in the world. Our system has resulted in forcing millions of Americans into bankruptcy. A smaller percentage of our citizens have access to affordable healthcare than in any other developed nation. This Frankenstein of a system is the way it is because the most powerful executives running the industry, running OUR healthcare system, have focused on how to best maximize their profits rather than how to best get quality, affordable healthcare to all Americans. That would be the rational way to approach healthcare. But these profiteers who are running our system aren’t interested in having the most rational system. They’re only interested in profits.

There’s a lot about the plutocratic takeover of our government and economy that Americans should be angry about, but one thing that really gets my goat is how these industry titans enjoy all the advantages of being an American company without recognizing a responsibility to give something back. The US offers more security than any other nation in the world, and that’s no small thing. And now these plutocrats also have run of the most powerful government in the world. They determine our tax polices, our energy policies, much of our policies on national security, healthcare, and an ever-growing portion of our daily lives. And instead of giving back, they utilized those advantages so that they can avoid any responsibility to this country and its citizens. It’s all about profits, and greed.

Well, we know what’s happening. So now, what are we as Americans going to do about it?

Posted by flashrooster | Report as abusive

Previously you had to listen to Max Keiser with his crazy eyes and unbrushed hair to get a different view to the establishment. Now even Reuters, the dapper press house who inter alia service the financiers, is prepared to declare the Emperor has no clothes. I think the issue of the banks vs. society is far from over and hope that strong reforms come soon.

Posted by BidnisMan | Report as abusive

I don’t think China will change the course of centralized, bank-driven and dollar dominated capital markets. As for French revolution it will not start from a new authority, it will start from a new relations of production. Technology has been changing the way finance works, it already reduced margins significantly by enabling many more players to participate in the capital markets, and it will decentralize and publicize it more. A few keywords here are microfinance, Bitcoin and crowd funding.

Posted by Earnesto | Report as abusive

I agree with everything here, apart from the limiting of the analysis to finance.

CEOs in every sector have seen pay rise out of proportion to their contribution, or the pay of their workers.

There is indeed a new global elite, a new aristocracy. And it is as hereditary as it ever was. you try breaking into it.

Posted by Urban_Guerilla | Report as abusive

@ Flashrooster –

Outstanding comment. We need more participation like that to fight back against the propaganda machine.

I particularly like your use of the word “plutocrats”, which is an accurate description of this nation at this point — NOT a “democracy”.

Unfortunately, “we” Americans are far too fat, dumb and happy to do anything about it until it is far too late.

Meanwhile, all we can do is rage against the machine.

Thanks for a great post.

Posted by EconCassandra | Report as abusive

EconCassandra: Thank you. Sadly, you are right about American apathy toward this issue. We’ve been bamboozled, and unfortunately too many Americans are either very gullible or simply don’t want to think about such things. Coincidentally, I was talking to a friend of mine the other day about this very topic, just before I read this excellent piece, and he concluded our discussion with, “Well, now that you’ve made me depressed I’m going to go walk my dogs.” This is a typical response (with or without the dogs.) Understandable, but things will only get worse if we remain with our heads soundlessly buried in the sand.

I’m hoping that we’re seeing signs of people waking up to the realities regarding our shifting from a democracy to a plutocracy. Usually such a shift in public sentiment doesn’t take place until things get so bad the public has little choice. We’re getting there. Even though there’s room for things to get a lot worse, they’re already pretty bad, and the sooner we deal with it, the smoother the transition back to a sane democracy with a minimizing of collateral damage.

Op-ed pieces like this help. There are certain facts that we are living with that a majority of the public is unaware of, but they’re facts that everyone needs to know. My brother-in-law alerted me to this video that I think is just excellent, one that every American should watch (though half of those Americans would write it off as “class warfare” propaganda, despite the fact that it’s based on facts that can be verified: http://video.pbs.org/video/2296684923/

Posted by flashrooster | Report as abusive

The fed saved our financial system but isn’t that the system that keeps these punks in control. The fed is a revolving door of central planners from this financial aristocracy.

These little boys of finance try to act like big tough capitalist he-men until their escapades fall apart. They then become whiny children pleading with their pliant cohorts in government and the fed. Their come-on, the old saw of financial collapse that will result absent the chewing gum and bailing wire system made from their “financial innovation”. These bozos should have been called back in 2009, or better yet in 1998 with LTCM. Moral Hazard is a b**ch.

Posted by keebo | Report as abusive

The voice of Mr. Hadas is clear, true and responsible here. The voice of flashrooster and EconCassandra (really PseudoTurtle) occasionally hits a few good notes, but in the overall would wipe out capitalism, the true “engine of prosperity” in America, if they could.

They would kill and eat the goose that lays the golden egg. Short sighted and just plain dumb.

Posted by OneOfTheSheep | Report as abusive

As usual, OneOfTheSheep makes charges he’s unable to substantiate and then hurls insults based on those unsubstantiated charges. That says volumes about the kind of person you are.

No thinking person could read what EconCassandra and I have posted and come away thinking we were attacking capitalism. I’m a capitalist. I’ve told you that before. If I wasn’t, I’d have no qualms in saying so. Where you error is in making the common assumption among conservatives that capitalism can only exist with a loose, unregulated, laissez-faire structure. Any economic system needs structure. Capitalism is either structured by government or by corporate executives. Government doesn’t always make the right decisions, but at least we have some flexibility and control with government (or we did before our government was bought out by corporate interests). When we leave the rule making for our economy up to corporate interests, they design our system to benefit them, the few, at the expense of everyone else, as this op-ed points out (and you claim to agree with.) Corporations don’t care about nationalism, patriotism, the environment, the state of the economy, or the state of the American worker, only insomuch as how it benefits their profits. And if their unregulated profit seeking causes an economic collapse, they’re focus will be on their personal wealth and getting the government to subsidize their wealth until they can get back to bringing it in on their own again. We saw that happen in 2008. When you run an economic system like that it can only last so long before it leads us to a depression. I believe we can do better. And we have.

Posted by flashrooster | Report as abusive

@flashrooster,

Is that you? Some of this latest post is actually logical and coherent. Separating the wheat from the chaff:

“Any economic system needs structure.” I agree completely.

“Capitalism is either structured by government or by corporate executives. Government doesn’t always make the right decisions, but at least we have some flexibility and control with government (or we did before our government was bought out by corporate interests).” Nope. Substitute the word “commerce” for “Capitalism” and all of a sudden the dark warning clouds of sinister inference become white as the driven snow.

I completely agree that the American financial system has been hijacked by banksters, but that is shared incompetency and corruption that has NO link to the success or failure of capitalism as our “engine of prosperity”. Yes, there are “crooks” in “commerce” that are corrupt and pollute everything that touch.

Whose responsibility are THEY to identify and prosecute? Ta daa…the GOVERNMENT, which daily sets new standards for rigidity, stupidity and blindness whose combined effect is the status quo with no one accountable to anyone.!

“When we leave the rule making for our economy up to corporate interests, they design our system to benefit them, the few, at the expense of everyone else, as this op-ed points out (and you claim to agree with.)” Oh, bull puckey. You desperately seek to blame your personal, financial, and professional shortcomings on others;; a tactic as transparent as it is ridiculous.

There is no meaningful difference between whether a business is structured as a corporation, a sole proprietorship, a partnership, or limited partnership; so quit beating the “corporate interests” drum. It’s BUSINESS INTERESTS!

Yes, BUSINESS engages lobbyists and forms special interest groups to sway public opinion. So what? That’s not illegal, it’s “freedom of speech”. Sole proprietorships, partnerships, and limited partnerships voice their interests through their owners, so I see no problem with corporations being deemed “people” for the purpose of voicing identical interests.

Yes, businesses have a considerable financial advantage over you and me. We, too, have “advocacy organizations” we can support or, if we choose, we an start our own “special interest group” here in America.

“Corporations don’t care about nationalism, patriotism, the environment, the state of the economy, or the state of the American worker, only insomuch as how it benefits their profits.” I certainly agree they should be prohibited from exporting sensitive technology to the highest bidder, but yes, they primarily care about the sustainability of their profits.

When there is no profit, time to cash out. IT’S THEIR CASH, or would you nationalize it? Please explain to one and all SINCE WHEN has it been the responsibility of business to “take care of” the “American worker”? I have founded, run and sold a going business. I did that to advance MY interests, NOT those of “society”.

I paid the “going rate” for the help I needed. Those that could not or would not pull their own weight (generate more income than they cost me, including overhead) did not last long. Had a union ever showed up, I would have shut the business down before submitting to such interference. A pox on them all.

“And if their unregulated profit seeking causes an economic collapse, they’re focus will be on their personal wealth and getting the government to subsidize their wealth until they can get back to bringing it in on their own again. We saw that happen in 2008. When you run an economic system like that it can only last so long before it leads us to a depression.” That’s a real jumble of disconnected thought. Try again. And it’s “their” focus.

Yes, America has good times and bad; but in our bad tines the average American is so much better off than those elsewhere in the world economy it isn’t even funny. In America the POOR drive! Get real!

Posted by OneOfTheSheep | Report as abusive

Skills that make a good in finance is selling. Finance has the cash flow to pay the top sales persons. The analysts are cover and tools for the sales force. The game is selling questionable securities to the gullible, as either sure things or a very good bet with loads of research behind it.

The big boys cannot get in and out of positions fast without changing the market but they can have the best sales people an PR people sell what they want dump or get people to sell what they want to buy.

Posted by Samrch | Report as abusive

There is a fundamental divide between loaning for profit and good monetary policy. Good monetary policy the test books say is making more loans in a recession and less in inflation. The profit motive says make lots of loans in good times (when the borrowers and collateral look good and money is cheap) and sell them. Then make no loans in a recession when (when few borrowers look good and people do not want to borrow if they have and money is scarce).

Fro good economic policy to exist the government has to have a monopoly on lending.

Posted by Samrch | Report as abusive

Thank-you Mr. Hadas. Wonderful piece, and sadly I believe it will take another, worse financial crisis before we ever witness any real reform. That begs the question, had the Fed allowed the big banks to actually fail in 2008, would we be in a better place for the long term?

That is hard to know or visualize, but I thank-you for this excellent article.

Posted by Betowess | Report as abusive

OneOfTheSheep: My post is expressing the same positions I’ve been expressing here on Reuters for a long time now. Nothing new. Your problem is that instead of reading what someone actually posts, you incorrectly paraphrase them, presenting what they say in extreme indefensible ways and then you attack your own misquotes. In effect, you build your own strawman and then tear him down. I fail to grasp the rationale behind doing that. It’s your prerogative if you want to do that; just don’t attribute it to me. In other words, don’t build your strawman and call it flashrooster.

For example, take your assumption that I’m opposed to capitalism or that I would “wipe out capitalism.” You’ve made that claim many times, but you always fail to back it up with anything I’ve posted. How does anything I’ve posted portray me as being anti-capitalist? How would anything I’ve posted wipe out capitalism?

You even go so far as attributing quotes to me that I never expressed:

Please explain to one and all SINCE WHEN has it been the responsibility of business to “take care of” the “American worker”?

This is a prime example. I never said that it’s the responsibility of business to take care of the American worker. So why did you make such a statement and attribute it to me?

My original post is about how corporations are abusing their power and undermining our democracy so that the people are no longer being represented. Read the opening paragraph to my first post. I think it’s pretty clear. There’s nothing in there attacking capitalism or saying corporations have an obligation to take care of their workers.

I’m happy to have discussions with you, but as I’ve asked you before, if you’re going to comment on what I post, please read it carefully and don’t reinterpret my positions. If you want to comment on something I’ve posted, use what I actually write and try not to twist it into something it’s not, please.

Posted by flashrooster | Report as abusive

@Samrch,

“Fro good economic policy to exist the government has to have a monopoly on lending.” Why do you suggest this?

It would seem that one or more of those “indicators” we taxpayers fun would allow empirical (unbiased) distinction between recessionary periods and inflationary periods. The government would not need a monopoly to establish procedures whereby it can step forward and loan directly when banks “set the bar” too high and loans necessary for “good monetary policy” are not being made in sufficient amount(s).

It has been quite apparent that banks are quite willing to accept “stimulus funds” and the sit on them. Time to cut out the “middle man” when they don’t uphold their obligations.

Posted by OneOfTheSheep | Report as abusive

@flashrooster,

Your “original post” states: “…this is the modern day equivalent of what drove our nation’s founders to revolt. They resented the fact that they were being taxed without having any representation, and frankly in many ways they had more economic freedoms than we now have.” This is typical of your usual fragmented horse pucky.

Mr. Hadas addresses the transgressions of the “financial aristocracy”. YOU purport to respond by creating your own off-topic “straw men” of “taxation without representation” and “economic freedoms”. You then instantly switch your venom towards “…”economic centers of power…control…healthcare, food, fuel, wages, clean water, and government…[and the manipulation of]…the system to maximize…profits”, much as a blind man swinging at a piñata. You hijack legitimate topic(s).

OK, let’s humor you and look at some simple facts. In America we don’t have a “single payer” socialized health care system. What we have is a “payment for services rendered” model increasingly unsustainable for myrid reasons, not the least is too many people “receiving” that do not pay.

I agree it’s wasteful and inadequate in many ways. But only a fool rips an existing “system” out by the roots without having a proven alternate ready to take it’s place. I’m speaking of people, bricks and mortar…not fanciful ideas.

One “way forward” might be to abolish Medicaid and Medicare to establish a program to function for all as Medicare presently functions for the disabled and retired, negotiating drug purchases from competing manufacturers as does the VA. A LOT of money would be saved by eliminating the need for medical insurance and all the buildings and people necessary to administrate same.

This would NOT work if necessary implementation and administration were turned over to union bureaucrats. I’d like to see Walmart design and implement such a system under contract to our government. Those people daily demonstrate current ability to minimize expenses, deliver satisfactory service and products, and still make a good PROFIT! Win-win.

Farmers grow food to make a PROFIT! People pick it to earn WAGES or it rots in the fields. Trucks transport it at a profit (or it rots where it is) Grocery stores buy that food to sell it at a PROFIT, after expenses like butchers to cut meat! Oil companies drill for oil and refine it into various products, including fuel, for PROFIT! Trucks transport it at a profit. Gas stations sell it, for PROFIT. In short, the “carrot” in our society that keeps everything going is PROFIT. Get used to it!

Wages have historically been determined by supply and demand in America, unions excepted. When there is an excess of people chasing fewer jobs, wages go down. Still, we see many idiots advocating AMNESTY for 12-20 MILLION illegal alien invaders that will depress the American labor market for decades…go figger.

America’s public water systems are “clean” and will remain so even considering our need for petroleum, energy and refined by-products and associated drilling, acid and fracking shale oil recovery and the Keystone pipe line. Amazingly, this is an area in which YOU don’t trust our government.

Government is terrible at making a profit, or even delivering fair measure of service for actual cost. It has been said that if it were put in charge of the Sahara there would soon be a shortage of sand.

Our government HAS been taken over by unions whose “interests” are absolutely contrary to those of the average non-union taxpayer. This needlessly raises the cost of necessary infrastructure and it’s proper maintenance. Certain rules and regulations advocated by special interest lobbyists are also contrary to the best interests of the average non-union taxpayer. But specific remedy is needed, not mere undirected anger.

Taking your collective rants over time and following your frequently unrelated generalizations would turn the American economy on it’s head in a manner our presently functional capitalism/socialism could not survive. If you can’t see that, it is because you don’t want to. Here’s a specific from above. You said: “This is a prime example. I never said that it’s the responsibility of business to take care of the American worker. So why did you make such a statement and attribute it to me?”

Do you even read what you write? What you actually said was: “Corporations don’t care about nationalism, patriotism, the environment, the state of the economy, or the state of the American worker…”.

I just substitute the word “business” for your incorrect use of the word “corporations”. American businesses follow the existing laws in effect as to “…nationalism, patriotism, [and] the environment…”. No more, no less. They have NO say OR responsibility for “…the state of the economy, or the state of the American worker…”. Get used to it!

Posted by OneOfTheSheep | Report as abusive

Definitely OneOfTheSheep: I’m sure anyone interested enough to read my posts can do so just fine on their own without your middleman, psycho babble, reinterpretations of their content. You just don’t make a lot of sense. You’re the only one who consistently seems to have a lot of trouble understanding what I write. That says more about you than it does me.

One thing I will say about your take on things that I find troublesome is that you seem to believe that nothing can be improved upon, that things are the way they are and those of us who believe that we can do better should just “get used to it.” I should point out that if people like myself were to listen to people like you, the world would never progress, and we might still be a territory of the British Empire. Fortunately, most people ignore people like you.

Posted by flashrooster | Report as abusive

@flashrooster,

Definitely a strutting bird, somewhat singed on the outside. A cartoon of reality.

As usual, you can’t abide having to defend your thought process (or lack thereof), and so you ignore my specifics to spout more meaningless generalizations. NO ONE, obviously including you, “understands” what you write. The “stream of consciousness” thoughts you throw against every wall in the vain hope something will stick are too consistently illogical and incoherent to be cohesive.

Actually, I DO believe things can be improved, but my way is to prune and work the plant…not rip up the garden and poison the soil. I want a harvest. You just want destruction.

Most people of your mind set seem quite happy in Europe (as it slowly and steadily sinks economically into financial obscurity. Feel free to relocate!

Posted by OneOfTheSheep | Report as abusive

Products? No, these are services. They make nothing tangible or useful to others.

Posted by borisjimbo | Report as abusive

OneOfTheSheep: “…you ignore my specifics to spout more meaningless generalizations…Actually, I DO believe things can be improved, but my way is to prune and work the plant……not rip up the garden and poison the soil. I want a harvest. You just want destruction.”

LOL…right, your specifics and my generalizations. You don’t seem to think about what you’re writing sometimes.

“NO ONE, obviously including you, “understands” what you write.”

Hmmm…how would you know this? How many people have you asked? I understand what I write perfectly. As usual, you base you claims on your own unsubstantiated opinion. You always do that, which is why you feel the need to accuse me of the very things that I point out in your posts. The difference is, I back up my claims. You don’t. You usually rely on strawman arguments.

Consider your criticism that I fall back on generalizations and you’re specific. Then you write: “my way is to prune and work the plant…” What are you trying to say? That’s so general it’s meaningless.

You praise Mr. Hadas’s op-ed. His main thesis is about how we’ve evolved sociologically in such a way where we tend to accept the privileged status that the titans of the finance industry have bestowed upon themselves, like it’s just the way it is, which is the kind of thinking you’re always displaying. (That’s just the way it is, “get used to it!”) Read his last 2 paragraphs. You’ve criticized me for making similar comments (though admittedly not nearly as eloquently.) Hadas writes, “Politicians, who have even more grounds for discontent – the majority of voters who borrow and suffer in the financiers’ credit-intensive economy – pay them court.” This is a topic dear to my heart that comes up all the time in my comments, comments you’ve criticized. The wealthy, obviously including the financiers that Mr. Hadas is writing about, use their wealth to get the politicians they want in office and the legislation they want passed. Oftentimes lobbyists literally write the bills for our legislators, saving our legislators the time and trouble. This is a problem, but whenever I bring it up you attack me for it. But always in gross generalities and with insulting language. Me thinks you’re more interested in insulting me then you are in discussing the issues.

Posted by flashrooster | Report as abusive

@flashrooster,

“As usual, you base you claims on your own unsubstantiated opinion. You always do that, which is why you feel the need to accuse me of the very things that I point out in your posts. The difference is, I back up my claims. You don’t. You usually rely on strawman arguments.” You wish.

“Consider your criticism that I fall back on generalizations and you’re specific. Then you write: “my way is to prune and work the plant…” What are you trying to say? That’s so general it’s meaningless.”

OK, for YOU I’ll explain further. I see capitalism as the primary engine of progress the world over since American independence.

The Industrial Revolution is properly credited with incredible improvement in the standard of living of western societies. In the period following WW II, however, governments in Europe have increasingly embraced socialism while America has remained much more capitalistic.

Accordingly Europe is comprised primarily of renters whose net worth is a small fraction of that of the average American. Our capitalistic systems of incentives and rewards has produces a society so affluent that our “poor” own and drive their own cars.

Capitalism is a system already the world’s unquestioned best in terms of actually delivering the highest standard of living the world has ever seen for many, many people. Abuses such as Mr. Hayas’ “aristocrats of finance” suggest that the harness our government has placed on capitalism is perhaps too loose, and needs to be tightened up here and there to accomplish a more equitable result.

Perhaps an entirely new harness would be better, but the time and expense of achieving the necessary consensus between those who make such decisions makes it much more logical to try a nip here and a tuck there to achieve worthwhile change quicker. That’s why it is frequently the wiser course to tweak and adjust something already good so it becomes better than starting from “scratch”.

To get this thought across I used a metaphor…”to prune and work the plant……not rip up the garden and poison the soil.”

I find much of what Mr. Hadas writes to be accurate and unbiased. When HE says “Still, a revolution may come, even if the disempowered 99 percent don’t rebel”, the preceding and succeeding context make the comment spot-on appropriate.

The “revolution” he speaks of is an awakening followed by meaningful legal actions to rectify fundamentally unconscionable current practice, and he is NOT expecting “the disempowered 99 percent” to rebel. I’ll admit to absolutely loathing that totally inaccurate idea from OWS of a 1%-99% split in economic interests in the general population, even when Hadas uses the term, but it has become so common as to be trite in such use.

But there are different “trigger words” that “set off” most of us. When I hear you or others suggesting imminent revolution in America because of current economic conditions, I know what you have in mind is a “real revolution” with swords and torches.

Such comments make me think of all the people “out there” living their lives, buying houses and cars, etc. They aren’t sharpening swords and knives on weekends…they’re at the mall! And so what my eyes see and my brain accepts are completely incompatible with “imminent revolution” in America. And so I express my doubt that such is credible.

But your very persistence argues that you believe what you say and so I read what you write most carefully (sometimes several times). I even begin to suspect that what you believe just spills out horribly wrong through your keyboard.

There are those with whom I utterly disagree that manage to present cogent, credible arguments…and in such case I always offer to “agree to disagree”. Maybe someday we’ll get there.

Posted by OneOfTheSheep | Report as abusive

OneOfTheSheep: Your idea of being specific is to replace one metaphor with another. One metaphor: “but my way is to prune and work the plant…” with another:

“Perhaps an entirely new harness would be better…try a nip here and a tuck there to achieve worthwhile change quicker. That’s why it is frequently the wiser course to tweak and adjust something already good so it becomes better than starting from “scratch”.”

And a mixed metaphor at that, from a harness to a face lift to tweaking and adjusting. The only thing new that you added was that you’re talking about our economy, and that was already a given. That’s what this entire discussion is about. I know you’ll insult me for pointing this out, but that doesn’t count as “further” explanation. It’s not considered being specific.

I’ll repeat, once again, what I’ve stated over and over again. I believe capitalism is the best economic system we’ve, so far, seen put into practice. Where I think you and I disagree is how capitalism should be structured. I base my position on the belief that any economic system is only as good as the percentage of the population it benefits. Correct me if I’m wrong, but my impression is that you believe in laissez-faire capitalism and that a person should be free to use their wealth in any way that might aid them in increasing that wealth, even if it’s to the detriment of “the greater good” or the bulk of our nation’s population. That would include being able to bribe government officials to pass legislation conducive to expediting the growth of one’s personal wealth. An example of this would be the blocking of a bill requiring universal background checks for gun sales (something supported by a wide majority of the population) or passing a law that forbids Medicare administrators from negotiating with pharmaceutical companies for lower drug costs. These are two examples of where corporate lobbying was able to trump the greater good (as agreed upon by majority opinion) in favor of industry profits (which amounts to increasing the wealth of a few.) That’s being specific.

You state, “Accordingly Europe is comprised primarily of renters whose net worth is a small fraction of that of the average American. Our capitalistic systems of incentives and rewards has produces a society so affluent that our “poor” own and drive their own cars.”

This is the kind of statement you should feel compelled to back up with evidence. I contend that you’ve given way to a false impression. It’s simply not true. In fact, there are 16 other developed countries with populations with median incomes greater than what we have here in the US. This is particularly disturbing since the US DOES have so much abundance. And most of these are European countries: http://www.washingtonpost.com/blogs/ezra -klein/files/2012/07/medianwealth.jpg

Furthermore, these countries offer access to free or affordable healthcare which we do not. You take out what Americans are paying for healthcare and we drop much further down the list, because healthcare is very expensive in the US. It even forces millions of Americans into bankruptcy.

Let me be clear. I don’t want violent revolution. Definitely not. In fact, the less traumatic the “revolution” the better. However, that’s predicated on what is necessary for the change we need to make the US a better place to live for all of its citizens. I’m afraid the power elite will resist change with all of their considerable resources. This takes us to Edward Hadas’s op-ed and the sociological thinking that’s become part of our culture. We too easily accept the dictates of the rich and powerful. I’m saying it’s time to let them know we no longer accept a system where they reap all the benefits while an increasing majority is left with the crumbs. I’m saying we can do better, but for change, real change, to happen, we have to apply pressure.

You state, “The “revolution” he [Hadas] speaks of is an awakening followed by meaningful legal actions to rectify fundamentally unconscionable current practice, and he is NOT expecting “the disempowered 99 percent” to rebel.” Mr. Hadas would have to speak for himself on that, but I don’t think he’s limiting his use of the term revolution to “an awakening” and “legal actions”. What legal actions are going to produce real change when the people we’re trying to force to change are the ones writing the laws?

Posted by flashrooster | Report as abusive

@flashrooster,

“OneOfTheSheep: Your idea of being specific is to replace one metaphor with another…The only thing new that you added was that you’re talking about our economy, and that was already a given. That’s what this entire discussion is about.” Well, since there is now at least the illusion we’re “on the same page”

“Where I think you and I disagree is how capitalism should be structured.” Could be.

“I base my position on the belief that any economic system is only as good as the percentage of the population it benefits.” Fine, so long as we do not go down the road of comparing aspirational and unproven nonsense to a real and functioning system. Stick to “Apples and Apples” comparisons.

“Correct me if I’m wrong, but my impression is that you believe in laissez-faire capitalism and that a person should be free to use their wealth in any way that might aid them in increasing that wealth, even if it’s to the detriment of “the greater good” or the bulk of our nation’s population.”

What either of us “believe” does not matter. The only meaningful constraint on a person’s freedom to “use wealth” in America is the rules, regulations and laws that are in place and enforced by our society society. The “morality” of religion when proponents go to the buffet and pick and choose what they like is an illusion.

Let’s look away from “the wealthy” for a moment and look at the average American citizen like me who makes a conscious personal decision to buy most of my food, clothing and fuel from Walmart. Why? Because their prices allow me to “live as well” for less.

Walmart management DOES take returns, do exchanges and issue refunds in a manner MUCH more consistent with “customer service” than smaller or competing operations. They DO “go the extra mile” to satisfy customers even though it can take persistence to find a knowledgeable clerk to mix paint, etc. I like and appreciate that.

I do take extra effort to go to Trader Joe’s now and then because they offer proprietary gourmet items that no one else has, again at a good price with exemplary service. They offer “Fair Trade” coffee, etc., but not exclusively; leaving that “consumer choice” to their consumers. I don’t buy coffee to improve life in South America, I buy the coffee that tastes best (which I sometimes blend).

“That would include being able to bribe government officials to pass legislation conducive to expediting the growth of one’s personal wealth.” There are places on the globe that bribes are still necessary if business is to be done there. When in Rome, you do as the Romans do. You and I can’t change that.

To slip cash to a food inspector to “look the other way” and pass unsafe food on to unsuspecting Americans who pay that inspector’s salary should result in jail time. Existing laws, etc. need better enforcement.

To “contribute” generously to a politician expecting similar “favors” is, unfortunately, very common in our society. I would like to see the practice of lobbying made illegal. Presently it is not, so I support changing associated rules, regulations and law.

It is my personal opinion that any politician, including the President, who sells influence rightfully belonging to “we, the people” should be stripped of office. They deserve jail time identical to those who seek to corrupt others in such manner.

“An example of this would be the blocking of a bill requiring universal background checks for gun sales (something supported by a wide majority of the population)…”. The casting of a vote or advocating either “side” of a debate is not and never will be a crime. People have (and are entitled to) differing opinions.

On this subject, I must see how proposed rules, regulations and/or law would impose more effective constraint on the actions of criminals or sociopaths before giving them my support. Current “political correctness” or emotional response to tragedies that make instant world-wide news every day should not be considerations.

“…of or passing a law that forbids Medicare administrators from negotiating with pharmaceutical companies for lower drug costs. These are two examples of where corporate lobbying was able to trump the greater good (as agreed upon by majority opinion) in favor of industry profits (which amounts to increasing the wealth of a few.) That’s being specific.” And in this case, I’m with you 100%; without qualification.

“In fact, there are 16 other developed countries with populations with median incomes greater than what we have here in the US.” Income is a snapshot in time than can change with two words: “You’re fired”. Net worth is a much more substantial indication of one’s economic stability and achievement over time. You changed the subject.

“…healthcare is very expensive in the US. It even forces millions of Americans into bankruptcy.” Agreed. I have told you: “One “way forward” might be to abolish Medicaid and Medicare to establish a program to function for all as Medicare presently functions for the disabled and retired, negotiating drug purchases from competing manufacturers as does the VA. A LOT of money would be saved by eliminating the need for medical insurance and all the buildings and people necessary to administrate same.

This would NOT work if necessary implementation and administration were turned over to union bureaucrats. I’d like to see Walmart design and implement such a system under contract to our government. Those people daily demonstrate current ability to minimize expenses, deliver satisfactory service and products, and still make a good PROFIT! Win-win.”

You say: “I don’t want violent revolution. Definitely not. In fact, the less traumatic the “revolution” the better.” OK, I’m with you to here.

“However, that’s predicated on what is necessary for the change we need to make the US a better place to live for all of its citizens.” That’s utopia! An illusion! The American “standard of living” has jumped incredibly since WW II due to circumstances that were unique and will not repeat. To expect our “standard of living” to continue to improve may be unreasonable. I don’t know, and neither do you.

“I’m afraid the power elite will resist change with all of their considerable resources.” Always have, always will.

“I’m saying it’s time to let them know we no longer accept a system where they reap all the benefits while an increasing majority is left with the crumbs.” Too general. You’re blindly swinging at that piñata again!

“I’m saying we can do better, but for change, real change, to happen, we have to apply pressure.” I agree; but the “pressure” you and I wield is more like that of a masseur and less like that of of the ocean deeps. It is incumbent on us to prioritize and focus our individual battles rather than just “rage at the machine”.

“What legal actions are going to produce real change when the people we’re trying to force to change are the ones writing the laws?” And the ones interpreting them, our judicial system, has made themselves utterly unaccountable to ANYONE! Nobody promised easy. We do what we can.

Posted by OneOfTheSheep | Report as abusive

ever the prophetic pedagogue, mr hadas. ever the surrogate sophist.

Posted by NewsAddict | Report as abusive