Suppose that all of the money invested in S&P companies’ stock was in funds that charged a 1% management fee each year (this isn’t quite true but 1% is a pretty standard management fee). Now, suppose that the average price-to-earnings ratio at an S&P company was 20:1 (it’s usually slightly lower, but 20:1 is a pretty good approximation). Then for every dollar that an S&P company makes, some financial management fund gets 20 cents. That is, suppose that the total value of S&P companies was 10 trillion dollars. Then there would be about 500 billion in profit and 100 billion in management fees.
Under this model, which isn’t entirely inaccurate, financial services companies take a 20% cut of just about every dollar made in the United States. That can’t be true, can it?
In fact, the truth is worse in some ways. If you don’t believe me check out this Atlantic article by Simon Johnson. JMM provides charts and conveniently summarizes:
The number that jumps out at me is that at that peak point upwards of half the profits in the entire US economy was in the financial sector. And it’s been near or above a third for most of the last decade. Quite apart from the public policy implications, but rather in the realm of political economy, these graphs provide a revealing look at what the 2005 push to privatize Social Security was all about and what the implications of its success could have been.
The distribution of capital obviously plays a critical role in our economic system. But how on earth can it be so critical that financial firms are making half the profits, given that their primary role is to facilitate profit-making and wealth-creation in other sectors of the economy?
I’m not a hang ’em high anti-bank type at all. But the extent to which the financial sector has quite literally stolen from the rest of the economy is hard to overstate. To hear them complain now about “moochers and looters” is rich indeed.
Nick
You pinko Marxist commie redistributionist.
That’s basically where you’re headed with this sort of perspective–that society can be structured optimally, and that optimization probably means that the bulk of the population has the great bulk of the resources.
Giving a few people most of the money means that consumption is directed towards high end consumer goods, the production of which doesn’t provide for a stable, thriving manufacturing base. (Building a few dozen big yachts doesn’t employ as many as a million Fords).
Demmed librul. Probably voted for that negro too.
Emma Anne
I suspect that this sort of thing goes mostly unnoticed when everyone’s investments are doing well, but gets much more scrutiny when we are in a long term slump. It is a bit puzzling that the financial folks seem so clueless about how their world is changing. You would think they would be the first to take notice.
DougJ
Yes, that’s one of the big points made in this article. I should have excerpted it more. It’s very good.
Bruce Baugh
It seems like a lot of this spirals down and lands on the way we tax capital gains. I remember the big hullaballoo about this when Reagan was president, and thinking at the time, "But if it’s income, just treat it like income. If you give it special treatment, people into gaming the system will game the hell out of it." Looks like they did. It’s weird to realize that, basically, the most extreme left-wing ranters have been most right about the last 30 years – the entire lifetime and then some of some of my WoW guildmates, people who are now adults. It really has been hallucinations and con games.
cyntax
Check out the website he and a couple others run [baselinescenario.com]; I was messing around on it yesterday and it’s very comprehensive, has a whole section devoted to getting novices up to speed.
I feel like I have at least a rudimentary grasp of the problem, but they have a nicely structured site with all sorts of links, good summaries, it’s a serious resource, and worth anyone’s time no matter how much you feel like you know about the subject.
Janet Strange
Back in the mid-90’s, I finally got a job that offered retirement benefits. I had to choose between a defined benefit (pays a set amount each month after retirement based on salary and years of employment) and a defined contribution (pay in a set amount each month to a mutual fund while working and then live on whatever is there after retirement).
I chose the defined benefit plan and here’s why: I’m a Baby Boomer. Everyone my age that I knew was putting as much money as they could into equities (basically, stocks and bonds, usually in "safe" mutual funds), either because it was the only retirement plan they had (e.g. 401k’s, etc.) or because they wanted to hedge against the devastating effects of inflation on savings. We’d seen what happened to our grandparents’ "safe" investments in CD’s and such during the inflation of the 70’s when we were young, and were trying to guard against the same thing happening to us. "Buy and hold!" we were told. Only the stock market will grow your savings enough to protect you against inflation!
The stock market, was booming at the time. There was the dot.com bubble of course, but I wondered, how much of this is due to this big population bulge – Boomers – getting serious about retirement and putting a lot of money into equities, all at about the same time?
And what happens when we stop buying stocks and bonds because we’ve retired and are no longer working? And after that, when we actually have to start selling them to cover medical expenses, nursing homes, etc as we age? Won’t the stock market then go down, eroding the value of our investments, just when we need them most?
When the whole Social Security privatization thing came up, I thought, ahhh, I’m not the only one who’s seeing this problem. Moving the retirement money of the generation behind us – not just the egregious 401k’s, but their Social Security, too – is how they plan to keep the bubble going.
(BTW, Boomers are often accused of "not saving for their retirement." But buying equities, I’ve heard, is not considered "saving." I’m not sure what is – CD’s? Treasuries and savings bonds? Bank accounts? Like I said, this kind of saving didn’t work out too well for those who retired in the 70’s. What were we supposed to do, if not buy mutual funds instead of CD’s, which, at the time, looked like a bad idea. I actually wrote Jane Bryant Quinn to ask her about this – how is it that we are chastised for not saving when everyone I know is investing as much as they can afford? She actually replied to my email, much to my surprise, to say that investing is not counted as saving and that actually, Boomers are putting aside more money for their retirement if you do count the equities than previous generations had.)
This is probably a TL;DR type comment – sorry. I just turned 60 and its a subject I’ve thought a lot about, obviously.
Davis X. Machina
That would be "The Financial Services Industry Guaranteed Full Employment and Perpetual Profitability Act of 2005".
That’s not what they called it, but that’s what it was. They needed that captive revenue stream, withheld from all those paychecks, with the IRS doing their back-office work for them, just to pay forwards the game they were already running,
passerby
I was reading about the protests in London and someone had a sign which read "Down with Capitalism". I had to stop and think whether or not I agreed with that. I want this corrupt system to go down.
But it occurs to me that some of the capitalistic elements, for instance the concept of the "free market" is a term that has been hi-jacked to mean something other than its original intent.
Didn’t it use to apply to freedom to compete? If you build a better widget for a lower price the market could drive my widget company out of business. Free Competition (no government subsidies or mandates).
But I think they’ve bastardized the term "free market" to mean that they are free to use our money in the name of making a profit for themselves.
Especially now where they take taxpayer dollars and turn around and loan it back to the taxpayer at interest (???! it’s perverse). The banks hold the consumers and businesses in financial bondage. Is that capitalism? because I’m definitely against that.
Dennis-SGMM
It might just be that when you give up on making things to sell for a profit (So that we can all have groovy high-tech jobs!) whatever’s left becomes the big profit center.
A Mom Anon
So,the economy is mostly based on made up shit that sucked the actual real shit into the hands of Wall Street and investment banks?
Why can’t we take some of that bailout money and start building and making our own stuff again? This is what I’m having trouble understanding. It seems to me that one big problem is that we’ve outsourced everything from food to building materials to clothing outside our country. There was a time where it wasn’t hard to find "Made in the USA"on product labels. Now you have to search and search to find it.
Why can’t we do away with all the hocus pocus stuff and base our economy on tangible things? It seems like that would clear away a huge amount of the opportunity for fraud and theft.
passerby
@cyntax:
Thanks for the recommendation. Also the Rolling Stone article by Matt Taibbi was brilliant.
gizmo
Didn’t somebody warn us two thousand years ago about the money changers in the temple?
enrico
I’ve got a couple of items stamped "Made in the USA." I’m planning to put them on Ebay in the "collectibles" category.
El Cid
It’s an even harder question to address if you’re going to ask exactly what the U.S. economy was going to do other than financial tricks.
We’re coming off of 30-odd years of arguments to the effect that all of the things which used to grow the economy, provide jobs, etc., are all useless.
We don’t need to make things, right? We don’t need these blue collar manufacturing jobs, right?
Why, we’ll just send all those boring, low cost manufacturing tasks offshore where they can be done more cheaply and more ‘efficiently’. And those displaced workers here in the U.S. are just somehow going to go get some training. Or maybe launch small businesses which, well, do something or other. NAFTA! MFN! WTO! MAI (well, not that one).
We were going to make money in the New Economy! Tech stuff! Well, at least for a while until the currently 3rd world areas catch up with us — they can do that, you know.
Okay, well, we’ll make make money via, um, financial innovation!
So my first question to myself was, given the past few decades’ worth of U.S. economic policies (industrial, trade, training, legal, regulatory), if you don’t like the great percentage of profit going into the financial industry (in my view from made-up investments), okay, I can agree — but where else were the profits going to come from?
Even today few really want to take on the question. We play around the edges with green industries domestically based, but overall, we still tend to wave our hands and mention something about a better social safety net and better training or education for something or other.
What are we really going to base our economy on which isn’t gambling and financial fictions and idiotic fantasies of perfect trade efficiencies?
demkat620
@Davis X. Machina: Yup, that was the whole scam. Thank god the Dems had the sense to say no to that one.
Karmakin
I’m very cynical on the whole mess because frankly, I can’t get a straight answer.
20:1? Frankly, I did a bit of research on top stocks, I do so every time this kind of thing comes up. I can’t find too much at 20:1. The only things I can find that meet or beat that are…..
Financial stocks.
With most actual primary investments, the actual return is closer to 40 or even 50 to 1 as far as I can tell. I’m talking actual investor payments btw. Profits may be at a 20:1 level, but a lot of those profits go into the bank.
Which is main reason why IMO what you write doesn’t make sense. It’s not so much that the financial sector is taking a huge chunk of business profits, it’s that the financial sector is taking a huge chunk of savings. Which is why Obama is working so hard to try and protect that sector. That’s the head that they have the gun to.
Mind you, quite frankly that head is attached to a quickly dying body anyway. But nobody wants to talk about that. That there’s no way that the economy could ever pay out all those retirement investments, especially for the boomer generation.
That’s the long con. Consumer retirement investments have been paying for capital gains for the upper classes. Full stop.
Dennis-SGMM
@Davis X. Machina:
Another piece of Social Security privatization was that it assured that the gov would bail them out – no matter what. No one could have anticipated that the gov would bail them out – no matter what – anyway.
Leelee for Obama
That was such a crappy idea, even the Republican body politic stood up and said no f-ing way! I can still remember how stunned Santorum was after a Town Hall at home. Popcorn worthy moment, that.
I have been asking for years what the hell our economy was based on since we don’t make jack____ here anymore. How many service workers (I’m usually a Server and Bartender) and Nurses and CNAs and mechanics can we possibly need twenty or thirty years out? We need to produce Green energy, all the by-products of that industry, and competitive cars, and stem-cell therapies and stuff that people want to buy. Selling snake oil financial products will not, I predict, be much of a career trajectory any longer.
Comrade Darkness
@gizmo, he’d be labeled a pinko commie too, you betcha. All that "take care of the poor" crap.
Bruce Baugh
Right on, El Cid. Efficiency as they’ve been defining it is simply not a viable goal. And pursued as they have, it’s become pretty much sociopathic.
J Bean
I’ve always been responsible, saved my money, payed my bills, maxed out my 401K. If I’d known those idjits were using my money to buy themselves gold plated wastebaskets, I would have just spent it myself on something fun.
Dennis-SGMM
@El Cid:
The tinfoil hat wearing conspiracy theorist in me wonders if we weren’t encouraged to abandon making things because large scale thing-making requires that you pay at least a part of the profits to large numbers of people whereas finance allows you to pay almost all of the profits to a very small number of people.
Comrade Darkness
@Leelee for Obama, we actually make a lot of jack___ here. It just doesn’t involve the same costs that it used to. Automation and massive gains in productivity means that the cost difference between the raw materials and finished goods is too small to show up in the statistics the way it classically has. Our manufacturing output was higher in 2006 than it ever has been. It’s a myth that we don’t make stuff, we just don’t make stuff that requires roomsful of miserable laborers doing tasks that risk their health, and/or in industries where you can ship a high value good that doesn’t take up much space (like electronics).
Top manufacturing countries in the world This is a stupid myth and it should die.
Anoniminous
A company doing boring things like making stuff (goods and services) people actually use is lucky to net an 8% Return on Investment in a year.
Financial funny paper can net over 100% Return — yep, return the whole investment capital in one year — or even more.
Which gives the following dynamic:
Financial funny paper produces claims on economically productive activity.
As the Financial sector grows in terms of percentage of total economic activity necessarily the percentage of claims on productive economic activity grows. The Financial sector grows faster than productive economic activity according to:
(Financial Sector % growth) – (Productive Sector % growth)
leading to a Positive Feedback loop of more money flowing into the Financial Sector from, and relative to, the Productive Sector.
Leading to the increasing percentage share of the Financial Sector within the Gross National Product.
This is what Jerome a Paris has termed "The Anglo Disease" — from the oil based "Dutch Disease" of years back.
Starfish
Sometimes it is worse. Last year I invested in one of the Oppenheimer funds. I didn’t realize that there was a 5% up front fee so as soon as I invested I was down 5%. Overtime, it was up some, but then I was down about half the money that went in plus whatever annual fee they took.
Karmakin
@Leelee for Obama:
Read my previous post. I’m no fan of the neo-libs really.
However, that said I think this is a bit unfair. I think that a service job is actually just as valuable as a manufacturing job, and has just as much potential to sustain the economy. The main problem is that a service job makes less money than an old-fashioned manufacturing job. There is really no economic reason why this is the case, and is strictly a matter of cultural tradition and values. The promise of the neo-libs was going to be that the "new" jobs would be the wage equivalent of the old jobs, but those new jobs actually took the McDonald’s model of standardization and interoperability rather than the professional model of education and individuality, limiting wages.
Some people might ask, well…doesn’t a job that require an education or some sort of trade limit the pool for labor, increasing wages? That’s true, that does happen. However, in a lot of cases these jobs could very easily follow the McDonald’s model and not require education or a trade are even experience because the tasks are easily defined and trainable. They’re not, because again, of cultural tradition and values.
Rick Taylor
Paul Krugman’s latest column is along these lines. He’s finally beginning to talk about the bigger picture.
John Brown
The math in this article does not add up. Any investor can buy the S&P index and pay a .09% management fee or the Russell 1000 and pay .20% and these are just two of many options available to investors. You can also buy individual stocks for $7 to $50 commission and pay no management fees at all.
I agree that the financial sector has had disproportionate growth relative to other economic sectors followed closely by the medical and oil and gas industries. This is mostly due, in my opinion, to failed political leadership. We’ve known for 40 years, for example, that our reliance upon foreign oil caused a whole host of problems which have until recently been ignored.
American citizens pay twice as much per person for medical care compared to the average European and yet our quality of care is significantly worse. But instead of dealing directly with these problems our leadership chooses to focus upon failed programs like the War On Drugs or illegal immigration to stoke the emotions of the electorate.
Ultimately, it is our own ignorance which is responsible for this current economic panic. The belief that Wall Street can be relied upon to self-regulate or that reforming the medical industry threatens the highest quality of care in the world comes straight from industry propaganda. Without an educated population, propaganda will continue to be our primary source of information.
Brachiator
Wow! This guy worked at the IMF? It wasn’t until I was more than a third through the article that I guessed that it would be another whiney plea for nationalization. All the moaning about elites and oligarchy comes down to a misplaced belief that another elite (Congress) that has been bought out by elite Johnson hates (bankers) will magically work in the country’s best interest, and that this view is sanctioned by still another elite (the supposedly wise "old hands" at IMF).
And so, Johnson becomes another weak sister who is not interested in effective regulations for the financial markets, a reasonable goal, but tough enough given the lack of will of many in Congress. Instead, Johnson gets the willies because of the outrageous profits earned by the bankers.
It’s really not a zero sum game. It’s not as though it’s the profits earned by bankers that killed manufacturing or spurred outsourcing.
What the financial markets did with crap like derivatives, sub-prime loans, etc., was criminal and should be punished. Comedian Craig Ferguson imagines Obama slapping AIG executives in the face with a sockful of quarters, proclaiming "This is change you can believe in!"
But restricting the profits earned by bankers, no matter how evil you perceive them to be, is not the same thing as solving the liquidity problem.
Leelee for Obama
That’s an interesting chart, where does one find out what we’re manufacturing? I have to say that I haven’t seen much in any store that says "Made in USA". When I shop for fabric or a sewing machine or almost anything, it’s tough to find what I’m looking for made here. Not impossible, but difficult.
I am wondering what the average person is supposed to be doing that would support a family of 4 or 5? I certainly could not do it, and I’ve made some beaucoup bucks waiting tables and making drinks. In Florida, a CNA makes $14/hr. I couldn’t do it on that either, although that’s likely what I’ll do after my Mom-caring days end.
What is the answer to this situation?
bayville
@El Cid:
We can always build more gambling halls, off track betting parlors and add a couple of nationwide Pick-10 Lotteries to raise revenue.
That seems to be the solution to everything in today’s America.
Dustin
Well I am the hang ’em high type. We execute people for destroying a single life, yet we do nothing to financial tycoons who knowingly do the same to millions except ask them if they enjoy being a billionaire.
Whether it’s with a knife, a gun, or by destroying entire companies and communities through greed and lies, people have still died or had their lives destroyed as a result of these peoples actions. Life in prison would be just fine too, if you want to pretend it’s any better; either works.
SBW
Leelee,
The latest year in pdf form is 2005 — it shows how manufacturing is subdivided out for reporting.
Info:
http://www.census.gov/prod/2006pubs/am0531gs1.pdf
(Census web site)
http://www.census.gov/mcd/asm-as1.html
Like other metrics — unemployment comes to mind — I think it is important to look closely on what the government actually measures, not what the common public definition for the word would be.
When I personally think of manufacturing I think cars, airplanes, creation of machines of any type, computers, etc. I don’t think of Campbell’s soup or a Coke bottling plant — but both are in factories, and considered manufacturing by the government, albeit food as a total is about a ~1/10 the total share.
And if manufacturing output for the population as a whole — not just total dollars — is calculated, and compared other countries, industry in the United States has without a doubt been gutted over the last 40 years.
Brandon T.
This is not going to be a popular view, but I don’t see there as being something wrong with the free-trade programs in and of themselves. I think there need to be tighter labor protections to prevent a race-to-the-bottom type scenario, but I think they serve a very useful purpose.
The way I see it, in the presence of reasonable labor standards (no 18 hour workdays, semi-slavery, child-labor, etc) these programs put a check on out of control regional standards of living. There is an obvious urge in self-contained workforces toward sometimes unreasonable expectations of standards of living (just think about the materialistic binge over the last 20 years). Competition with other countries that aren’t locked into the same cultural mentality puts a "sanity check" on how much people ought to earn/expect to own. The only reason this didn’t work to outweigh the consumerist binge of the last 20 years or so is because of the obscene expansion of credit with lax lending standards in the US.
SBW
And government manufacturing data looks like it includes manufacturing related to the defense industry. So — if the United States poured as little money into defense as a Japan or Germany, our manufacturing situation would be in even more dire straits.
SBW
Brandon T,
I’m not sure it will be unpopular here, but it is to me because it sounds logical, i.e. is plausible in theory, and then totally fails when enacted.
This is similar to the blockquote you highlighted (to disagree with) — any US workers displaced by ‘free trade’ would just retrain and all would be well. Retraining and exciting new jobs sounded cute in the 1990s, and then never materialized. It’s my personal belief that if the housing bubble had never inflated, we would be having this conversation circa 2000 or 2001.
Free trade — yes, the United States could have completely free trade with say, the United Kingdom, or France, Germany, or Japan, in addition to Canada. That sounds good to me. I do have faith those countries have governments — and more importantly populations with the will to keep their governments in check — that will ensure there is no race to the bottom in worker conditions. On that we agree.
I do not see that in China. I do not see that in Mexico or Central America, or Brazil, or large sections of south Asia. And these are precisely the countries the erstwhile (and perhaps present) business leaders want free trade with. Hence, I take any palliatives about free trade with suspicion, because there is no guarantee that any worker protections will be enforced.
Martin
We were encouraged to abandon making things because when you factor in automation, we’re approaching a point that the number of people required to make everything we need is far less than the number of people we need to employ. We’re so focused on productivity in this country when in fact, we need to find a natural reduction to productivity while retaining earning levels.
Consider a hypothetical future scenario: robotics and AI combined with nanotech improve to such a degree that there is effectively no manufacturing labor needed to produce everything that we need as a society – just design and maintenance. That is to say, a household could get everything it needs from food to entertainment to clothing and furniture with no direct human labor involved. The cost of those items approaches zero and the jobs needed to create those items approaches zero. How do we keep people employed 40 hours a week? Or do we? Or do we simply expand our consumption to fill the vacuum so we all live in 20,000 square foot homes and abandon our kitchens in order to eat out every meal?
That’s really the problem we just starting to get into in a serious way – we’ve overproduced to a huge degree and people have decided (or been forced to) consume less, and the whole economic machine is basically turned off until a new balance appears. We’ve shifted from durable to consumable goods over the years, but that’s not sustainable and a lot of people are shifting back. Something very weird will emerge from this in the next decade or two.
Will
Part of the problem is that there is no one problem. A lot of problems in our society are slowly building on each other toward a systemic breakdown.
My mother was laid off thanks to her factory moving to Costa Rica. The federal government paid for her retraining in computers, but only at the community college level and did nothing to help place her in a new job. There was no aid or systematic approach to actually make sure that there were jobs for the "retrained" workers. It was done half-heartedly and on the cheap, so workers like my mom ended up getting service jobs that paid a fraction of their former positions, even after their retraining.
For free trade to work as the 90s proponents envisioned, there needed to be a huge amount of flexibility in the economy, especially in terms of the labor force. That never appeared, because that flexibility was impossible without a strong safety net and cheap or free retraining.
That means that a worker can lose their job, or several jobs in a row, due to the flexible economy and not have their health care, housing and pretty much everything else destroyed. Universities and other educational programs can’t have their costs increase exponentially at the same period that real income is falling. Government employment agencies have to actually be effective at finding people work and match the retrained with employers, up to and including assisting with relocation. If there is a substantial surplus of labor out there with no job to fill, the government has to support that surplus until it can find a way to keep them employed.
As none of this is or was politically possible in our country, free trade is a losing position.
Leelee for Obama
@SBW:
Thanks for the info. That reminds of Greg Mankiw saying that McDonald’s jobs counted as manufacturing because they "made" hamburgers!
The question is, "What the heck are Americans supposed to do to make a living?" I have no gripe with Fair Trade, it’s the best way to bring emerging countries into the modern economy. But, this free-booting, BS "Free Trade" is nothing more than Robber Barons in the 21st Century, and actually contributing less to the society they profess to want to preserve.
Wage-slavery sucks, no matter where the wage-slaves live.
Dennis-SGMM
@Will:
My hackles come up when I hear "re-training" posited as all-purpose solution for displaced workers. Re-training for what, exactly? It’s not as though there are hordes of employers with unfilled jobs that just need workers with the right training. The cycle of new industries with new opportunities replacing the old industries has pretty well ended for now.
Will
That was my point. If there is work, the retraining must be tailored to the work, not just as vague promises and two-years of community college for the minority that qualifies for the federal grants. If there is no work, then the government has to create a safety net to support the people who are unemployed through no fault of their own.
That means that the state employment agencies have to be retooled to be just that, employment agencies. Right now, they are a half-assed combination of welfare department and sub-Monster.com job board administrators. That would be a major undertaking, requiring government intervention in private employment decisions, educational and relocation subsidies. That also means that some people would, quite literally, be getting money for nothing.
The alternative, of course, is that the continued trend of more and more people competing for fewer and fewer jobs and a declining living standard for all but the wealthiest. History has plenty of examples of societies that have gone down this path and they have all ended with blood and ashes.
b-psycho
@passerby: Bingo.
The current system was built on acts of outright robbery and has been propped up on it ever since. Like I’ve said elsewhere, if what we’re seeing is capitalism then by definition there is nothing worth saving about it.
Will
Our political and economic system has been decaying for decades, as our elites have relied on wishful thinking, righteous moralizing and outright theft instead of honest thinking about the situation.
b-psycho
They’re elites, Will, they can’t be honest about it. No one is going to support "how ’bout you give our buddies money that you can barely spare to go gamble with while you bust your ass for peanuts & cheap trinkets? Then, when they blow it, we’ll steal more from you to cover their spread!"
It’s the same reason why they painted labor organizers as raging commies instead of just saying "we’re used to being well above everyone else, fuck what you think". Honest elitism is a fast track to swinging from light poles, and they know it.
AnneLaurie
In other words, the American financial industry has become a shiny new version of the medieval Christian church. So which route do "we" choose to break its monopoly — a global crusade or three? a Hundred Years’ War? Ooh, how about a worldwide Black Plague!…
Cynics will say that Our Political Masters have already attempted to gin up the first two, without much success to date. Barring a bird flu pandemic, or a strain of respiratory HIV, I’m afraid we’re going to see the "Look, over there! Scary alien not-peoples stealing our stuff & corrupting our precious bodily fluids!" theme yammered more loudly every time the Dow drops another 500 points.
Wile E. Quixote
It gets better. If you look in the comments section in the thread you linked to you can find this gem by Jason Rines, who posted the Caroline Baum article.
How do you even argue with this? I mean here you have someone citing an article about Ayn Rand and Atlas Shrugged and then bragging about how they set up a company to make money by spamming people and then got the government to pass a law against their competition and then saying that despite the fact that the performance of their company sucked they still gave themselves a bonus. Does this guy think that spamming is a productive economic activity? Does he think that Ayn Rand, if she were still alive, would be celebrating him as the real life incarnation of Hank Rearden, Ellis Wyatt or Dagny Taggart?
TenguPhule
If ever a man deserved to be ripped limb from limb by an angry mob, Rines is that man.
JasonF
@passerby:
There’s another brilliant piece by Taibbi here in which he takes apart Jake DeSantis, the AIG executive who published an open letter in the New York Times last week declaring that he was Going Galt.
Capt. Jean-Luc Pikachu
In private equity, 20% management fees are normal, so this doesn’t sound so far-fetched to me…
liberal
DougJ wrote,
Really excellent way of putting it!