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You are here: Home / Economics / C.R.E.A.M. / If they say why, why, tell ’em that it’s human nature

If they say why, why, tell ’em that it’s human nature

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Felix Salmon has a great piece about an interview Larry Summers’ possible replacement Laura Tyson and conservawhore Glenn Hubbard.

But the bit we were all waiting for was for Chrystia to ask Tyson and Hubbard about Inside Job, the film where they both come off very badly. The film’s director, Charles Ferguson, contributed a pointed blog entry to Reuters about the two of them, saying that they “exemplify the disturbing, opaque conflicts of interest that pervade the economics discipline”. Certainly it’s odd that the two economists, whose entire profession is based upon the premise that incentives matter, should be so resistant to the idea that the millions of dollars they’ve earned from the financial-services industry might in any way color their actions or beliefs.

[…..]

Ferguson knew how Tyson would respond: “she has confined her remarks on the financial crisis to extremely vague statements about ‘greed,’ ‘human nature,’ etc.” he writes, and that’s exactly what she did, taking advantage of the way that Chrystia phrased the question to answer a theoretical question rather than a personal one.

Tyson makes 350K a year for turning up to a few Morgan-Stanley board meetings each year. That’s nothing like the millions Summers was paid by hedge funds, but it’s a nice chunk of change for doing squat.

As I see it, elite public sector economists are bribed by bankstas via board of directorships and the like. Political figures are often bribed via speaking fees:

Buried in its profile of Ann Coulter, the Times reports that she makes 90% of her income on paid speeches, and recently charged $25,000 to speak at the Wake County Republican Women’s Club in Raleigh.

Those hefty figures are a glimpse at what is, in some ways, the real economy of politics. Most of the people you see talking on television or quoted in stories — who aren’t in elected office — make substantial parts of their livings giving speeches to private groups. Paid speaking, cleaner than lobbying, easier than the practice of law, cleaner than hitting up pension funds, well, safer than graft, has become the primary source of income for a broad range of political figures, beginning with Bill Clinton, who reported $7.5 million from paid speech in 2009.

The high fees for speakers like Clinton, Sarah Palin, and Stanley McChrystal occasionally draw attention, but beneath them are tiers and tiers more, with Harold Ford and Michael Steele, for instance, charging $40,000 for a package deal.

I’ll let you make up your own jokes about “package deals”, but 40K for a single speech from Michael Steele?

Reader Interactions

20Comments

  1. 1.

    NonyNony

    40K for a single speech from Michael Steele?

    Nonono. The sentence Ben wrote there suggests that it’s 40K for a speech from Michael Steele and another from Harold Ford. It’s like an extra-value meal of toxic waste – buy one, get the second for 1/2 off.

    And in the actual linked article Ben is citing, it really says that that 40K gets you a speech from Steele, another speech from Ford, and a third speech from Mel Martinez. So see, the whole thing is a bargain! You get three speeches that no one in their right mind would want to listen to for that 40K, not just one!

  2. 2.

    Suck It Up!

    for instance, charging $40,000 for a package deal.

    hmmm….curious about what’s in that “package”.

  3. 3.

    somethingblue

    Personally, I could listen to Steele all day. Man is off the hook.

    The other two, not so much.

  6. 6.

    Anonymous At Work

    I’d listen to Michael Steele speak if he paid me only 25k per speech.

    Wait…you mean he charges people to hear him speak?

  7. 7.

    Michael

    Why are you making fun of our producing producers of produced wealth?

    Next thing you know, you’ll want to raise their taxes to pay those unionized worthless douchebags that put out fires, stabilize our emergency health situations and drive ambulances.

    WOLVERINES!

  10. 10.

    Paris

    Just don’t call them whores, that would make Broder sad. Besides, no one is really enjoying what they’re providing.

  12. 12.

    Jules

    DougJ, I thought you might enjoy this Onion worthy letter that a local guy got printed in the Arkansas Democrat Gazette:

    http://www.arktimes.com/ArkansasBlog/archives/2010/10/13/a-modest-proposal

    It’s past time to replace penalties on profits with incentives. Reverse the graduated income tax so that those making under $200,000 pay the bulk of taxes. By the time a taxpayer achieves $1 million per year income, the tax rate would drop to near zero. At $5 million income, a year a taxpayer pays zero. Those earning $60,000 or less would pay the highest rates.
    By incentivizing higher incomes, people will strive harder, work longer and pay attention to what it takes to get into upper-income levels. It’s possible many taxpayers would report higher incomes just to get into a lower tax bracket.
    If Americans are for prosperity, then follow this path. A rising tide of prosperity will become a tsumami and flow down to help the crippled, blind and orphans.

    Satire at its finest.
    Now waiting to see how many letters are printed in the next week agreeing with him.

  15. 15.

    Brian J

    Just in case this stuff wasn’t outrageous enough, I’ve read that Tom Friedman gets paid $75,000 for a speech. He seems like a reasonably smart and well-intentioned guy, even if he is a bit off on some issue, but it’s nuts that he’s getting paid that much. I can easily a corporation spending lots of money for the expertise of some academic, especially in the sciences or something obscure where not many people are qualified to give such precise advice, but what in the world does Friendman know that others don’t that justify that kind of money?

    It’s not that I am against him. I’d probably cash in just as easily as they do. I just don’t get the mentality at the corporate level that justifies that kind of spending. For the bigger ones, it’s probably not going to make a difference in their bottom lines, but still, these are probably the same corporations that will send out memos about shutting off lights, turning down the heat, and cutting off pen and coffee supplies while spending money on speech like the one Friedman would give. It’s puzzling.

  16. 16.

    DanF

    If we learned anything in the Citizen’s United case, it’s that money cannot corrupt public officials. The SCOTUS has spoken. So, ya know. Also, too.

  18. 18.

    georgia pig

    You missed the best part from the Politico piece:

    I’ve been wondering — and am interested in readers’ takes, particularly those in the industry — how this private economy affects the public politics. For one thing, it provides an incentive for consultants and out-of-work politicians to volunteer themselves to cable television and to make themselves interested and controversial enough to stay on it. (It’s a kind of subsidy to cable.) Cable hits are a kind of loss leader on the speaking circuit — they don’t themselves play, but they make a paid speaker more saleable.

    Is that supposed to be tongue in cheek?

  19. 19.

    TomG

    I wonder whether the psychology behind the willingness to pay so much for these speeches is in anyway related to a problem sometimes faced by open source software – if you aren’t charging anything, people seem to think your product isn’t worth using – without bothering to actually try it.

    And conversely, if you ARE paying through the nose, surely you’re getting your money’s worth. Right ?

  20. 20.

    JoyfulA

    I stopped contributing to the Salvation Army when my local newspaper mentioned that SA paid Gary Bauer $6,000 to speak at its regional convention. Between the time Bauer was booked and the date of the speech, he became an official presidential candidate and so he did not charge for the speech, which was the topic of the article (“Presidential Candidate Speaks to Salvation Army Executives”), but still!

    My modest contributions were intended to send poor city kids to camp, provide shelter for the out of luck, and feed the hungry. I did not intend to enhance Gary Bauer’s lifestyle and broadcast his evil message.

    I have been much more careful about the charities I support.

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