There’s a beautiful article out on a letter from Andre Lahde (h/t Americablog), whose hedge fund made an 870% return last year. He’s retiring, because the banks are too dangerous to do business with and because he’s disillusioned. The most scathing parts of the letter are these:
`I was in this game for money,” Lahde, 37, wrote in a two-page letter today in which he said he had come to hate the hedge-fund business. “The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.
“All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other sides of my trades. God Bless America.”..
.. He said he’d spend his time repairing his health “as well as my entire life — where I had to compete for spaces at universities, and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not.”
This is the ultimate reason I’m bearish long term, not just on the US, but the West as a whole. The US, being the core, is just the place where the rot has gone deepest. Elites move in packs, following the elite consensus, and ignore reality. The most capable people are not those who are put in charge (Bernanke? Bush? Paulson? Are you serious?) There isn’t even a pretense of it. People are rewarded for staying with the elite consensus, not for being right. Nowhere was this made more clear than by the fact those who called the Iraq war correctly were almost universally demoted or fired, while those who called it wrong had their careers prosper. (And why are the authors of Dow 36,000 still on TV!?)
Meanwhile the world financial class has just managed the economy into a crisis which will take a trillions of dollars to unwind. With extremely few exceptions, no heads have rolled. People still act as if Greenspan has something worthwhile to say other than "sorry, I’ll go hide myself in shame for the rest of my life" or that Paulson hasn’t spent his entire tenure in the Treasury department looking out for his friends on Wall Street (not even all of Wall Street, mind, just the folks he likes) rather than the American people. Neoliberal economists knew the bailout was a bad idea but wound up supporting it anyway, and are now puckering up for Bernanke’s butt despite the fact that Bernanke is so incompetent he’s lost complete control of short term interest rates and has bungled the job from day one.
Of the five smartest people I’ve met during my life only one was on track to get a PhD when he died. University in the US is a class issue. The lower middle class and the working class don’t finish it, their completion rates have dived through the floor. The upper middle class gets into decent universities and a small number of people go to the elite universties, then go on and run the country’s major companies and run its politics. I don’t ever want some Yale boy or Harvard Alum to brag about their Alma Mater ever again—they’re the people who have been in charge, after all, and they’ve blown it.
Half the country is functionally illiterate, most of the rest are barely literate (how many read a book last year?) and the remainder, however hard they may think they worked, were effectively coddled and primped from birth for success.
But, as with their icon George Bush (oh, they’ll try not to claim him, but he’s one of them) they were born on third and think they hit a triple. So thinking that they merit 50 million dollar salaries (or even $500,000) ones, they have spent the last thirty years making sure they got paid well and everyone else was squished under their heel. Somehow to these worthless leeches "managing" is worth 8 figures, but childcare or picking up garbage isn’t even worth having a minimum wage for. Who’s work do you think provided a positive value to the economy last year – Bear Stearns executives, or your local garbage men?
Exactly. The bloated sense of entitlement has become completely out of proportion. Oh, every society has its sociopaths like most CEOs and as Keynes quipped, you’ve got to give them something to do. But you don’t let them run the society. You don’t pamper their preening egos. You don’t pick up their shit and say "this smells wonderful, can we have another Iraq war!? " Or "why yes, I think you should be paid 9 figure a year, oh great CEO, for running the economy into the ground."
It would be one thing if they were ruthless competent scumbags, like say Vladimir Putin. There’s nothing immoral George has done that Vlad hasn’t done worse, but at least he’s not a worthless bumbling fool. When Vlad the impaler decides to knock over a country, that country generally gets knocked over and when one of Vlad’s plans doesn’t work, he cuts his losses post-haste, he doesn’t pretend it’s a success when it’s a failure.
No, the problem is that the West’s elites, and especially America’s, are boobs. They couldn’t run a hot dog stand, let alone the world’s economy. And I think, in their hearts, they know it, even if they’d never admit it. It’s why they never allow any real accountability, because if one of them is guilty, they know almost all of them are guilty. They all sat aside complacently while the world economy went into multiple bubbles. They almost all sat aside while Iraq was planned and executed. They all watched Afghanistan go up in flames. Most of them signed on for the bailout even as they were saying "I have no idea how this could work, but we should do it anyway".
The American aristocracy is a good description of them. They’re entitled. More and more they are the children of previous members of the class. They’re rich, they’re inbred and they’re an incestuous bunch, with everyone’s hands in everyone else’s pants (somehow I’ve never been able to convince a think tank to do a chart of the top 1,000 influentials in DC listing all romantic and family ties. Wonder why?)
In short, they’re rich, have a deep sense of entitlement, think they’re the best and fear they aren’t. They take care of each other first "2 trillion to bail out your bank, dahhhling? Of course, but we mustn’t give the peons health care" but they make sure the peasants keep their place.
There are no problems the US has that can be fixed with the current ruling class still in place. They will keep mortgaging the future to save the past: their rule is that the future cannot happen faster than they can buy it up, because if it did they know they couldn’t naturally compete for it, because they are, actually, incompetent.
Until there is a change in who runs America it is going to be very very hard to fix anything in America. Great nations always rot from within, and you always read contemporaries who knew exactly what to do and wonder ‘why didn’t they listen?’ They didn’t listen because opening up the real franchise, the real power centers to newcomers was a much greater threat to them than their nation going into steep decline. Or so they thought. Fortunately for America, there are no barbarians on the border. But I think Americans will find that they don’t need to import barbarians anyway.
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Jeeze, Ian…you really do have a problem with ambivalence, don’t you.
I agree wholeheartedly, unfortunately.
Thanks Ian
George W. Bush is simply the spawn of Ronald Reagan’s defective sperm. Talk about inbreeding.
Well on the one hand maybe, but on the other, perhaps.
OT but I thought Ian might enjoy this series: On Tough Times
Save the country! Reform FISA now!
now that is one righteous rant.
tw3k!
“who called the Iraq war right were almost universally demoted or fired, while those who called it right had their careers prosper.”
…is a typo or you haven’t said what you meant to say, Welsh.
I would edit for you thus, “Those who called the Iraq war CORRECTLY..”
The Lahde quote is terrific.
Ooops. Thanks, fixed.
selise! :)
Well, you never know. But, as I usually say on these occasions, what are we going to do about it? “Name” colleges are code words for class(or aspirations to a class), and the people on the inside tend to choose people who come from the same places they do…what do we do? Pass a law that says that no one can name the colleges they’ve been to? Just their degrees? Create a standardized federal test where the grade you get determines where you can get a job?
He is just a hippie.
Well, how about move to a national scholarship system at the high end plus a guaranteed tuition for those who meet certain criteria while holding tuition below the rate of inflation, and at the low end stop tying school funding to local property tax rates?
When I first went to university in 86 the tuition was $1,200. The last year I paid attention, 98, it was over 5K. I don’t know what it is now. Tuition costs have to be held down at one end, and tuition has to be subsidized at the other.
There’s nothing you can do about name universities in th eprivate sector other than increasing the quality of non name universities, but the public sector should go back to the public service test as its primary intake method.
He’s a hippy who made 870% returns. Heh. But yes, he’s definitely a hippie.
Thanks Ian.
digg
imo, this is a seriously important point – the elites are incompetent.
this is not a matter of ideology. this is something that ought to matter to rightwingers tool; i know it does matter to my rightwinger relatives – torture may not bother them but stark raving mad incompetence does.
if we can work to show our elite up for what they are – as ian so elegantly puts it – boobs, i think we have a better chance for real change then our current method of moving the pieces around a bit every two years. but one thing this will entail is never, ever making excuses for or ignoring the fuck ups on our team.
i’ve posted this once before, but i think it belongs here – it’s something krugman said when he was still wise as well as smart. sorry for the typos, etc – i made the transcript from an audio file of the event where krugman gave a talk on The New Class War in America :
krugman said this in 2006. the only thing i think has changed is that it’s becoming more drastic.
Yeah, it’s a typo. I’ve noticed that a lot of the more acclaimed sites sometimes don’t correct the typos. That one really needs it, though.
Well, Ian, I can’t disagree with you at all. When my mom went to SUNY in the late 1950s, tuition was free. Period. And I think California’s public college system was free to residents during a certain period also. Something that I looked at a long time ago was the average amount of debt that students came out of college with. The amount of college loan debt that public college students come out with is mind blowing. We won’t even go into other debt they have in terms of credit card debt, auto loans, etc. Just the college debt. This is the group that does a couple of things that are really really good for the economy: They get married and they set up housekeeping, two things that throw a lot of money into the economy. With the amount of debt that college students come out with now, many times they can’t afford to do anything but go home and live with their parents. They can’t afford to get married and they can’t afford to set up separate housekeeping. And the debt load, because of credit cards, healthcare(because once they are out of college, they can’t be covered under their parents’ health coverage…IF their parents have health coverage), etc. just gets larger. I’m amazed anyone gets married today.
As for disengaging school funding from local property taxes, wow..this is a huge item. One of the things that I feel prevents this is this very sneaky and entrenched belief by a lot of people that somehow education is NOT a public good.
We do exist.
I never made that money, but I have the working class origins and the Ivy League Wharton pedigree, and I’m a DFH activist asshole.
I can accept converts over who are genuine. Kevin Pollack comes to mind. I didn’t profit from the system, but I can swim in it or at least around it while working this side of the street.
There may not be a lot of us, but we do exist.
Cenk at Young Turks is another. So, for that matter, is Andy Stern. Or Matt Stoller.
Ian, your article describes the elites in England beautifully.
There was an essay I read recently about the people working in the docklands of London (the financial district), who were also not intelligent and had a sense of entitlement.
It’s not what you know, It’s who you know, that counts.
Ian, brilliant.
Oliver Stone depicts these privileged fucks well in W’s frat boy initiation scene.
You really need to read US history.
MJ was made illegal as part of the “brown People as bad For Us” scare in the 1920s,as it came in from the Mexico and was used in the SouthWest.
It was a racist prohibition.
For anyone who questions this, all I have to point to is what happened with the GI Bill after WWII. Before WWII, unless you lived in a place like NYC and could go to CCNY for free, college was a rich man’s game(or you were super bright and got a charity scholarship). Millions of men came back from the war and got something that they could never ever have gotten before: a college degree. And we all see what happened to the economy when the US invested in the education of its people in this way. And I would like to also point to what has happened since…
i have a lot of respect for matt – but after sitting next to him at dinner one night in CT, i’m here to tell you that the sense of entitlement is there. he may have more justification for it, but it’s still there, big time. i don’t know if it’s possible to see it from the inside – although i am grateful to all who make the attempt.
Yeah. I agree. I put Putin in for a reason. He’s as big a scumbag as George Bush, but can you think of any one on one situation where Putin would not crush Bush? Is there anything Bush can do better than Putin? Anything?
Same thing in China. At the end of the day, you can be corrupt, but you need to be able to do your damn job too. And if you blow it, off with your head (more or less literally).
Both those societies had recent resets. The US hasn’t had a reset in a long time, not since the 30s. It had some mild changes in the 70’s and early 80s, but those are best seen as generational changes.
There’s an old schema for wealth that runs as follows:
First generation earns it
Second generation manages it
Third generation squanders it
We’re well into the third generation now, and it really shows. The guys in the thirties through 50’s remembered that everything could go to hell. the 60s and 70s crowd at least had some memories or knew people who knew. The guys now? They think they’re invincible.
I do read a book once in a while *g*. But I could do some googling now, and find out that people are put in jail everyday for this terrific crime. Even white people. But I will let you do that.
Oh, I know you do. I have a number of friends from that area. It’s one of the signs of the cracks, the franchise is getting smaller and smaller, squeezing out too many capable people now (or disgusting them out, as the case may be.)
Heh, in my family, the saying was “dirt to dirt in three generations”.
Investing in those men created so much wealth for our country, so many jobs, such opportunities for their children, it’s almost hard to believe.
The problems that come from thinking you’re a democracy when you’re really a plutocracy.
when i first lived in CA (early-mid ’80s) i remember undergrad tuition for the UC system was just the fees, which i think might have been about $300? don’t know for sure because i’d already gone to school and was just starting work, it’s just want i remember reading and hearing from folks.
oh – and the important point was that any kid who graduated in the top 10% of their class was automatically admitted to the UC system. and then there were the state schools and community colleges – california used to be heaven for schools.
…..
one thing i do want to disagree with though is that i’ve worked with lots of folks who went to school at mit or caltech and none of them have been idiots (on the contrary). otherwise i can’t disagree with ian’s larger point.
I remember an NPR story about this(they interviewed Bill Gates and his father as one example) and one of the things that stuck with me was that for every $1 spent on education with the GI Bill for those folks, the country actually got $18 in return. But one of our big problems in the US has that we don’t have a real economic policy (not the way places such as India or China do), and we certainly do NOT have any sort of connection between our education policy and any sort of economic planning in this country.
Well… I did specifically mention Yale and Harvard. They seem to graduate a lot of fools. Especially Harvard.
From the crowd of over 100,000 Obama supporters in the wonderful blue city of St. Louis, Missouri. Words of pride.
http://www.flickr.com/photos/2…..otostream/
Goldman Sachs is gonna be alright. Obama’s got Rubin (former GS). Bushco’s got Paulson (recent former GS) Paulson hired Cashcarry (GS). Paulson won’t dispatch Cashcarry to begin spending the 700 billion until after the election. Who’s on first?
really
don’t have so much experience working with folks from yale or harvard. all i know are the ones i see in politics. which i guess is evidence in support of your point.
that is more than 100,000 people.
This same thing happened with the press. They Have got it in their feeble minds that all they have to is repeat what they are fed.
http://www.scholarsandrogues.c…..the-press/
isn’t it prudent not to use broad brush strokes?
ygm FB
wow. catch you all later, this is a bit much for me
I’m there
Selise – I don’t think you can make a connection between Caltech and MIT and Harvard or Yale. Caltech, MIT, RPI, RIT, etc. etc. are filled with people who are scientific, mathematical and engineering types. I once did an interview with an electrical engineering prof at the Watson School of Engineering here at BU who had come from teaching in engineering and technical colleges in the former Soviet Union. I asked him what the major difference was between teaching US engineering students and the ones in the Soviet Union and he said: In the Soviet Union, everyone has far superior preparation in science and math to US students across the board. Even the brightest US high schooler from the best science high school could not compete with a mediocre Soviet high school level student in terms of preparation. But the major difference is that in the US, for students who are bright in math and science BUT who know from a financial end that they must be able to get the best job they can straight out of college, engineering offers them their way up and out. In the former Soviet Union, engineers are a dime a dozen – it does not carry nearly job status that it does in the US. So, he said that US students, although they were working from behind, worked harder and better than Soviet students did. So, that may be why your experience with people from MIT and Caltech was so different from what is seen from ‘name’ liberal arts institutions. Different beast entirely – and hungry ones at that.
The press makes too much money to be Democrats. They’re celebrity Republicans. Alan Grayson nailed the Orlando local NPR reporter – Mark Simpson. Simpson stepped in his own turd and asked, “Are you anti-war?”
Grayson retorted, “Are you anti-peace?”
FWIW, I think Wall Street’s meltdown will help liberals/progressives pass legislation to take most corporate money out of the election process.
Well, despite the fact that I work with two of them, and neither are idiots,lets just say that my opinion of Harvard MBAs is less than flattering. And seriously, the folks running the system mostly come from the same 14 schools or so, and they’ve blown it.
By their fruits shall you know them. Besides, being smart is no protection from being a fool. If only. ;)
back at you
This is a very good post. We thought we were immune from aristocratic rot but the upward rush of wealth facilitated it anyway.
A very big contributing factor to the fact that we are ruled by idiots.
I seem to recall an article talking about the vast endowments of the elite universities, Harvard is now in the tens of billions – it described it as an unregulated, tax-free hedge fund, which kicks back some of the profits to the university to keep the brand shiny, hire the most eminent professors, let the legacies of the rich in so that they will continue to make tax-deductible contributions which they invest to make tax-free gains, and always trying to keep the velvet rope in place to keep out all but the most deserving poor who have a chance to become rich and then contribute gratefully to their alma mater.
And George Bush wasn’t just born on third base, he somehow managed to steal second while he was there and pat himself on the back for it.
Nope. They’ve been in charge, they get the blame. That’s the way it works. Especially since they deserve it.
In the past, there was incompetence and corruption but there were limits because there were always other power centers. Unions could balance some of the excesses of corporations. Corporations were smaller so they too acted as counterweights to each other. Social movements also had more influence.
But as corporations got larger and larger, there were fewer and fewer checks on them. There were fewer competitors. The unions were eviscerated, derided, and diminished. Social movements lost focus or couldn’t gain critical mass. Politicians no longer had to reach out to the many to get elected. They needed only a relatively small handful of large corporate contributions to fund their campaigns. Those who were buyable and bidable won. Those who didn’t lost.
For decades now, since the 70s at least, corporations and those who run and own them have chosen our political and economic leadership. During this time power has become more and more concentrated. The checks and balances on corporations were progressively dismantled. So not only did they have more power they could use it with less restraint. Such a system is sustainable for a while until the constraints are gone and society’s reserves are used up. Then mistakes and bad decisions accumulate. Eventually the system isn’t able to adjust and crashes. This is what has happened to us now.
It is compounded by a self-selecting elite that holds all the levers of power. This Establishment sits on both sides of the aisle. It is both inside government and in the corporate boardroom. It is made up of both elected officials and much of the bureaucracy. Paulson is one of the prime architects of the current meltdown but he was easily confirmed by the Senate in 2006. He is now supposedly the prime cleaner upper of the current mess. McCain’s economic advisors were involved in this but so were Obama’s. The people we have and those of either of the candidates we elect. They are all part of what created the meltdown. I just don’t see any of them doing what needs to be done to fix it. They would never have gotten where they are now if they had that in them.
end rant
Heck .. a lot of bloggers are Ivy League grads … Yglesias .. Atrios(I forget whether he has an undergrad .. or Masters from an Ivy) … Josh Marshall … even Krugman … lol
New post upstairs
Ian, please don’t hold back. What do you really think?
“But I think Americans will find that they don’t need to import barbarians anyway.”
The truth is touched here – “barbarians” is a little strong, but the truth is that the elites have managed to create elite-wannabe’s out of most of their victims. How many times have I heard, “Well, if I was making that kind of money, I’d be pissed if the government took that much!” For many Americans – in the future, everybody will be rich, and it’s those damned social(ist) programs that are holding them back.
I don’t buy into that. I guess if I believed that you have met EVERY person who went to those schools and they were ALL scoundrels … blah blah blah. I won’t waste my time arguing contrary because you believe it to be so.
Another factor in terms of how all this mess happened and did not ‘get caught’ is that it would look as if the feds did not WANT it to be found. For all the hand-wringing and wanting the FBI to investigate the financial fraud, the FBI is saying that it really doesn’t have the resources to do it – because the Administration made them focus their resources to anti-terrorism activities after 9/11:
“While the FBI plans to double the number of agents working on financial crimes, people within and outside the Justice Department question where the agents will come from and whether that will suffice, the Times said.
Records and interviews show that FBI officials have warned of a looming mortgage threat since 2004, and asked the Bush administration to fund such nonterrorism investigations, but the requests were denied and no new agents were approved for financial criminal investigation work, the newspaper said.
http://news.yahoo.com/s/nm/200….._resources
Isn’t Putin a black belt in some kind of martial art?
thanks – i had forgotten that one.
Judo.
I think about the two Yale graduates that I know in meatspace. IMHO Yale didn’t make them dumb. Yale got them thinking about their missions in life in ways which they might not have in other places. But one is a professor of Classics and one is an attorney and hardcore Lubavitcher.
My impression is that the people who go onto Wall Street from those kinds of places consider it another big prize, just like their getting into the Ivy League school was a big prize. So they are not motivated to do things which are objectively competent, but the things which will give them the best prizes. There will be ambitious people such as this in any society, but the people who support the cult of college admissions which the ambitious ones have bought into don’t really value education as much as they claim they do. Ian is right that a society which valued education would not be ashamed to send its brightest kids to a public institution and make those institutions worthy of the bright kids.
Yes, very important point. People need to be disabused of the idea that they’re pre-rich. It’s another of those statistical disconnects. In fact, the US now has the lowest mobility of any Western nation, but people don’t get that yet. I think it may be about to get through to some folks though.
“I’m not rich, and I’m never going to be rich and what is good for the rich is not good for me.”
Beckett doing fine!
Oh come on, that’s like saying “you can’t say most swans are white, because you haven’t met every one”. They were the people in charge. They blew it. The pragmatic test of truth is passed. If you won’t hold your elites accountable, they will just keep doing this stuff to you.
lots of smart people aren’t very wise. imo society will do best when we all can find ways to contribute – not just the richest or the most well connected, not even the smartest. we all need to participate and we all need to have access to the necessary information and time to think about it and discuss it. every time we narrow the circle of who has access, of who gets a say in the decisions that will affect them – we make society less than it could be.
$285 trillion in paper…$62 trillion in the rot pile created by these elitist for us to bail for? Please explain what the $285 consists off. I am sure that it has something to do with the angst is gives you?
Yes, this is also good basic economics. Freezing people out means freezing out their contributions. “underemployment” is a sin, so is undereducation, so is forcing people to stay in bad jobs because they fear for healthcare. You want people to be able to pursue what they really want to do, as much as possible, because it is there where they are most likely to make the greatest contribution to the happiness of society. When you put roadblocks in place that stop people from pursuing their dreams, from getting educated, from starting new businesses and so on, you are making your society and your economy much smaller than it should have been.
Much of the problem here is that the way inflation, especially oil inflation, was choked off was by choking people into the dirt. They didn’t want people doing more than they had to because they were scared of people causing inflation.
Remember the obsession with wage-push inflation all through the eighties and nineties? “We can’t let ordinary people get ahead” is what that was all about.
The best economy is the one that lets as many people as possible pursue happiness.
Don’t remember the exact numbers. but most of the 285 trillion are currency swaps and interest rate swaps.
I remain unconvinced that many of the people in power are fundamentally stupid.
I’m much too cynical to believe that stupidity has any part of it, when the behaviors have been unilaterally successful at the continual establishment and re-establishment of their own opulence and authority.
Don’t confuse stupidity for selfishness and remorselessness; they’re not the same thing.
opening up the franchise – not just to us, but to everyone.
that’s the opposite of what our elites want, but it’s what we need.
stupid because they are thinking short term.
I think the era of Bush should have convinced us that EVIL and STUPID are not contradictory, you can have both, it’s just a question of percentage.
In general I have found that
EVIL/stupid explains the Cheney administration, while:
STUPID/evil explains the Bush administration
This is where Kohelet (Ecclesiastes) comes in. You have a right to enjoy what you are doing: that is your portion from it. But if you think that in the end what you are doing is for you, you are living in a dream world. (Today Kohelet was read)
Tuition runs about $45 K up here.
I think this is a really important post. For too long, people have used “elitist” to mean educated. Going to Harvard did not make Obama elitist, it made him educated. It gave him the tools to improve his community and, presumably, some of the motivation to do so.
Going to Yale, however (helped) make Bush (even more) elitist, not educated. He went to Yale…to go to Yale. In doing so, he managed to simultaneously:
a. take the spot of someone more deserving
b. convince himself that he was even more deserving, even as he squandered his opportunities for real education
An elitist double-whammy, if you will.
A good education does not make one elitist. Touting, then wasting a good education, does.
“Elites move in packs, following the elite consensus, and ignore reality.” — Ian
There is some kind of belief that somewhere in that pack there is someone who knows best, or that they’ve hired people who know best. So, they can safely ignore reality because they pay other people to do that for them.
However, large packs are a little easier to observe and predict. That’s probably how Lahde worked his fund. The smaller leaner faster packs of wolves will always be well fed. Nature shows us that.
”In finance, a swap is a derivative in which two counterparties agree to exchange one stream of cash flows against another stream. These streams are called the legs of the swap.
The cash flows are calculated over a notional principal amount, which is usually not exchanged between counterparties. Consequently, swaps can be used to create unfunded exposures to an underlying asset, since counterparties can earn the profit or loss from movements in price without having to post the notional amount in cash or collateral.
Swaps can be used to hedge certain risks such as interest rate risk, or to speculate on changes in the underlying prices.”
I would imagine that risk is at the center…how long these ”instruments” exist is yet unknown to me. Seems that the casino was based on covering time based bets to lower individual risk.
Has an economists tackled the implications of this paper as in a scholarly paper. Seems this is a massive betting game we are fronting the aristocracy for.
Short-term for who? Their general welfare is still intact, if due in no small part to their actively working together to ensure that it will be.
The nature of the term is rather irrelevant to anyone but the rest of us. They sacrifice us for gain, and they succeed. Whether in the short-run or long-run the end-game for them is functionally unaltered.
They may end up at the top of a shorter ladder, but almost never to they get flung down to the bottom rung.
If the continual and unaltered success of these behaviors is nothing more than dumb luck in-spite of themselves, then that is one monumental string of positive fortunes.
The point is that they may lose control here. They’ve pillaged so much from the future that they may not be able to keep self-replicating control. There are also very specific plays I’ve watched where they’ve obviously lost control and fucked up, for example the oil price spike was a failure in policy, and when they choked off money to calm that down they precipitated this part of the crisis before they wanted it to happen.
Likewise, how the Iraq war turned out is not what they wanted.
No, their execution is atrocious. They are incompetent. When you control the most powerful military and economy in the world you can get away with being incompetent for a long long time.
About 30 to 35 years, it looks like.
For thr non elite the point is…They knew where this was going from the gitgo. When the derivitive market was created they needed a patsy to bail them out as the pyramid was reaching critical mass.
They live carefully in a parallel universe with exemption from the rules we have to live by.
Arisocracy has always been able to get away with rape, murder and plunder. That is what they do to stay ahead of the 95% and they will absorb the crossovers with reservation..
they may tip the ladder over.
see easter island (more here)
It seems like a rather specious claim that stupidity can perpetually result in unanimously net-positive outcomes for the perpetrators.
It seems significantly more likely that they appear stupid to us, because they seem utterly incompetent at the job we think they’re supposed to be doing. The reality seems to be that they’re incredibly good at the job they think they’re supposed to be doing.
We’re not upset at their intellect, just their complete lack of altruism and benevolence.
In that case the stupidity seems to rest on our side of the fence where we believe that turning public-service into a glorified popularity contest for rule and riches will ever consistently produce altruism and benevolence; rather than selfishness and remorselessness.
Old boy clubs.. think of well…”Trading Places” Clubs you have to be born in.
I can appreciate your characterization of incompetence, and share the same inclination. However, I’ll believe its stupidity, rather than a minor miscalculation of their ideology, when I walk out my front door in downtown Portland, and the guy on the stoop asking me for spare change is Donald Rumsfeld or Dick Cheney.
I would like to thank you very much for your writing; as well as your engaging in discussion.
They are in the framework of an “establishment’. Protected in the court system, the political system and the financial system.
John Kiff “CDO rating methodology: Some thoughts on model risk and its implications,”
How much trouble are we really in? $285 trillion in basically unsecured debt means tha Bushco has facilitated the greatest theft in the history of governments. “We The People” have been screwed royally by the aristocracy in a class war they intend to have won permanently. They walk and we talk. Nancy Pelosi is the alltime buggest traitor in the world.
And the media which they own as well. McInsane will still be in the club. barack will never be in the club.
Ian,
Your post is terrifying and true. I speak as a person who worked himself into the elite. My dad worked as an electrician on the ships that came back from the Pacific to be repaired in WWII. We were ordinary people. I ended up at Yale, became an academic, friends of people in very high places, acquaintance of people in even higher ones, including present Preznit. My generation looked down on people who have since our time made it financially. One of the dumber guys in my cohort got into Yale Law School. I felt sorry for him because he couldn’t get admitted to a good grad school. Medical school almost the same.
I look at my young students. Most decent. But the money draws them. My niece who is on track to be VP of a major pharmaceutical corporation is killing herself, her kid and her marriage for that position. And I don’t think she even knows now why she wants it. she grew up in a family that didn’t put money above everything else. But she lives in a society that does.
The US of A is badly fucked up. I moved to Canada, long ago, and am happier (if feeling more guilty) for it.
This reminds me of a talk I saw by Jared Bernstein, about how societies come to completely collapse – this op-ed excerpt hits the same basic idea:
Isn’t that the plot of Pearl Buck’s The Good Earth?
Have enjoyed your entries here at FDL Ian. This one rates a 10/10.
Historical precedent points to cultural,social and economic equity rot and ruin going hand and hand with the ignorance of imperial arrogance.
American imperialism appears to be subject to the rule.
American “exceptionalism” was not ever a valid or sustainable premise.
As Ian points out above the “talent” who have been running things have rewarded themselves what they did not earn or deserve. The “elite” in American society and at top of American economic strata have awarded themselves in far too many ways that had nothing to do with real world rules of failure,being wrong or just plain being stupid.
Doing imperialism requires more intelligence and competence than what the Americans have been putting into this American Empire for a long time.
Clearly for far too long a time.
FDL does well in offering many good people who bring and offer much insight and better ways to think and see. Thank you FDL. Thank you Ian.
Yale – Dubya, Bill Clinton, Hillary Rodham Clinton
Harvard – Obama
I think aristocracy is a better term than elite for what Ian is describing.
Just a quote from C. Wright Mills THE POWER ELITE (1956), in a chapter called “The Chief Executives”:
When it is asked of the top corporate men: “But didn’t they have to have SOMETHING to get up there?” The answer is, “Yes, they did.” By definition, they had “what it takes.” The real question, accordingly is: what does it take? And the only answer one can find anywhere is: the sound judgment, as gauged by the men of sound judgment who select them. The fit survive, and fitness means, not formal competence–there probably is no such thing for top executive positions–but conformity with the criteria of those who have already succeeded. To be compatible with the top men is to act like them, to look like them, to think like them….This is what is meant–and nothing else–by being a “sound man,” as sound as a dollar.
The King can be incompetent and still stay king. They’ve got a lot of power, yes, and they’ve made themselves rich, yes, but they’ve made a lot of screwups along the way. “Never count a man lucky before he’s dead.”
You Rock Ian!
Ian, between this post and “the Invisible Hand …” where do you find the time? Both are absolutely brilliant, and the commentaries are starting to reflect an understanding of economics as well. You do good work.
Ian, are you familiar with Henry Mintzberg and his critique of MBAs?
http://en.wikipedia.org/wiki/Henry_Mintzberg
http://www.amazon.com/Managers…..038;sr=8-1