Basically, he sees the current pay structures of banking, with enormous bonuses for short term results, as being a major factor in the current banking/credit crisis.
Further, he sees banking as an industry with an amazing talent for, “privatising gains and socialising losses.”
He says, “My attitude to the banking industry is not a prejudice. It is a ‘postjudice’.”, or to be translated into more prosaic language, he learns from the mistakes he observes, and prior behavior colors his attitude towards the industry.
It is the nature of limited liability businesses to create conflicts of interest – between management and shareholders, between management and other employees, between the business and customers and between the business and regulators. Yet the conflicts of interest created by large financial institutions are far harder to manage than in any other industry.
That is so for three fundamental reasons: first, these are virtually the only businesses able to devastate entire economies; second, in no other industry is uncertainty so pervasive; and, finally, in no other industry is it as hard for outsiders to judge the quality of decision-making, at least in the short run. This industry is, in consequence, exceptional in the extent of both regulation and subsidisation. Yet this combination can hardly be deemed a success. The present crisis in the world’s most sophisticated financial system demonstrates that.
Basically, he is saying that these institutions are immature and short sighted in outlook, but they possess the ability to destroy the output of the most of the rest of society, and so they need aggressive regulation.
They basically buy into the “experience” meme, and I think that they also don’t see any “there” there for Obama.
Their reasons for not endorsing Edwards, are pretty mainstream, basically the alibis rich and comfortable people use because so they don’t care about his issues.
I would disagree with them on “changing the tone of the campaign”.
Honestly, since Obama has taken a more combative turn, I have been more impressed with him as a candidate, if just because it shows some facility for dealing with the Republican Slime Machine.
It’s not that they say such lofty things about McCain, but rather the degree to which they go after the Rudolph Giuliani clown show:
Why, as a New York-based paper, are we not backing Rudolph Giuliani? Why not choose the man we endorsed for re-election in 1997 after a first term in which he showed that a dirty, dangerous, supposedly ungovernable city could become clean, safe and orderly? What about the man who stood fast on Sept. 11, when others, including President Bush, went AWOL?
That man is not running for president.
The real Mr. Giuliani, whom many New Yorkers came to know and mistrust, is a narrow, obsessively secretive, vindictive man who saw no need to limit police power. Racial polarization was as much a legacy of his tenure as the rebirth of Times Square.
Mr. Giuliani’s arrogance and bad judgment are breathtaking. When he claims fiscal prudence, we remember how he ran through surpluses without a thought to the inevitable downturn and bequeathed huge deficits to his successor. He fired Police Commissioner William Bratton, the architect of the drop in crime, because he couldn’t share the limelight. He later gave the job to Bernard Kerik, who has now been indicted on fraud and corruption charges.
This guy has been infesting the Washington Post for years, and if you know the topic, you generally don’t have to read him.
His standard schtick is something like, “Social Security and Medicare? They are bad, they make you stupid. You should be an overpaid pundit like me,” so you could have knocked me over with an adolescent tuna when I came across Mr. Samuelson railing against excess salaries and lack of accountability:
Here are estimates for 2007:
Investment banker: $2.1 million, consisting of $275,000 in base pay plus $1.2 million in cash bonus and $625,000 in long-term bonus. (An investment banker helps firms raise capital by selling new stocks and bonds and also advises on mergers and acquisitions.)
Bond trader: $1.5 million, with $240,000 in base pay, $975,000 in cash bonus and $310,000 in long-term bonus.
Hedge fund manager: $1.8 million, split between a salary of $265,000 and $1.5 million bonus.
Just why investment bankers and traders out-earn, say, doctors or computer engineers is a question I’ve never heard convincingly answered. Are they smarter? Unlikely. Do they contribute more to the economy? Questionable. True, Wall Street often performs a vital function. It channels savings into productive investments. It helps provide access to capital and credit. In 2006, U.S. companies raised nearly $4 trillion through new stocks and bonds. Many financial innovations, including mortgage-backed securities, have benefited individuals and companies.
But Wall Street also frequently misallocates capital and credit. The “tech bubble” of the late 1990s was one episode. Now we have subprime mortgages. Why? Well, the herd mentality of financial crazes has a long history. But compensation practices skewed so heavily toward bonuses based on annual profits make matters worse.
You know, these lessons are not only the same ones that were used to change public policy (Glass-Steagal anyone?) following the Great Depression, but they are actually predicted by free market theory.
If I can make a million or so dollars, and and do not lose this money when the crash comes, why the hell should I care about long term consequences?
One hopes that the current crisis will lead to a re-evaluation of the slavish devotion to the unregulated market as a solver of all problems.
Reporting was contributed by Al Baker2, Anne Barnard3, Brooks Barnes4, David Carr5, Sewell Chan6, John Eligon7, David S. Hirschman8, Thomas J. Lueck9, Angela Macropoulos10, Jennifer Mascia11, Colin Moynihan12, Campbell Robertson13, Melena Ryzik14 and Paula Schwartz15.
By Martin Schram – Published 12:00 am PST Sunday, January 13, 2008
The verdicts of Iowa and New Hampshire prompted a handful of the 2008 political players to depart from the presidential campaign trail.
But far too many remain for our own good.
Along with the handful of presidential candidates who dropped out so far, voters might be better served if a hundred or so of my political-reporter and pundit colleagues dropped out as well – and were replaced by journalists whose beats are about national security, economics, environment and health care.
For our coverage has not been serving the public interest by providing the sort of information voters really need to know – especially in the last weeks when many voters make their decisions.
I would add something more significant. That among top tier political reporters, not only is there a lack of understanding about the political issues of the day, there is actually an active disdain for knowing these issues.
It’s all about the game, not what it means to win or lose.
Mitt Romney has volunteers who are lobbiests, but they are not paid staff, like a number of other candidates, including McCain.
In fact, McCain got stenography when he said that tathat tax cuts always raise revenues (not true since Kennedy lowered the max marginal rate from over 90% to 70%), but The New Republic, that bastion of fabulists from Glass to Shalit to Siegel, has to call out the New York Times on its stenography.
It will be very interesting to see what will happen if Hillary and Mitt win, how on earth will the kule kidz make up their minds when they hate both candidates?
Maybe they’ll all become cheerleaders for Mr. Bloomberg.
The theory has been that the DGA contract would form the basis of pattern bargaining (uniform terms across the industry), bringing an end to the writers guild strike.
However, the DGA is also known as being a soft touch, and the contract has not be approved by the members, many of whom are also in the WGA, and so the quality of the contract and its meaning to the writers is unclear.
John Edwards is apparently a figure of the voters’ imagination, though it appears that NY Times Ombudsman Public Editor Clark Hoyt shares the public’s delusion.
I could make some sort of pithy statement about corporate media, but instead, I’ll just call the coverage wankeriffic.
And as Harry Truman once said, “Given the choice between a Republican and someone who acts like one, the people will vote for the real Republican every time.”
His talk to Reno Gazette editorial board exemplifies this.
Barack Obama and I are alike in some significant ways.
We are nearly the same age, he was born in 1961, and I was born in 1962, and we both missed the 1960s, we was in Hawaii and Jakarta during the decade, and I was in Fairbanks, Anchorage, and Juneau (though after August 1969, I was in Virginia for a time.
As such, we were in some very real ways separated from the cultural goings on of the 1960s by virtue of geographic separation.
We thus both became politically aware at the same time, though I might have done so earlier, as both my parents were politically involved, and I had a summer without cartoons while my mom watched the Watergate hearing.
For most of my generation, any political awareness came around the time of Jimmy Carter, who was, and is, truth be told, a depressingly sanctimonious downer.*
So there are a lot of people, and I am not one of them, who have some fondness for Reagan, if just because Carter was so depressing.
I remember him running a blatantly racist campaign, and opening up the White House for the personal profit of his friends.
He won by keeping the hostages in Iran until after the election.
In any case, he gave a talk to the Reno Gazette editorial board on Monday, and it was caught on tape for posterity.
In any case, he gave a talk with Here is a transcript of the relevant portion of his talk, (H/T Open Left)
I don’t want to present myself as some sort of singular figure. I think part of what’s different are the times. I do think that for example the 1980 was different. I think Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not. He put us on a fundamentally different path because the country was ready for it. I think they felt like with all the excesses of the 1960s and 1970s
This, of course would be the Voting Rights Act, the Civil Rights Act of 1964, Medicare, the opening of social welfare programs to black and brown people, and to a large degree the elimination of childhood malnutrition in the United States?
Yep, that’s REALLY excessive.
and government had grown and grown but there wasn’t much sense of accountability in terms of how it was operating.
You like how the American people forced the US to withdraw from a wasteful, stupid and useless war?
You mean like how a corrupt and dictatorial President was forced from office because the American people would not tolerate a crook in the White House?
When people like Ronald Reagan refered to the excesses of the 1960s, they mean that they did not want people with your complexion to be able vote in the South, and that Lynching and church bombings were the God given right of the white man.
You think those were excesses?
Well, Ronald Reagan certainly made it explicit that he was running on behalf of people who that that they were.
No, Ronald Reagan didn’t appeal to people’s optimism, he appealed to their petty, small minded bigotry and selfishness. Jimmy Carter told people to tighten their energy belts and act for the good of the country; Ronald Reagan told them they could guzzle gas with impunity and do whatever the hell they wanted. He kicked off his 1980 campaign talking about “state’s rights” in Philadelphia, Mississippi — the site of the murder of three civil rights workers in 1964’s Freedom Summer. He thus put up a welcome sign for “Reagan Democrats,” peeling off white voters who were unhappy with the multi-ethnic coalition within the Democratic Party.
One of his first acts was to fire 11,000 air traffic controllers in 1981 — one of the most devastating union busting moves of the past century. And his vision of deregulation didn’t free the country up for entrepreneurship, it opened it up for the wholesale thievery of the savings & loan crisis. He popularized the notion that all government is bad government and in eight short years put in place the architecture for decades of GOP graft and corruption.
There’s enough hagiography of Reagan on the right, I don’t think Democrats really need to go there.
*I also consider him a war criminal, along with Zbigniew Brezinski, for quite literally buying a civil war in Afghanistan just to screw with the Soviets.
In a statement, Boeing Commercial Airplanes chief executive Scott Carson says “we continue to be challenged by start-up issues in our factory and in our extended global supply chain”.
Well, duh.
It was originally supposed to have a first flight in August of 2007, and now they are saying may or June of 2008.
Of interest is the fact that the press, particularly the American press is not running around saying, “the sky is falling”, as they did with the roughly 18 month delay on the A380.
Part of the reason is that it’s easier for the press to find some Eurocrat tied into Airbus to wring his hands publicly, not surprising given its origins as a state sponsored enterprise, and part of it, at least in the US is a cultural bias against Airbus because of its state origins (kind of necessary, everything in Europe had gotten the %$#@ bombed out of it 25 years prior).
I came away with one conclusion, that listening to the inane and hacktackular questions of Brian Williams and Tim Russert was on par with being waterboarded. I thought that Natalie Morales was a bit better, but I have less experience with here, and in the case of TV Newsies, familiarity breeds contempt.
I thought that it was a wash, though Clinton nailing Obaba on his vote for the Bush/Cheney energy bill (WTF!) was a good zinger.
John Edwards seemed a bit more energetic. Obama and Clinton seemed a bit tired.
The best questions were asked by the candidates by each other, but that was a very low bar.
I’m not sure of the legalities, but he was offered a spot, and then it was withdrawn, and he had made arrangements to be in Las Vegas for the debates, so I think having him in the debate is the right thing to do.
It would appear that the judge made his ruling based on some sort of implied contract, and the public service requirement for broadcasters, but I’m completely unequipped to evaluate the law here, I’m an engineer, not a lawyer, dammit*!
Accountability sucks*, doesn’t it Mr. Rosenthal. Spencer Ackerman notes that NY Times Reporter Rick Bragg was suspended, and then resigned after he did something similar.
At the very least, Ms. Dowd needs to explain to her readers.
*And it is the accountability that blogs occasionally force on “real journalists”, that gives them much of their value, and engenders the hostility of the “Kook Kidz”.
As to why this is coming home, Talking Points Memo has the definitive word, “Here’s what one former colleague of Solomon’s said last week: ‘I worked [X] years in the same office as Solomon, sometimes with him. The consensus: he’s lazy, and takes hit jobs handed him on a platter by opps research teams (and anyone will do.) And doesn’t do much to clean it up. I also know one of his fave and frequent sources is Barbara Comstock, former DOJ spxwoman and GOP attack dog.'”
In the Washington Post announcement of this move, he currently works for the Post, Mr. Solomon, ever the complete tool, says, “It’s going to be about being fair and balanced“. Straight out of Fox News.
The angry Clinton haters in the press corps suffer from the same flat learning curve as Wile E. Coyote. They don’t understand why their Acme arsenal never quite does the job, and instead often leaves them with grimy faces and aching heads.
The problem is that these guys behave as if they are a high school clique, and the journalistic community has very little concern about accuracy.
A few years ago, he said, some drivers talked about organizing, but the idea went nowhere. The problem, he went on, is that on the north side, 80 to 90 percent of the drivers are in the United States illegally. I have no idea if that number’s accurate, but I believed him when he said he’s one of them. “When you are illegal in this country you have to be patient,” the English-speaking driver explained. “So I think that is one of the reasons—they need the money, they have no papers to work, that’s why they keep quiet. They know if they complain they will get fired. We think the main Tribune, they don’t know nothing about this.”
Apparently they don’t. Tribune spokesman Michael Dizon e-mailed me that “it is against Chicago Tribune policy to publicly discuss how fees for delivery services are negotiated.” But he added, “Our company does not hire undocumented workers to deliver our newspapers. Tribune Company contracts with independent businesses to deliver products. In turn each independent contractor enters into his or her own contracts with sub-contractors to perform delivery results.”
This is why the US is so schizophrenic on illegal aliens. The powers that be use them to drive down wages and prevent union activities, which they like (and any guest worker program has the same effect), but the average American understands that it’s against the law.
That’s why, when I made some proposals about deterring illegal immigration, they focused on the demand from employers.
