I found it telling that this "wealth creator" used entrepreneurs as his example of wealth creators,
rather than bankers and traders (he's from a trading/PE/VC firm).
Right. He makes many good points, but many of his assumptions are flawed. He uses a few examples and anecdotes to paint a picture of the wealthy exclusively as bootstrapping individuals that innovate for consumers and create massive value. While this is certainly can be case, the reality is that the majority are quite different. Look at the wealthiest individuals and most profitable businesses, they are often not creators of value, but manipulators of markets and mediators of commodities. Energy Companies, Corporate Aggregators, and Financial Services. If we are too blind to see that these companies funnel huge amounts of money away from more efficient uses, perpetuate monopolies, and destroy true free market innovation, then we will pay the price.
While his criticisms of Marxism were on the spot, they simply summarize how Marxist ideas of capturing the "means of production" by force are outdated in knowledge economies. Marx was right in the end though: look at the economic success of countries that have converted to knowledge economies, as the workers own their means of production, and often are in the position of being able to demand excellent working conditions and payment in exchange for their labor.
Economic infrastructure and energy are essential services, though. Energy in particular. You'd expect energy companies to be rich, because energy is a necessary part of nearly all the wealth created in any economy (knowledge or industrial).
I am not saying these industries are not essential and don't deserve the revenues they earn, but the concentration of PROFIT they generate is telling. The margins of players in competitive industries in healthy markets run thin because prices are low and anything left is re-invested into R&D. Just look at the profits Microsoft enjoys -- purely because of their stranglehold on the market, which we'd all agree is bad for the consumer. The concentration of capital and resources that Microsoft retains and mis-manages is staggering. In a true free market, a more efficient, well-managed competitor would have undercut them long ago.
Firefox was killing Microsoft's browser monopoly, without any sort of government intervention, and against enormous inertia.
Not all markets are efficient, but some are ripe for the taking by an entrepreneur.
Think about all the firms that used windows. If they become less efficient due to using windows, than they will eventually be out-competed by firms that use Linux or MacOS over time, all else being equal.
Firefox and Internet Explorer aren't products that sell on a market though. There is zero cost to the consumer for using one or the other, so competition is exclusively on features. Open source is sort of post-capitalist in a way.
Often markets that suffer from stagnation and seem ripe for the taking by an entrepreneur are that way for a reason: monopoly, government policy favoring large corporations, conditions created by the dominant players, etc.
These firms use Windows because of the tremendous cost associated with switching, which is a key strategy of Microsoft. Software is one of the few industries where products are designed specifically to create lock-in scenarios, and it is accepted by the mainstream.
These firms use Windows because of the tremendous cost associated with switching
It generally does not alway means that new firms will use them. If incumbent are bureaucratic and slow enough to the point of negating the regulations in place, than it might be easier for a linux using firm to enter the market.
If the regulations is skewed enough, than firms that used windows may in fact not died at all. Even though I know that the regulations is very skewed, I still like to think that the merit of other operating systems will win out in the long run, even if that long run is a really long time.
Wow, a super-shady, leveraged buyout and commodities markets manipulation firm with a founder who was associated with the scummiest of junk bond firms _during_ their most criminal of activities, is telling us not to hate pizza restaurant owners and electricians.
The thing is, we weren't disliking them, nor do we. We hate 30:1 longshot bet "investors", market manipulators and corporate raiders. That won't change no matter how flashy your flash splashscreen is.
30:1 longshot bet "investors", you mean like VC's and angels? And corporate raiders? You mean the people who buy and improve the value of existing companies [1]?
I'm really not sure what your criticism of Blackhawk Partners is. Could you elaborate?
[1] Or occasionally shut them down and sell their assets to more productive companies.
Since when do VCs bet 30:1 on anything? If anything it's 1:1, because they can't borrow more money against their fund. That's the whole point behind venture capital - people put money in where tradtional banks {d,w}on't.
I was referring to CDOs and default swaps, you know, the stuff that almost crashed the American economy a couple years back.
>I'm really not sure what your criticism of Blackhawk Partners is. Could you elaborate?
Sure. He's using pizza shops and construction contractors and other working class small businesses as a cover to justify his job of moving rich people's money from one place to another and calling it productivity. In other words, he takes the example of people who, you know, actually provide a product or service to the bulk of Americans as an emotional crutch to justify his firm's greed by pretending that it's largess for Main Street businesses.
And, there's a reason they're called raiders. They don't usually "improve" anything except for their wallet.
And, there's a reason they're called raiders. They don't usually "improve" anything except for their wallet.
Yes, because populist journalists and working folks who lose their jobs because a poorly-performing company gets shut down and sold off piecemeal are great, unbiased sources of truth in such matters.
Sometimes the best thing that can happen to a company is for it to die. If we'd had the balls to let some of our airlines and auto companies and banks die the painful death they deserve, we probably wouldn't have to face the prospect of repeatedly bailing out underperforming companies in those (now heavily-regulated) industries.
I don't particularly mind having poorly performing companies which are worth less than their book value be broken up and sold off for a profit. What I have a lot more trouble with is a stable company being bought in a transaction designed to load it with debt for the tax benefit, deliberately run into the ground, and then flipped around for profit.
To name a random example, Sealy and Serta used to make good mattresses before they got bought and destroyed by private equity. And a lot of people's local community hospitals used to be decent and are now crap because private equity saw a profit opportunity.
Yes, the reason is that they are outsiders coming in against the wishes of insiders. Typically their goal is to increase shareholder value at the expense of entrenched interests (e.g., management which cares more about their paycheck than about growing the company).
Blackhawk Partners is in private equity. The short version is that they are the scum of the finance world.
Private equity companies perform leveraged buyouts. By structure these deals are high risk for everyone except the private equity firm, and the profit potential mostly comes from the fact that companies get a tax deduction for interest owed. Therefore the huge debt from the buyout creates a tax write-off that can then go as dividends to the private equity fund. (As much as they claim to despise government regulation, they derive their profits from exploiting a tax loophole.)
These are the same folks who were called the junk bond kings in the 1980s. They went crazy, their funds crashed (though because of the financial structure the junk bond kings made a ton of cash), and the investors in their funds lost money. You may have heard of the S&L crisis? Yeah, the savings and loans institutions had invested in the junk bond funds in a big way, and when it collapsed the taxpayer stepped in and lost about $124 billion. (Unlike most of the TARP funds, the government didn't get this money back.)
Since then they've changed their name, and in the last period of easy credit they went even crazier. You're going to hear a lot about them in the next 3 years. You see, most of their deals have principle due back in 2011 or 2012, most of the companies they bought don't have the cash, and this is going to result in a lot of bad credit. Oh, and this time around the investors in their funds who are likely to lose their shirts are mostly government pension funds.
So we're going to see a wave of bankruptcies (and people losing jobs from that), a credit crunch, and more financial problems on overstretched governments at all levels. It is at least an order of magnitude bigger than the S&L crisis, and I wouldn't be surprised if the combination turns out to be bigger than the subprime crisis.
But never worry. The way the deals are structured, the private equity fund only puts up 20% of the cash (the other 80% is born by the company purchased), and of that 20% only about 20% is the actual money from the private equity folks. Conveniently they get their 4% back almost immediately in management fees and closing costs, so no matter how badly the rest of us get hurt, they've made their fortune.
If you know what private equity is, you'd know that this destroys the fundamental assumption of the article that the person talking made money by creating value. No. The person talking made money by structuring deals that left him with profit, everyone else with risk, plenty of people unemployed, and the US government without tax revenue due to a silly tax loophole.
As for the argument itself, it is reasonable when it applies to people who actually made money by creating value. But that set of rich people doesn't include the author of that piece.
Umm, do you know what private equity is? Last time I checked, private equity included any form of investment in private companies not traded on public exchanges. This would include venture capital, angel investment, growth capital, etc. I consider that to be creating value. And as for this specific firm, I can't find a ton of info on them, and I can't tell from your comments whether you know a lot about them specifically, or if you're lumping them in with all other private equity folks. I'd like to know more before assuming they're the "scum of the earth" and dismissing their argument.
You're right. There are different kinds of private equity. And some aren't nearly as bad as some of the others.
If you want to know more about the author of this article, look at http://en.wikipedia.org/wiki/Ziad_K_Abdelnour. His career has focused on investment banking, high yield bonds (nice name for junk bonds), and distressed debt (buying up the debt of failing companies, taking them over for not paying, restructuring them, then relaunching). He learned the private equity business in the 80s, which he finished at Drexel. That was the heart of the junk bond disaster, it was the company that made Michael Milken famous. At Blackhawk Partners he has been focusing on distressed debt.
In short, he doesn't look like the nice kind of private equity.
To the contrary, I think that distressed debt is a great part of the private equity business. The process you describe as "buying up the debt of failing companies, taking them over for not paying, restructuring them, then relaunching" is ridiculously valuable and necessary for a functioning economy. What's your preferred alternative to the problem of failing companies?
I agree that there is a necessary job there, but a lot of the problem they are "solving" is artificially created.
You've got to look where they fit in the financial ecosystem. First one set of private equity folks come along, structure a deal, and leave a previously healthy company saddled with lots of debt. (Private equity folks make guaranteed money on the deal, everyone else bears risk.) If that company proves unable to handle it, the distressed debt folks come along, buy up the debt at a fraction of the price, take control of the company cheaply, then forgive much of the debt they bought. The now healthier company gets flipped back to the same private equity folks who ruined it in the first place who, as is their standard operating procedure, load it up with debt again.
It is a magic cycle. Every iteration brings more pain and misery to the people working there, making the product worse, slowly bleeding the consumer base, but throwing off more profit for the private equity folks. And the sad thing is that the poor company didn't need to go through any of this. It started off fine and would be in better shape if the whole process hadn't ever started.
I argued against it and took a shot at him, as is my wont.
But, don't you see that his hiding behind people who _actually_ make things and/or provide product or service to the American people is craven and cowardly?
He essentially gathers wealthy people's money and, by any means within or without the rule of law (if you dispute that, why would they tout their secrecy so proudly? For dramatic effect?), tries to get them more money. How is that at all "Google"? How is that even remotely the same as what we're doing here or what Brin or Woz or the Pizza shop does? Just because they are _in_ commodities TRADING doesn't mean they are down in the dirt. Their hands aren't the ones sooty at the end of the day. They are market manipulators, not distributors. Middle men. And, they justify their very existence in that rambling diatribe behind the apron of labor. It's disingenuous.
I think it pretty much went downhill from where he stated that the wealthy aren't the intellectual elite and then used Wosniak, Gates, Allen, Larry, and Sergey to make his point. I guess Berkeley, Harvard, and Stanford are chump schools now? Boy do I feel bad about my rejections...
I'm a greedy, conservative capitalist and I still thought this essay was garbage.
First, it totally failed to address the question of wealth received through means other than entrepreneurship: What about athletes, movie stars, heirs and heiresses, etc?
Second, it posits that owner-CEO's will always grow the value of their companies, ignoring that many CEO's with significant shareholdings in their companies have nevertheless plundered their companies for their own benefit.
Third, it claims that the rich got that way by doing work other people don't want to do, by which logic the average garbage man should be rich since he is doing work no one wants to do either.
Fourth, it lumps short sellers in with various other parasites trying to feast on the wealthy. But if good entrepreneurs will always (always!) grow the value of their companies, why should they fear short sellers? If the company goes up in value, the shorts will get taken to the cleaners. It sounds like the author resents the fact that short sellers perform a valuable function in exposing the overvaluation of companies that aren't doing as good a job as other people might think.
Simply put, this is a poorly-reasoned essay with little to add to the debate about taxing the rich.
> it totally failed to address the question of wealth received through means other than entrepreneurship
These people receive wealth. They do not necessarily generate it. Athletes and movie stars are certainly talented, but entertainment is a place to push excess wealth and not necessarily a source of it.
> it claims that the rich got that way by doing work other people don't want to do, by which logic the average garbage man should be rich since he is doing work no one wants to do either.
No, doing disdainful work is not sufficient for being wealthy. Nor is it necessary. He is saying that it is common, though.
> Fourth, it lumps short sellers in with various other parasites trying to feast on the wealthy. But if good entrepreneurs will always (always!) grow the value of their companies, why should they fear short sellers?
Hm, I missed this part in the essay. Most businessmen recognize the value of short sellers in the marketplace, even if it makes their job harder. It's kind of like competition in that way.
>These people receive wealth. They do not necessarily generate it. Athletes and movie stars are certainly talented, but entertainment is a place to push excess wealth and not necessarily a source of it.
Given that the story is a defense of people who generate wealth, I am not surprised that he did not focus on people who do not generate wealth. I am not sure it is a failing, either.
[one of the comments on the blog, in its entirety]
“Oliver Stone, Carl Marx you insolent impertinent “putzes”, your character Gordon Gekko is a putz! It’s not greed that drives this nation, or the “doers”, or the titans of this great nation; it’s Ambition, incentive, and the pursuit of The American Dream!!….. (Not the European Dream, the Soviet Dream, ….the Socialist Dream,……or the “Obama Dream” ….it is THE AMERICAN DREAM!). ….Work ethic, hard work and taking risks for the enjoyment of the fruits it produces. …And it will be shared with whomever the producers are willing to share it with. You don’t decide with whom I share my prosperity (success)…………I DO! You have every right to pursue happiness and wealth. Be not ashamed of doing so. Your founding Fathers penned it in permanent ink: “…..We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness….” (The unanimous Declaration of the thirteen united States of America -In Congress, July 4, 1776) I am willing to pledge all I have to preserve this promise, this hope, this Dream. I will “not go quietly into the night”! The government will not take these liberties away without a fight to the end. As long as there is just one shred of a chance for the “pursuit” of happiness, The American Dream is alive and I will give my full measure, if necessary, to preserve Her for me and my family. Be “resolute”. Pass this on now or risk the fate of working the rest of your life to come out from under the tyranny of socialism, the strong arm of government and the suppression imposed on you by the "Statists".
Is this... spam? A Markov-chain generated comment? WTF.
I've really gotta quit reading comments on random websites.
Shutup has greatly reduced the amount of time I spend getting sucked into reading what are generally bad comments. I also suspect that my general angst level is down, as a bonus.
"There is a great deal of historical revisionism happening here. Liberals and progressives don't hate or even begrudge wealthy people. We do have a problem with crooks who use our retirement to gamble on casino derivatives, and then expect the federal government to bail them out (there is an example of socialism for you--privatizing the profit and socializing the risk). Recent wall street action and other corporate maleficent beg the question of Ziad, does wealth accumulation really indicate moral integrity? Does that suggest that people who aren’t rich, don’t have moral integrity? I don’t think rich people necessarily lack moral integrity, but I don’t think it is an indication of it either. There are other great attempts to revise history by the far right especially in an attempt to make Hoover into a progressive, so conservatives don't have to take the blame for the great depression. Hoover was against regulation. The favorite phrase of the Republican presidents in the 1920s was "What is good for GM is good for America." This is what led to the great depression. Hoover did implement some tariffs after the depression hit, but that was a drop in the bucket compared to what came after FDR. The GDP drop from the great depression hit a few months after FDR took office. It skyrocketed up over the next several years--unemployment went down by half by 1937. Questions for you who see class envy from those espousing liberal policies? If redistribution is so bad then why, since the income tax was passed (1916), has the US built the strongest economy and middle class known to the world? If Keynesian economic is not successful, then why from 1933 to 1980 (Nixon said "we are Keynesians now) did the US experience explosive economic growth? If redistribution and Keynesian economics are so unfair to entrepreneurs, why was has there always been a thriving wealthy class since the US inception even during the New Deal and Great Society era? Why, if deregulation is so troublesome, did we not have banking and financial calamities like the Savings and Loan scandal, stock market crashes, and the derivative blowup from the time of FDR until Ronald Reagan come along and dismantled the regulatory infrastructure? And my favorite historical revision attempt: Why, if lowering taxes on the wealthy create more revenue, did Clinton raising of taxes increase revenues and create a surplus? Why when Bush lowered taxes on the rich, did revenues nose dive for six years and turn a surplus to deficit?"
I actually found it to be an inspiring read about why higher taxes on the rich may be a bad idea (ie. it's not likely that the government would do a better job spending the money).
However a glaring omission (one of many I suppose) is the chilling effect that wealth-holders can have on innovation by wielding legal and political power. I don't have a problem with lowering taxes on the rich, but first lets see what we can do about insulating the political process from monied interests.
John Ralston Saul's book Unconscious Civilization (a kind of primer on his theories I think, which one would read before they tackle Voltaire's Bastards) does a wonderful job of elaborating this point, anyone interested in an article such as this would do well to read the book,
Capitalism - real capitalism, not the cowardice we see masquarading as capitalism a lot of the time - is fine, corporatism and the power we give corps. by surrendring to them is what is dismantling democracy and individual liberty. (And Ralston Saul posits that this is an age-old battle, whether it be corps. in their modern form, or as in the Catholic Church).
what we can do about insulating the political process from monied interests.
Absolutely nothing. Money is power. It's nothing more and nothing less than a societywide promise that people will give you things and do things for you.
Trying to prevent the imbalance in money-power from being reflected to a large degree in political power is ultimately futile. Any rules you make will have loopholes and workarounds for those in possession of enough money-power.
Yes money is power, but government is a cultural institution. We already have ethical and legal rules against corruption, they just need to be strengthened at a societal level.
Saying 'absolutely nothing' can be done is a defeatist attitude. It's fine for money to be used for influence within the rules of the system, but when it's used to fix the rules, that goes against everyone's interests. It also behooves the rich to acknowledge the value of a fair playing field since consolidating too much power often leads to violent revolution (ie. instant nullification of the power-value of money by the masses).
46 comments
[ 2.8 ms ] story [ 120 ms ] threadWhile his criticisms of Marxism were on the spot, they simply summarize how Marxist ideas of capturing the "means of production" by force are outdated in knowledge economies. Marx was right in the end though: look at the economic success of countries that have converted to knowledge economies, as the workers own their means of production, and often are in the position of being able to demand excellent working conditions and payment in exchange for their labor.
Not all markets are efficient, but some are ripe for the taking by an entrepreneur.
Think about all the firms that used windows. If they become less efficient due to using windows, than they will eventually be out-competed by firms that use Linux or MacOS over time, all else being equal.
Often markets that suffer from stagnation and seem ripe for the taking by an entrepreneur are that way for a reason: monopoly, government policy favoring large corporations, conditions created by the dominant players, etc.
These firms use Windows because of the tremendous cost associated with switching, which is a key strategy of Microsoft. Software is one of the few industries where products are designed specifically to create lock-in scenarios, and it is accepted by the mainstream.
It generally does not alway means that new firms will use them. If incumbent are bureaucratic and slow enough to the point of negating the regulations in place, than it might be easier for a linux using firm to enter the market.
If the regulations is skewed enough, than firms that used windows may in fact not died at all. Even though I know that the regulations is very skewed, I still like to think that the merit of other operating systems will win out in the long run, even if that long run is a really long time.
The thing is, we weren't disliking them, nor do we. We hate 30:1 longshot bet "investors", market manipulators and corporate raiders. That won't change no matter how flashy your flash splashscreen is.
I'm really not sure what your criticism of Blackhawk Partners is. Could you elaborate?
[1] Or occasionally shut them down and sell their assets to more productive companies.
Since when do VCs bet 30:1 on anything? If anything it's 1:1, because they can't borrow more money against their fund. That's the whole point behind venture capital - people put money in where tradtional banks {d,w}on't.
I was referring to CDOs and default swaps, you know, the stuff that almost crashed the American economy a couple years back.
>I'm really not sure what your criticism of Blackhawk Partners is. Could you elaborate?
Sure. He's using pizza shops and construction contractors and other working class small businesses as a cover to justify his job of moving rich people's money from one place to another and calling it productivity. In other words, he takes the example of people who, you know, actually provide a product or service to the bulk of Americans as an emotional crutch to justify his firm's greed by pretending that it's largess for Main Street businesses.
And, there's a reason they're called raiders. They don't usually "improve" anything except for their wallet.
Yes, because populist journalists and working folks who lose their jobs because a poorly-performing company gets shut down and sold off piecemeal are great, unbiased sources of truth in such matters.
Sometimes the best thing that can happen to a company is for it to die. If we'd had the balls to let some of our airlines and auto companies and banks die the painful death they deserve, we probably wouldn't have to face the prospect of repeatedly bailing out underperforming companies in those (now heavily-regulated) industries.
To name a random example, Sealy and Serta used to make good mattresses before they got bought and destroyed by private equity. And a lot of people's local community hospitals used to be decent and are now crap because private equity saw a profit opportunity.
In any case, why do you believe Blackhawk trades in CDO's and CDS? Near as I can tell, they do mostly private equity, also some commodities.
http://blackhawkpartners.com/Portfolio.aspx
And, there's a reason they're called raiders.
Yes, the reason is that they are outsiders coming in against the wishes of insiders. Typically their goal is to increase shareholder value at the expense of entrenched interests (e.g., management which cares more about their paycheck than about growing the company).
Private equity companies perform leveraged buyouts. By structure these deals are high risk for everyone except the private equity firm, and the profit potential mostly comes from the fact that companies get a tax deduction for interest owed. Therefore the huge debt from the buyout creates a tax write-off that can then go as dividends to the private equity fund. (As much as they claim to despise government regulation, they derive their profits from exploiting a tax loophole.)
These are the same folks who were called the junk bond kings in the 1980s. They went crazy, their funds crashed (though because of the financial structure the junk bond kings made a ton of cash), and the investors in their funds lost money. You may have heard of the S&L crisis? Yeah, the savings and loans institutions had invested in the junk bond funds in a big way, and when it collapsed the taxpayer stepped in and lost about $124 billion. (Unlike most of the TARP funds, the government didn't get this money back.)
Since then they've changed their name, and in the last period of easy credit they went even crazier. You're going to hear a lot about them in the next 3 years. You see, most of their deals have principle due back in 2011 or 2012, most of the companies they bought don't have the cash, and this is going to result in a lot of bad credit. Oh, and this time around the investors in their funds who are likely to lose their shirts are mostly government pension funds.
So we're going to see a wave of bankruptcies (and people losing jobs from that), a credit crunch, and more financial problems on overstretched governments at all levels. It is at least an order of magnitude bigger than the S&L crisis, and I wouldn't be surprised if the combination turns out to be bigger than the subprime crisis.
But never worry. The way the deals are structured, the private equity fund only puts up 20% of the cash (the other 80% is born by the company purchased), and of that 20% only about 20% is the actual money from the private equity folks. Conveniently they get their 4% back almost immediately in management fees and closing costs, so no matter how badly the rest of us get hurt, they've made their fortune.
As for the argument itself, it is reasonable when it applies to people who actually made money by creating value. But that set of rich people doesn't include the author of that piece.
If you want to know more about the author of this article, look at http://en.wikipedia.org/wiki/Ziad_K_Abdelnour. His career has focused on investment banking, high yield bonds (nice name for junk bonds), and distressed debt (buying up the debt of failing companies, taking them over for not paying, restructuring them, then relaunching). He learned the private equity business in the 80s, which he finished at Drexel. That was the heart of the junk bond disaster, it was the company that made Michael Milken famous. At Blackhawk Partners he has been focusing on distressed debt.
In short, he doesn't look like the nice kind of private equity.
You've got to look where they fit in the financial ecosystem. First one set of private equity folks come along, structure a deal, and leave a previously healthy company saddled with lots of debt. (Private equity folks make guaranteed money on the deal, everyone else bears risk.) If that company proves unable to handle it, the distressed debt folks come along, buy up the debt at a fraction of the price, take control of the company cheaply, then forgive much of the debt they bought. The now healthier company gets flipped back to the same private equity folks who ruined it in the first place who, as is their standard operating procedure, load it up with debt again.
It is a magic cycle. Every iteration brings more pain and misery to the people working there, making the product worse, slowly bleeding the consumer base, but throwing off more profit for the private equity folks. And the sad thing is that the poor company didn't need to go through any of this. It started off fine and would be in better shape if the whole process hadn't ever started.
In interviews years later, the owners come to regret it. But at the time it looks like a good idea.
But, don't you see that his hiding behind people who _actually_ make things and/or provide product or service to the American people is craven and cowardly?
He essentially gathers wealthy people's money and, by any means within or without the rule of law (if you dispute that, why would they tout their secrecy so proudly? For dramatic effect?), tries to get them more money. How is that at all "Google"? How is that even remotely the same as what we're doing here or what Brin or Woz or the Pizza shop does? Just because they are _in_ commodities TRADING doesn't mean they are down in the dirt. Their hands aren't the ones sooty at the end of the day. They are market manipulators, not distributors. Middle men. And, they justify their very existence in that rambling diatribe behind the apron of labor. It's disingenuous.
First, it totally failed to address the question of wealth received through means other than entrepreneurship: What about athletes, movie stars, heirs and heiresses, etc?
Second, it posits that owner-CEO's will always grow the value of their companies, ignoring that many CEO's with significant shareholdings in their companies have nevertheless plundered their companies for their own benefit.
Third, it claims that the rich got that way by doing work other people don't want to do, by which logic the average garbage man should be rich since he is doing work no one wants to do either.
Fourth, it lumps short sellers in with various other parasites trying to feast on the wealthy. But if good entrepreneurs will always (always!) grow the value of their companies, why should they fear short sellers? If the company goes up in value, the shorts will get taken to the cleaners. It sounds like the author resents the fact that short sellers perform a valuable function in exposing the overvaluation of companies that aren't doing as good a job as other people might think.
Simply put, this is a poorly-reasoned essay with little to add to the debate about taxing the rich.
These people receive wealth. They do not necessarily generate it. Athletes and movie stars are certainly talented, but entertainment is a place to push excess wealth and not necessarily a source of it.
> it claims that the rich got that way by doing work other people don't want to do, by which logic the average garbage man should be rich since he is doing work no one wants to do either.
No, doing disdainful work is not sufficient for being wealthy. Nor is it necessary. He is saying that it is common, though.
> Fourth, it lumps short sellers in with various other parasites trying to feast on the wealthy. But if good entrepreneurs will always (always!) grow the value of their companies, why should they fear short sellers?
Hm, I missed this part in the essay. Most businessmen recognize the value of short sellers in the marketplace, even if it makes their job harder. It's kind of like competition in that way.
That is my point.
“Oliver Stone, Carl Marx you insolent impertinent “putzes”, your character Gordon Gekko is a putz! It’s not greed that drives this nation, or the “doers”, or the titans of this great nation; it’s Ambition, incentive, and the pursuit of The American Dream!!….. (Not the European Dream, the Soviet Dream, ….the Socialist Dream,……or the “Obama Dream” ….it is THE AMERICAN DREAM!). ….Work ethic, hard work and taking risks for the enjoyment of the fruits it produces. …And it will be shared with whomever the producers are willing to share it with. You don’t decide with whom I share my prosperity (success)…………I DO! You have every right to pursue happiness and wealth. Be not ashamed of doing so. Your founding Fathers penned it in permanent ink: “…..We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness….” (The unanimous Declaration of the thirteen united States of America -In Congress, July 4, 1776) I am willing to pledge all I have to preserve this promise, this hope, this Dream. I will “not go quietly into the night”! The government will not take these liberties away without a fight to the end. As long as there is just one shred of a chance for the “pursuit” of happiness, The American Dream is alive and I will give my full measure, if necessary, to preserve Her for me and my family. Be “resolute”. Pass this on now or risk the fate of working the rest of your life to come out from under the tyranny of socialism, the strong arm of government and the suppression imposed on you by the "Statists".
Is this... spam? A Markov-chain generated comment? WTF.
I've really gotta quit reading comments on random websites.
/me tries
NOOOooooo! It doesn't work on that site! >.< Thanks anyway though, I intend to get use out of it :)
you could always add #ctl00_ContentPlaceHolder1_pComments to the css, it's a shame css can't do wildcards
Would it be so much to ask for basic regex on selectors? Sure, it means abuse is possible... but no worse than allowing JS.
However a glaring omission (one of many I suppose) is the chilling effect that wealth-holders can have on innovation by wielding legal and political power. I don't have a problem with lowering taxes on the rich, but first lets see what we can do about insulating the political process from monied interests.
Capitalism - real capitalism, not the cowardice we see masquarading as capitalism a lot of the time - is fine, corporatism and the power we give corps. by surrendring to them is what is dismantling democracy and individual liberty. (And Ralston Saul posits that this is an age-old battle, whether it be corps. in their modern form, or as in the Catholic Church).
Absolutely nothing. Money is power. It's nothing more and nothing less than a societywide promise that people will give you things and do things for you.
Trying to prevent the imbalance in money-power from being reflected to a large degree in political power is ultimately futile. Any rules you make will have loopholes and workarounds for those in possession of enough money-power.
Saying 'absolutely nothing' can be done is a defeatist attitude. It's fine for money to be used for influence within the rules of the system, but when it's used to fix the rules, that goes against everyone's interests. It also behooves the rich to acknowledge the value of a fair playing field since consolidating too much power often leads to violent revolution (ie. instant nullification of the power-value of money by the masses).