where's the love?

by russell

This had me in stitches.  Then, I was profoundly depressed for a couple of minutes.  Then, I scratched my head for about a half hour.  Then, I laughed some more.

My favorite bit:

Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. 

The folks in the dining room of the St. Andrews Country Club in Boca being, of course, a representative sample of the population.  A veritable den of everymen and -women!

Q: Why doesn't Tom Lehrer perform publicly anymore?

A: Because, nowadays, satire is redundant. 

Comments

[hairshirthedonist]

Human psychology being what it is, it's not surpising that some people who live in rarified environments can be clueless about the broader realities that exist outside those rarified environments. But that doesn't make those people any less clueless.

In any case, the poor devils will get by somehow, despite the hardships they're now facing.

(Monica Seles???)

[Countme-In]

I think Jacob Marley has a membership at St. Andrews.

TARP purchased the gold-plated toilet appointments in the men's room at the club, wherein Paulson's, Cooperman's, et al exquisite scat is gathered and packaged for sale to rubes worldwide.

Ah, yes, Boca Raton, where bucket shops full of reptiles would slither over each other years ago to call unsuspecting small investors at the dinner hour on their 800 landlines trying to unload funky penny-stock paper and submerged Glengarry Glenross real estate.

Lotta tip sheets come outta there too. Seems to me a lot of late-night lying tiny little ads pitchman use it as a backdrop as well. Let me show you how to slice, dice, and pulverize your "portfolio".

Now, of course, all of the world is a bucket shop surrounded by ruin, thanks to Phil Gramm.

I'm not a basher of the rich -- I'd like to be rich and pay, say, 4.6% more in marginal taxes on every dollar I earn over $200,000 or thereabouts and maybe more over a million clams.

I'd still fork over my green fees at St. Andrews and I certainly wouldn't skimp on tips to my caddies as a way of distributing a little trickle-down Galtian vengeance among the help.

And at this point I would usually cite the history of tax rates laying out the 91% marginal levels (too high, yup) from many years ago and ask how it is that the U.S. fared so well for all those decades, but ....

.... when plutocrats winge about such small numbers, well ... just f**k it, which I think is Tom Lehrer's point of view too.

I'm reading Naomi Klein's "Shock Doctrine" at the moment and I was struck by the fact that the University of Chicago-inspired murderers in Chile, Bolivia, Argentina, etc, when they weren't outright butchering the innocent as part of the push for "economic reform", would round up labor union leaders and other troublemakers and send them to armed prison camps in the jungle to get them out of the way as the Milton Friedman economic enemas were carried out.

I'm leaning toward a reverse shock doctrine in this country, but rather than gathering all of these jagoffs together in one place and have them whine about the accomodations and the uniforms, it would be cheaper to transport the barbed wire and armed security to places like St. Andrews (you could seal the joint in barbed wire and be home before Cooperman et al finished the first nine), the economics building at the University of Chicago, FOX News headquarters, the U.S. House of Representatives, various think tanks, etc. and begin some in situ shock indoctrination as soon as possible.

Cooperman is so put-upon that he can afford only the whites of the eggs in his omelet, presumably putting the yolks away for a rainy day.

It may get so bad under Vladmir Saddam Obama that Cooperman will order the omelet and ask the chef to hold the eggs all together.

Merry Christmas, all and good will to some men and women.

To quote Christopher Hitchens, who could probably finish off all the Scotch in the drink caddy's cart by the third hole, regarding Jerry Falwell, if you gave Leon Cooperman an enema, what was left of him could fit in a matchbox.

[Slartibartfast]

Where is the love?

[Ugh]

I read that article yesterday and had to make sure that it wasn't written by The Onion. How hard is it to be humble when you're worth 8, or 9, or 10 figures? Or to at least mouth some platitudes before trying to defend yourself? Or hire some media consultants to ensure that you're not confirming everything the "imbeciles" think about you?

That said, the article does provide a great deal of insight into the mindset of a certain segment of the financial elite.

[Rob in CT]

Please, please, please keep whining! Oh please oh please oh please!

[Slartibartfast]

If you don't like that, I say there's something seriously wrong with you. RIP Donny Hathaway.

[bobbyp]

"You’ll get more out of me,” the billionaire said, “if you treat me with respect.”

If asked this question by a lowly worker, what would this clown reply?

[hairshirthedonist]

I'm reminded of a few scenes from Roger and Me.

[russell]

If you don't like that, I say there's something seriously wrong with you.

Seconded.

[Ugh]

Adding: it would be nice if there were some objective measure of who are the "job creators," but there doesn't seem to be, and what all but one of those quoted in the article seem to assume is that because they're "successful," which is defined to mean "I've made a lot of money," then they are the job creators.

Now, maybe that's the best proxy measure we have in general, but specifically, what evidence is there that Jamie Dimon ("Jamie Dimon's father, Theodore Dimon, was an Executive Vice President at American Express. The younger Dimon came to [Sanford] Weill's attention when Theodore passed along an essay that Jamie had written to him" per wiki) is a better job creator than whoever would be in charge of JP Morgan in his absence? Or, even, Warren Buffet, who seems to have made a great deal of money for his investors but is there any job creation there?

But Mr. Cooperman is a hero to the Ty Webbs at Bushwood! Hoorah!

[CCDG]

"those quoted in the article seem to assume is that because they're "successful," which is defined to mean "I've made a lot of money," then they are the job creators. "

Not for nothing but the two guys from Home Depot created a bunch of jobs, and (not my favorite guy) Buffett has succesfully invested in lots of companies that vreated a bunch of jobs over a long time.

IMO, the problem is that the majority of these wealthy guys in there 60's and 70's really did create a lot of jobs, over 30 - 40 years. But then what have they done for us lately?

[Laura Koerbeer]

They didn't create jobs out of thin air. The guy who started Home Depot was able to do so becuase other people had jobs which gave them the disposible income which allowed them to buy what Home Depot was sellig which meant that Home Depot had a reason to hire people.

How half the population is at of below the poverty line ad the Republican party wants to make that worse by attackig uiions, and blaming federal and state employees for deficit in order to justify depriving them of their jobs. The majority of Repubican politicains in Cogres also wanted to increase poverty by turning Medicare into a voucher system and by gutting the funding for Medicare. The majority i the House want to dump a thousand dollar payroll tax on what's left of the middle class.

Which means that the 98% will have, if the Repubicvas have their way, even less money to spend, which means the so-called creators will not be creating jobs, there being such a dimininished market for their products.

What it amounts to is the real job creators are people who support state and federal spending that directly creates jobs such as the Chrysler bailout or the interstate highspeed rail system.

Tax the rich. They onloyu create jobs if the rest of us have spending money.

[hairshirthedonist]

And whether they create jobs or not, the question is what level of taxation is sufficient, yet will not damage job creation. I personally don't care if my well paying and rewarding job is created by Home Depot or the government. I do care that resources are being put to reasonably good use.

With that, are these guys suggesting that they wouldn't invest (thereby supposedly creating jobs) if capital gains taxes were a bit higher or marginal income taxes a bit more progressive? Will they all take vows of poverty if estate taxes are raised?

[byomtov]

the two guys from Home Depot created a bunch of jobs,

Did they? Maybe, but I'd like to see the numbers, including the number of small hardware stores driven out of business by Home Depot.

Now, maybe that's capitalism at work, and we are all better off because of Home Depot. OK. But that doesn't imply that the company is a net job creator. Indeed, given that it, and Lowe's, have substantially lower costs than Joe's Hardware, it might well be a job destroyer.

Using fewer workers to deliver the same goods or services is a mark of efficiency, of course, but hardly one of "job creation." Just ask Romney.

[bobbyp]

Not for nothing but the two guys from Home Depot created a bunch of jobs

Well, so did the Stalin 5 year plans, Hitler's rearmament, wealthy West Indian plantation owners in the early 1700's. So somehow, calling yourself a 'job creator' strikes me as something of a misnomer, or perhaps it's simply an ideological congratulatory pat on the back looking at the question in a manner that lacks the punch of any particularly valuable insight.

Propaganda tends to be that way.

[CCDG]

"Well, so did the Stalin 5 year plans, Hitler's rearmament, wealthy West Indian plantation owners in the early 1700's. "

Can't imagine why a guy wh0's 70 years old would feel disrespected as his life's work is compared to this.

Both these guys and Romney, created jobs. A well run company grows and creates jobs. Poorly run companies may have a lot of jobs today, but won't have any at some point, no matter how much money we have to spend.

I am fine with the reality that lots of people contribute to the success of a company, I am not willing to demean the accomplishments of the people who lead and guide that effort.

Maybe because lots of what I have done for most of the last decade was fix poorly managed companies. In those companies, no matter how hard everyone worked all of their jobs were going away.

When guys like these build or rebuild well run companies, lots of people have jobs because they did.

[bobbyp]

When guys like these build or rebuild well run companies, lots of people have jobs because they did.

The point is this...there are a variety of ways to "create jobs". When you assign this social outcome to the particular actions of particular individuals you pull the curtain over the bigger issue of the societal structure that 'creates' the conditions and the incentives for them to do so. And following ever so closely on this is the high moral dungeon that these people are inherently 'more valuable' to society, thus doubling down on an serious intellectual error.

But I shall also ask you this: Those jobs were 'created' and filled with 'people' who what?....were created out of thin air? Did they not leave other jobs to take these 'new' ones? Or maybe it was population growth that led to more demand that led to 'created' jobs?

Cart. Meet horse.

[CCDG]

"Or maybe it was population growth that led to more demand that led to 'created' jobs?"

Yep, we were born and the jobs just appeared. Talk about doubling down on serious intellectual error. I believe you could find places with more population and fewer jobs per capita and more poverty.

You are saying their population growth must have been somehow different from ours?

[bobbyp]

Can't imagine why a guy wh0's 70 years old would feel disrespected as his life's work is compared to this.

Similarly, I can't imagine why a person who is, well, of any age eligible to hold a job, would fee disrespected when they are asked to pee in a cup to determine their eligibility for unemployment benefits. But by all means, we must coddle the feelings of the wealthy.

Clearly their egos are much more fragile than we have been led to believe.

[russell]

Not for nothing but the two guys from Home Depot created a bunch of jobs

First, hiring somebody to work at your company is not identical with creating a job. You hire somebody because work needs doing. Some of that can be credited to good management, but there are many other factors involved as well.

And it is not a one-way relationship. Managers hire people. Those people do things that create value for the enterprise as a whole, and for the folks who own the enterprise.

If the company is well-run, whatever pay folks receive is more than matched by the value they create. Otherwise there is no point in hiring them.

It's not just good management that makes a company prosper.

What creates jobs broadly is the need for a good or service. If a company is well run, it's more likely that those jobs will be created at that company, rather than another.

In Romney's case, specifically, some of the companies he bought and managed grew and hired people, and in other cases Bain ownership resulted in jobs being shed in large numbers. What Romney and Bain were very good at is making money for the owners.

Not the same thing as creating jobs.

My overall point in citing the article was not the economic theory involved, but the general cluelessness of the folks quoted. They appear to live in a bubble that reinforces their sense of their own importance. They should all get out more, and I'm not talking about the St Andrews Country Club dining room.

[CCDG]

Coddle...long distance...compare to Hitler.

[russell]

Buffett has succesfully invested in lots of companies that vreated a bunch of jobs over a long time.

As an aside, for the record Buffett is a guy whose great wealth bugs me not at all. Not in the least.

Because he became wealthy by creating value. He did a huge amount of homework, over decades, and directed capital to companies that made good use of it. I'm sure he picked a large number of duds as well, but overall, he invested folks money well.

He made a large number of people very wealthy in the process.

And, because he has a sense of perspective and balance about his role in the economy and society overall.

I really don't have a problem with people getting rich. Even wildly, ridiculously, I-could-never-even-spend-this-much-money-in-ten-lifetimes rich.

Some people are just really good at what they do, or they do something really useful or valuable. Some people are just really lucky.

Fine with me.

I have a problem with people extracting value from the economy without creating some corresponding value. And I have a problem with people thinking that being wealthy entitles them to anything other than the enjoyment of their wealth.

I'm sure it's partly due to how the article was written, but the people quoted come off as a bunch of entitled jackasses.

[bobbyp]

Yep, we were born and the jobs just appeared.

And here I thought those who are in thrall of free markets were more or less in agreement with the the dictum that supply creates its own demand.

At least that is what they http://www.econlib.org/library/Enc/bios/Say.html> Say.

[CCDG]

"My overall point in citing the article was not the economic theory involved, but the general cluelessness of the folks quoted."

But russell, they aren't clueless, they are tired of being the whipping boys of the administrations class rhetoric.

And you constantly demean their accomplishments with three paragraphs on how many people contribute to the success of a business (which no one disagrees with) while barely admitting that the best company can be ruined by bad management.

As for Romney, I have laid off, on average, 20% of everyone that ever worked in the companies I took over, the other 80% got to keep a job because I did. I didn't destroy a single job, I saved 100% of the jobs that the companies continued to have, and then created more. Thats what private equity companies do also. And yes, they make money.

These guys you say are clueless wonder, along with me, when that became a bad thing.

As for demand, yes, good businesses focus on goods and services that are in demand. I can't fathom how that is relevant in any discussion of whether executives are good or bad unless they continue to focus a company on making buggy whips.

Good management and executive direction, both instrumental to company success. Ask the people at Apple and Google and IBM etc. if they think great executives are important to success. Then ask the people at Yahoo and HP.

[bobbyp]

You are saying their population growth must have been somehow different from ours?

No. All I am saying is I have some issues with 'great man theories' of history, economics, etc., and that patting these 'job creators' on the back for 'being special' is (a.) Not necessary-they already enjoy heaps of social and economic rewards; and (b.) is generally politically motivated-i.e., we must keep this small cohort happy or disaster will ensue.

Personally, they might all be great folks. I'm OK with that. But is aggregate they are, with the incentive structure we/they have created, doing great social harm.

[CCDG]

or RIM

[bobbyp]

And you constantly demean their accomplishments

Speaking for myself, I do not demean their accomplishments, such as they are. I have nothing but contempt for their sense of deeply wounded entitlement.

It is totally and grossly without even the merest hint of real class. It is not only 'out of touch'. It is grotesque.

[bobbyp]

I believe you could find places with more population and fewer jobs per capita and more poverty.

Well sure. But consider, in those areas you mention just about everybody works...the young, the old, the sick. They work hard. I repeat...THEY WORK HARD.

Also, they all have jobs...but they are poor. That is a different question. You could parachute a thousand young and penniless Warren Buffets into Haiti. Absent some major changes to their laws, resources, and politics, I'm fairly confident the vast majority of the populace would continue to suffer their tragic and unjust poverty.

[Tony P.]

Talk about doubling down on serious intellectual error.

The phrase "job creator" is a serious intellectual error. To say it without smirking is to surrender to Luntzianism.

Neither Willard Romney nor Warren Buffett nor (I dare say) Marty could ever have got anywhere by making it their mission to acquire or hold on to employees. Acquiring and holding on to CUSTOMERS is what makes an operation a business instead of a make-work charity or a sink-hole for venture capital. If you need employees in order to serve your customers, your profits are reduced thereby.
Jobs (as in "paychecks") are a cost to the business.

Jobs (as in "work") are a cost to the employees. The Luntzian trick is to conflate the two meanings of the word "job": to get intellectually lazy people to think of "good jobs" as a product that businesses strive to provide to a grateful public, in the same way as they strive to provide a snazzier cellphone or a silkier shampoo.

So we get this deeply stupid discourse in which people who got rich precisely because they could serve more customers using fewer or cheaper employees than their competitor across the street are supposed to be worthier of praise and respect (and tax cuts!) than either "customers" or "workers". And their feelings get hurt if anybody says otherwise.

It is to laugh.

--TP

[Anthony Damiani]

Not content with merely skimming off the surplus profits from their laborers, the wealthy now want all the credit for the labor and its products?

[Phil]

But russell, they aren't clueless, they are tired of being the whipping boys of the administrations class rhetoric.

About the worst thing the administration has said about these people is, "You can still fly on your corporate jet, you're just going to have to pay a little more." That's it. There hasn't BEEN any "class rhetoric," or in any case whatever class talk has come from the administration has been so mild, and so effusive in its praise of capitalism and success, that it beggars belief that anyone would be offended by it unless a) they were so thin skinned that you can see their bones, or b) they're pretending to be offended for political purposes.

[Julian]

Truly, billionaires groan under Pharaoh's lash.

[Rob in CT]

Romney, created jobs And destroyed jobs too. What's the net? I don't know.

The point is that "job creator" is bullshit propoganda and deserves nothing but scorn.

they are tired of being the whipping boys of the administrations class rhetoric.

1. The rhetoric has been very mild; and
2. The worlds smallest violin gently weeps.

This is yet another instance of extremely privileged people whining and crying about how persecuted they are.

[Rob in CT]

are these guys suggesting that they wouldn't invest (thereby supposedly creating jobs) if capital gains taxes were a bit higher or marginal income taxes a bit more progressive? Will they all take vows of poverty if estate taxes are raised?

That's basically the threat: they'll go Galt and then we'll be sorry!

It's the threat of an angry teenager. They'll be sorry!

They'll work less 'cause they won't get to keep as much. Nevermind that once you've got tens of millions (let alone billions) of dollars, it's long since ceased to be about anything but a dick measuring contest with your peers. They'd keep right on going. And if they didn't? WIN. Because there are plenty of other folks who would be happy to step in.

[russell]

First, thanks CCDG for your comments here, they deserve a thoughtful reply and I will try to respond when I have a bit more time.

For now I just wanted to briefly follow up on this from Bernie:

I'd like to see the numbers, including the number of small hardware stores driven out of business by Home Depot.

Other numbers that would be interesting to see would be:

How do salary and total compensation for rank and file at my local Home Depot compare to that of the folks who work at my local Ace Hardware?

How do they compare to that of the folks who work at my local family owned lumber yard?

How much of the money that I spend at my local Home Depot flows to folks who have some hands-on involvement with the company? How much to the folks who actually get the goods in front of me, answer my questions, and generally help me do what I need to do?

How does that compare with my local Ace, or the family-owned lumberyard.

A question that I already know the answer to:

How does the quality of the merchandise and service at Home Depot compare to what's available at the Ace and the local lumberyard.

Home Depot is open on Sunday, which the lumberyard is not (although Ace is). So, I will grant them that.

[Phil]

Just once, before I die, I want to see, when

• Newt Gingrich says that poor children "don't have a work ethic" and should be cleaning schools for the other kids,
• 
  or Rick Scott says that unemployed people should be required to pee in a cup before collecting benefits to which their former employers have been paying in and they're legally entitled to,
• or some jacktard at a hedge fund complains about people who don't make enough money to pay federal income tax

or so on and so forth, JUST ONCE IN MY MISERABLE LIFE, I want to see the Marty's and the David Broders and the Charles Krauthammers and the investment bankers and the VC guys and the whole lousy lot of them complain about "disrespect" and "class warfare" and "class rhetoric." JUST. ONCE.

[Free Lunch]

Romney started rich and made himself much richer by:

1. Buy a company.

2. Fire hundreds or thousands.

3. Sell the company for profit before people realize that the company does not have enough employees to keep going and keep competitive.

My apologies to the very rich who are so arrogant and clueless that they have the gall to compare themselves to those who actually are struggling. I feel so bad for their inability to have any human compassion. I suspect that helps them sleep at night.

[CCDG]

"I want to see the Marty's "

It would be redundant on this blog for me to take the time to complain about the 2 out of three of those things are stupid. I suppose in those cases I could take the time to say "what russell said" but, really, is it adding anything to the discussion?

[Phil]

I don't know, is claiming that "the administration" is engaging in "class rhetoric" and "disrespecting" rich people when they have done no such thing adding to the discussion? You certainly seem to think it is.

[cleek]

b) they're pretending to be offended for political purposes

we have a winner.

[bobbyp]

These guys you say are clueless wonder, along with me, when that became a bad thing.

"...it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

Matthew 19:24

I'd say "a while".

[CCDG]

bobbyp wins

[GoodOleBoy]

'bobbyp wins'

Only the rhetorical joust.

Much of the substantive part of this discussion has been about 'job creation', and conclusions come mostly from how that process is viewed. Job creation in the private sector is complex, involving creative destruction and product and service innovation, where the latter is much influenced by incentives. In turn, such incentives are very much influenced by government policies, particularly taxes, regulations and subsidies.

In my view, the only direct and literal job creator is government and this is generally a bad thing, since its usual result is to constrain private behavior. I don't know how many jobs are in the TSA, but I cannot think of any recent government jobs created that are as useless.

I don't defend wealth or the views of the wealthy but I do defend the essence of the process that allows such results, but not the corrupting influences that have led us to where we are today, most of which are found in Washington and I find Marty's views on target and cogent.

[hairshirthedonist]

Can we all at least agree on the point that capturing market share does not necessarily create jobs?

Now, when someone comes up with a new or improved idea, which creates a marketplace that didn't previously exist, then you might be talking about creating jobs.

Efficiency is well and good in so far as it increases real value, even if it results in some number of jobs being lost. The hope would be that the guy with the new or improved idea will need those workers, anyway.

Here's a final question: Why haven't wages risen with productivity in the last few decades?

[hairshirthedonist]

In my view, the only direct and literal job creator is government and this is generally a bad thing, since its usual result is to constrain private behavior.

Is this true? I think unemployment constrains private behavior a lot more (unless you're talking about crime).

Would you refuse to sell goods and services to someone who works for the government? Would their partonage constrain your private behavior?

[wj]

But russell, they aren't clueless, they are tired of being the whipping boys of the administrations class rhetoric.

But CCDG, think for a moment about how they got to be "whipping boys." There are three obvious ways to get into that position:

Group 1) Bud luck. Someone just decides that they need a target, and you are convenient.

Group 2) Bad deeds. For example, you get rich by impoverishing others, without creating any real value for anyone else. (I'm thinking of several groups in the finance industry here.)

Group 3) Bad associations. You don't engage of the behavior in Group 2 above. But you consider yourself part of something that includes them; they are "your people," and you stand by them.

From the comments quoted, I'd say that all of the speakers (and you, at a guess), see themselves in Group 1. Unfortunately, the rest of the nation tends to see them in Group 2 (or at least Group 3).

The only way I can see to change that is to demonstrate that, unlike Group 2, there really was either substantial benefit to people outside your group, or that at least others were not impoverished by your actions. Not just assert it, mind, demonstrate it. All the complaints and assertions in the world will not work. Indeed, they only make the situation worse.

[CCDG]

wj, I believe that the predominant problem post 2008 is Group 1. As a casual demonstration of this, there has been a ton of back and forth on Fannie Mae and FMAC, vigorously defended while the blame was placed entirely on private entity actors.

Right up until yesterdays SEC actions. Note the admitted charges by Fannie and Freddie to push the blame to the prior executives.

Banks, rich people and corporate executives were just the easiest target as a group.

[bobbyp]

...but I do defend the essence of the process that allows such results.

By all means. However, when it gets down to the bare knuckled politics of it, this generally translates into:
1. "Leave me alone." (no regulation of market failure and/or excess).
2. Employment at will. (So, you don't like it here? Go find a job somewhere else. Good luck!)
3. Lower taxes for "wealth creators". (See HSH's absolutely key question above re productivity and give me an answer, please).
4. Freedom to ignore externalities (subset of #1 above).
5. The barely concealed, and often just grind it in their face contemptible assertion that the rich are the "elect" (sorry Calvin) or are morally superior to others.

Has the fat lady sung yet?

[CCDG]

BTW, I am not discounting the reality of the existence of a Group 2 of some size. But I also accept the existence of bad actors at every level of society.

Most charges of "taking advantage" from the rich to those who purposefully live off unemployment as long as possible can be demonstrated by pointing to a few examples. The generalization of those cases is equally suspect.

[CCDG]

"(See HSH's absolutely key question above re productivity and give me an answer, please)."

But you answered this earler, the working population doubled in the last 50 years. Labor became less constrained so, despite productivity increases, real wages remained flat. Barring productivity gains they would have fallen with that large an increase in the workforce.

And in that assessment I am ignoring offshoring where we created millions of jobs that again limited real wage growth.

[ral]

We have seen several very public waves of atrocious behavior by extremely wealthy people, to the detriment of society at large. Besides Enron there was Global Crossing, where Gary Winnick walked off with over $700 million as the company cratered. He is now a philanthropist.

It's true that some executives have been punished (e.g., Jeffrey Skilling of Enron, Bernard Ebbers of MCI, Dennis Kozlowski of Tyco), but the perpetrators of the financial collapse have not faced any consequences at all. Notably Joseph Cassano of AIG to this day is unapologetic.

Is it any wonder that wj's group #2 is on peoples' minds?

[hairshirthedonist]

Barring productivity gains they would have fallen with that large an increase in the workforce.

workforce = customers

[Ugh]

Not to mention Mr. Winnick's use of some interesting tax planning.

[CCDG]

I am leaving to fly home. I just wanted to say that I am not deserting this thread for any reason beyond it is a pain to type on the phone, and impossible in the air.

And Happy Holidays to all.

[Rob in CT]

You too, Marty.

The SEC suits: basically the key as far as I can tell, is the allegation that "expanded acceptance" loans are the functional equivalent of "subprime" loans. This is complicated by the fact (so I read) that there is no actual definition of subprime.

[Ugh]

workforce = customers

Except for when you manufacture your product in Asia and 90%+ of your sales are from countries where you don't manufacture, not so much.

But it would be at least more believable if Mr. Dimon et. al. went around crowing about their ability to create jobs...outside the U.S. Somehow I don't think they'd be willing to highlight that (in fact, IIRC, many companies stopped reporting in their SEC reports how many employees by country and/or inside/outside the U.S., and have actively resisted efforts to require them to do so).

[hairshirthedonist]

indeed, Ugh...

[bobbyp]

Labor became less constrained (result of population increase) so, despite productivity increases, real wages remained flat.

Well, I'm not quite sure what you are trying to say here beyond the fact that more people = lower/flat wages. If that were the case, then CEO pay should be something other than we observe. After all, they are part of that population increase, so why are not "less constrained" and why are their wages, nominal, real, or imagined not "flat" like everybody else's?

The argument that CEO pay somehow reflects their "productivity" can lead down http://economistsview.typepad.com/economistsview/2007/06/marginal_produc.html> some strange paths and lead to some rather startling conclusions (for those of you so interested).

The bottom line is this: Increases in productivity allow us to have more wealth per capita. Resolving the allocation of that wealth cannot be determined by simply invoking the concept of "free markets".

It's about power and politics. Always has been.

[GoodOleBoy]

' but the perpetrators of the financial collapse have not faced any consequences at all.'

And the blame for no consequences rests with the wealthy themselves? Where does Washington come into the picture?

'workforce = customers'

The right side of this equations participates in the productivity improvements, even when the production is elsewhere.

In my younger days, I can recall observing most of the left-leaning (or now liberal) acquaintances of mine buying and driving motor cars with German or Japanese labels. I often wondered why they did not instead throw more support to the heavily unionized labor force producing the junk nobody was clamoring for. The same can be applied to electronics (cameras, tv's, computers, etc.)

Nonetheless, the US standard of living has increased substantially, marred mainly by those areas where we have allowed, yea even promoted, the development of bubbles, e.g. housing and education.

[bobbyp]

And the blame for no consequences rests with the wealthy themselves?

Insofar as we have, since Jimmy Carter, pandered shamelessly to these people and their destructive ideology, thus allowing our government policies to largly reflect their outlook, interests, desires, and at times even their whims, why yes.

Washington comes into the picture like Jeeves coming into a P.G. Wodehouse short story.

At your service, sir.

All the best.

[Lewis Carroll]

"The bottom line is this: Increases in productivity allow us to have more wealth per capita. Resolving the allocation of that wealth cannot be determined by simply invoking the concept of "free markets".

It's about power and politics. Always has been."

This is not only true, it has been known for over 200 years:

"What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things, which nobody ever hears of. Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour. Their usual pretences are, sometimes the high price of provisions; sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the necessity superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing, but the punishment or ruin of the ringleaders."

Kneecapping unions, outsourcing and the loosening of anti-trust rules and enforcement bear a huge amount of the blame for the real decline in median wages in the US over the past 30 years or so.

And it's supported by parallel evidence to the contrary in many other advanced nations (e.g. Germany, Sweden) that chose not to go down that path, and have not suffered similar declines in real wages.

[Lewis Carroll]

BTW, GOB, those German and Japanese car manufacturers are every bit as unionized as the US ones.

[bobbyp]

What are the common wages of labour, depends...

Adam Smith, no doubt. Aye, the guy had a keen eye for the mentality of the merchant class.

[Laura Koerbeer]

"Nonetheless, the US standard of living has increased substantially, marred mainly by those areas where we have allowed, yea even promoted

Standard of living has increased compared to when?

It has dropped dramatically just since I was in high school. Half the population is at of below the poverty line. It has become difficult for families to put their kids through college, even when attending state uiversities. It used to be that one income could support a family at a middle class level and now it usually takes two. Thousands are crushed by medical expenses while Republicans tell lies about Obamacare. There has been dramatic increase in the wealth of a very few and a loss of standard of living by a very broad spectrum of society.

Of course if they get their way the Repubicans will make all this worse by destrying Medicare and Medicaid, undermiing unions and demonizing governemtn employees.

No,the standard of living is not rising, not as compared to the seventies, anyway.

[hairshirthedonist]

Laura, you, for some weird reason, don't measure standard of living by access to gadgetry. It's all about the flatness and clarity of TV screens, not to mention their relatively low cost. What is it that you think life is all about, anyway?

Remember the cell phones! Let them eat MP3 players!

[Fred Sutherland]

Without calling names or engaging in "class warfare", I don't understand who is quibbling with the fact that, historically and geographically, our income disparity in this country is way out of line.

I don't want to blame anyone, but shouldn't we fix this obvious problem? The Dems want to tax the rich more, which is one approach. I haven't heard of any Republican's willingness to even admit that it is a problem. Shouldn't they at least attempt to explain why it isn't a problem' if they think it isn't? If they acknowledge it as a problem, what is their recommended solution?

Does anyone know the answer to these questions?

[Countme-In]

Well, Fred, I expect the absolute refusal (on the other hand, there are thoughtful people on Wall Street who are worried about this problem, but you have to look pretty hard to find the commentary) of Wall Street's hired Liberty Valances, especially on one side of the aisle, to even acknowledge the problem

I've been thinking along these lines as I read the back and forth on this thread:

http://digbysblog.blogspot.com/2011/12/dear-jamie-can-we-talk.html

I also think the Dobe makes a mistake confusing his unfortunate but mostly necessary actions in restructuring companies (including firing staff) with the likes of what's going on with the spectacle of Dimon, Cooperman, Mitt Romney at Bain, etc (see the film "Margin Call" for how clueless these movers and shakers are, not that it lessens in any way their claims to be movers and shakers) and the host of folks whining about their incredibly good fortune in having a government and a culture that saved their hides and fortunes via TARP, unemployment insurance, and rest of the safety net, etc etc, from being eaten by the rest of us after the financial crisis of 2008.

The lights were about to go out. Ours, theirs, everyone's.

As an aside, I am curious to know if the companies the Dobe saved, and for which he should be congratulated (although once you fire Maynard, it's a little rum to then tell him to go get a job ;) had first been placed in a Michael Milken-inspired shock doctrine vice of debt to enable the extraction of the requisite pain from the employees. "I'm sorry, it seems I've borrowed 10 times the previous capitalization of the company and though we could have muddled along without that debt, my creditors are demanding repayment in the form of your jobs and livelihoods, people. My hands, as they say, are tied."

Now, back to Dimon and company: they lived (figuratively and literally they skate, like Dick Cheney, despite all), thanks largely to the taxpayers, to receive their bonuses and then, incredibly, they proceeded to throw money at jagoffs who want to shred TARP, unemployment insurance, medical insurance, and the entire social safety net AND to whine about a historically small increase in the marginal tax rate as some sort of f8cking victimization.

To paraphrase John Lennon (this, years before he would show up at hunger strikes in a limo), I'd like to ask your help. Those in the cheaper seats, clap your hands, and the rest of you, if you'd just rattle your f*cking (edited by Lennon for the Queen) jewelry.

And then the latter can just sit down, yes, collect your bonuses, etc, enjoy the show, and then shut your f8cking mouths.

Given the season, let me close with this:

Dimon and company remind me of the rude, snippy, vicious little mothers in minimum-wage elf's David Sedaris' The Santa Diaries (is that what it was called? he's reading right now on NPR) who would stand in line at Macy's among the plenty and the glitter of America and leverage the Christmas spirit to further their petty power over their awe-struck children by threatening the latter with punishment by Santa if they didn't comport themselves with the mother-needs of the moment.

Sedaris, the surly gay manchild clad in non-wicking Elf-green, who probably just came back from break using the sh#t-filled, clogged toilets in the employee bathrooms, is on to this grift.

Especially the mother who asked Sedaris, despite ample evidence of the answer right in front of her eyes, where the ladies' room was located. Well, said Sedaris (here it read by him for the full impact), I expect it's the one right there with all of the women lined up in front of it.

To which the mother spat back, in the spirit of the season, "I'm going to have you fired."

Sedaris wanted to pause a moment for effect, aware of the awe-struck open-mouthed little kid looking up at him, Santa's elf, and then lean into the mother and say:

"I'm going to have you killed."

[Countme-In]

" .. to even acknowledge the problem.

... should be continued to say "is to blame for much of the 'class warfare' rhetoric."

[russell]

Does anyone know the answer to these questions?

Pay people more.

[hairshirthedonist]

Pay people more.

If I could do economic experiments in a simulated parallel universe that operated just as ours would, only without the attendant sufferring that might occur (thus the simulated part), I would enact a regionally adjusted, for cost of living, minimum wage averaging, say, $15/hr across the country, just to see what would happen.

One thing I'm sure of would be an some increase in under-the-table shenanigans, but I'd still like to see how it would otherwise work out. You can't outsource, for example, janitors to Asia.

Or forget the minimum wage and institute a federal jobs guarantee for anyone willing to work for said wage doing whatever work was on offer, along the lines of filling potholes, doing environmental remediation, providing services to the poor, etc. - the kind of stuff that always needs doing but doesn't always get done.

[russell]

OK, so while I am waiting for the holiday pizza lunch to arrive, I'll attempt a more thorough response to comments from Marty, McK, GOB, and others.

First try was too long, so I'll break it up into a couple of posts.

There are basically two things discussed in this thread:

1. Are the folks quoted in the bloomberg piece clueless, tone-deaf jerks

2. Are extremely wealthy entrepreneurs and business owners and managers responsible for creating jobs

These are separate issues, so I'll discuss them separately.

Last first:

Hiring somebody is not the same thing as creating a job.

If the world needs 10 plumbers, and your plumbing company is better managed than the other guys, and you capture some of the other guys market share and hire away two of their plumbers, I'm not sure you can say you created two plumbing jobs.

If somebody somewhere invents a most wonderful toilet, that everyone decides they absolutely must have, except it requires weekly maintenance by a plumber, and the increased demand for plumbers means you can hire three more, I'm not sure you can say you created three plumbing jobs.

What creates a job is the demand for a good or service. Sometimes excellent management or entrepreneurial insight can create demand - or, more likely, arrange things so that a latent demand can be satisfied - and in those cases you can make a good argument that a job was created where one simply did not exist before.

But it doesn't always, or even usually, work that way.

Further, oftentimes the conditions that create job in one place, eliminate jobs in others. The most common examples here are cases where technical innovation created a new industry by making an existing one obsolete.

The number and range of factors that affect the creation, elimination, or plain old shifting around of jobs make it very difficult for any one actor to claim credit for "job creation".

To take Home Depot as a specific example, the innovation there was to approach hardware, lumber, and other home improvement goods from a "big box" business model. Lower margins and prices, on a higher volume, provided more efficiently through fewer, larger locations and an extremely efficient supply chain.

A lot of that business model depends on IT and communications innovations that make extreme logistical efficiencies possible. Did Marcus invent those? Or did he simply have the insight to apply them to what had been a less rationalized industry sector?

The latter is not a bad thing, but it's also not the achievement of a visionary superman.

The big box model also results in overall *loss* of jobs in may communities. And many of the people it puts out of work are small business owners, who most likely do their own banking and other business in their own community. So, the "job-creating innovation" ends up concentrating wealth, rather than spreading it around.

One of the reasons I mentioned Ace Hardware in my comment upthread is that they operated for decades on a cooperative model. Local hardware store owners combined to increase their purchasing power and achieve other economies of scale, the profits went back to them, the owners. So, instead of a few billionaires, you end up with perhaps thousands of millionaires, or at least people with good incomes for their area.

And those millionaires, or whatever-aires, are the folks who get up in the morning and actually go sell hardware.

The big box model also incurs other costs on the local community. Big box locations are normally built outside of downtowns, where open land is available, and so traffic is increased. Open land is lost, and if that particular location doesn't work out, the big box itself may end up becoming the local white elephant.

So, all in, it's not clear if Marcus' excellent adventure is a win for all concerned, or only for folks who own a piece of HD.

Not looking to pick on or demonize HD, it's just an example.

[russell]

Next: are the folks in the article clueless dolts?

The argument against that claim seems to be that they are successful business people and excellent, value-creating managers.

All of that may be true, and they may still have a painfully amazing lack of understanding of the social and economic context in which they live.

The people in the article are folks who are worth tens or hundreds of millions of dollars, if not billions. Far from "picking on them", here is what we do for them.

Our "progressive" income tax regime is flat after just less than $400K. So they are paying the same rate on their four-millionth dollar as they paid on their four-hundred-thousandth. Like everyone else, they pay FICA on the first $106K of their income, but all of their income above that is exempt.

But that's just earned income. Most of these folks make much of their income from capital investments, which are taxed at a capital gains rate.

And all of that is kind of noise, because at the truly nosebleed levels, compensation is delivered in a range of creative ways that magically turn it into something that isn't "income" at all. So, lower taxes, or no taxes at all.

It's not just the rich's vegetables that are special.

What else? For folks who have meaningful control of a successful business, we allow them to employ the assets of that business to further whatever public policy agenda pleases them. Because their business is a person. They can use its assets to, for instance, try to remove the Dodd-Frank provision that they make the ratio of their compensation to that of the typical worker in their enterprise public.

Too burdensome. Think of the bookkeeping involved.

To be honest, I'll be damned if I can think of a single way in which the folks in the bloomberg piece are harmed or persecuted in any way by our society, our laws, or any of our institutions. Let alone harmed, I can't think of a single way in which they are inconvenienced.

If you want to count the complexity of their tax returns, maybe. But they have staff for that.

So, yes, I find their claims of ill treatment to be amazingly bone-headed.

As an aside, Marty mentions HP as one of the poorly managed companies. Quite so. Fiorina was a years-long, one-woman train wreck.

When she left (was booted out of) HP, she walked away with a bit over $20 million.

$20 million for f***ing up one of the most successful companies in the world. And, laying of 18,000 people in the process, and expressing, as her only regret, that she had not done it sooner.

So, kein mitleid fur die 1%. Can you possibly not understand why that is?

[russell]

Last but not least, Thullen sez (yes, John, we know it's you hiding in the Count disguise):

the latter can just sit down, yes, collect your bonuses, etc, enjoy the show, and then shut your f8cking mouths.

I am not interested in "the latter" collecting their bonuses, whether they STFU or not.

If we're talking about the financial sector folks and the housing bubble / sub-prime fiasco, we're talking about a systematic, industry wide exercise in LYING and FRAUD.

Those MFers should go to jail, after being forced to surrender whatever they made from their fraudulent activities, and then they should be barred from ever working in the financial industry and/or holding a position of fiduciary responsibility of any kind ever again.

To GOB's question about what the government responsibility was: the feds eased underwriting requirements to encourage banks to lend to people who were poorer and less credit-worthy, so that they could buy homes.

Nobody told the loan originators to MAKE UP income numbers. Nobody told the folks who bundled those notes into securities to MISREPRESENT the value of the notes. Nobody told the ratings agencies to LIE about the level of risk they represented. Nobody told the folks selling the securities to also LIE about the level of risk they represented, or the SELL THE SECURITIES TO THEIR CUSTOMERS AND THEN SHORT THEM FOR THEIR OWN PROFIT. Nobody told any of these clowns to FAIL TO REGISTER TITLE OWNERSHIP with the relevant county and state authorities, thus muddying clear right of title for thousands and thousands of properties. Nobody told the mortgage servicers to FRAUDULENTLY FORECLOSE on rightful homeowners, or to PROCEED WITH FORECLOSURES unnecessarily while mortgage adjustment processes were underway.

Basically, nobody made any public law requiring any of these folks to act like lying, thieving, sc*mbags.

So, no bonuses please. Jail, and then go get a real job somewhere, if you can. Maybe HD is hiring.

If not, they can get out their little tin cups and beg. They will likely be shown more plain decency and mercy than they have managed to show anyone else.

Those bastards ruined thousands upon thousands, if not millions, of people. Plain and simple. In the spirit of the season, screw them.

Lunch is over, back to work.

[Countme-In]

What Russell said, except the utterly unfounded, speculative first line.

Reportedly though, Thullen sends his love to all, through third parties, mediums, and secret dispatches, in case we were wondering where the love went.

He could change his email address too, but who am I to tell HIM what to do.

Screw them, indeed.

I marvel at the small things as a way of raging against the big stuff, unlike Russell who trains plain language on the point at hand.

Like the nonplussed (NONplussed? I'm stark, raving PLUSSed at the entire spectacle) de Niro character in "Goodfellas", I look at Dimon, Cooperman and company and, leaving aside the monstrously criminal nature of the grift itself, their showing up so soon after the heist in public and so innocent-eyed and victimized with the Caddies and the wives enraptured in lush fur and ask: Whaddaya doin? What is this? Didn't I tell you to lay low for awhile? Hm? Didn't I? Answer me. DIDN'T I TELL YOU?"

It blows me away that no one, not even their mothers, taught them the cheap grace of how to behave after getting away scot free with lying, thieving scumbag behavior.

But now I'm going to sit down at the bar with Russell Pesci over heah and decide how to deal with these jagoffs.

[Phil]

As an aside, Marty mentions HP as one of the poorly managed companies. Quite so. Fiorina was a years-long, one-woman train wreck.

When she left (was booted out of) HP, she walked away with a bit over $20 million.

$20 million for f***ing up one of the most successful companies in the world. And, laying of 18,000 people in the process, and expressing, as her only regret, that she had not done it sooner.

And yet amusingly enough, that's probably less than her male peers would have gotten.

[JustMe]

But russell, they aren't clueless, they are tired of being the whipping boys of the administrations class rhetoric.

Then they need to nut up and start acting like big boys, not overgrown whiney children screaming "pay attention to me!", now don't they? No one loves them. Oh, poor them. They need to act like grown ups, and if they can't do that, then it is clear that they really are the problem our society and economy is facing.

So, no, CCDG, they don't have my sympathies, and I have the sort of social class and and economic security in my life they I don't need to jump to their defense to convince people that I'm one of the "good ones."

[russell]

except the utterly unfounded, speculative first line.

OK, my mistake. I'll stop spreading these crazy rumors.

Best holidays to everyone, whatever your particular flavor. Safe travels if you're traveling, and light, love, and peace to all.

[CCDG]

russell(et al,

Once again thats a nice long rant about the lack of disadvantages in our society for wealthy people,having absoutely no relation to any point i made, or they made.

Except of course for the profanities and name calling, which makes the point.

However, this:

Nobody told the loan originators to MAKE UP income numbers. Nobody told the folks who bundled those notes into securities to MISREPRESENT the value of the notes. Nobody told the ratings agencies to LIE about the level of risk they represented. Nobody told the folks selling the securities to also LIE about the level of risk they represented, or the SELL THE SECURITIES TO THEIR CUSTOMERS AND THEN SHORT THEM FOR THEIR OWN PROFIT. Nobody told any of these clowns to FAIL TO REGISTER TITLE OWNERSHIP with the relevant county and state authorities, thus muddying clear right of title for thousands and thousands of properties. Nobody told the mortgage servicers to FRAUDULENTLY FORECLOSE on rightful homeowners, or to PROCEED WITH FORECLOSURES unnecessarily while mortgage adjustment processes were underway.

which is again a complete failure to accept any shared responsibility of the state, GSE's, and the recipients of those mortgages.

Those recipients willingly and fraudulently lied about their income to obtain a mortgage they couldn't afford for a house at 100% of it's value,in what was, and is, a cultural failure and financial stupidity at all levels of our society.

But, to you, the "rich" should be generalized and singled out for their part.

And, just for kicks, you should find the whole interview with the HD guys, it was 2 hours on CNBC and they got a one line quote. Cooperman spent an hour also. All seemed pretty grounded guys.

[russell]

having absoutely no relation to any point i made

Which points included:

Not for nothing but the two guys from Home Depot created a bunch of jobs

Both these guys and Romney, created jobs.

When guys like these build or rebuild well run companies, lots of people have jobs because they did.

As you see, a number of your points were about how executive management creates jobs.

A substantial amount of my comment was about the difficulty of ascribing sole, or full, or even primary credit for creating jobs to managerial goodness.

Sometimes you can, quite often you cannot. There are too many factors involved.

Several of the examples you gave for folks who "created jobs" were folks who created jobs *at their companies*, and eliminated jobs elsewhere.

All of this, BTW, is simply a restatement of a point made by GOB and others. A point to which you have made no substantive reply.

Managing a company well and hiring somebody *at your company* is not necessarily the same as *creating a job*. Where, for "creating a job", please read, "making a job exist where no job existed before".

If you would like to rebut and explain how a manager hiring somebody at their company really is the same as creating a job, whether in general or in any of the specific cases you gave, feel free. If not,not. But don't give me any crap about "not addressing your points".

[russell]

And, of course, another thing.

Except of course for the profanities and name calling, which makes the point.

But, to you, the "rich" should be generalized and singled out for their part.

I made three posts. Of the three, the third uses strong language and calls names. That language and name-calling is directed toward *specific actors* in *a specific industry* who engaged in *specific acts of misrepresentation and fraud*.

No generalization of the rich, no singling out of anybody except folks who actually engaged in bad behavior.

In fact, if you actually read what I actually write, here and elsewhere, you will find that I have stated, on a number of occasions, that I have no particular issue with rich people.

I wish there were many more of them.

Last but not least, that comment was in response to Count's statement that *the financial actors involved, specifically*, should take their bonuses, sit on their hands, and wait for the general sense of outrage to blow over.

Personally, I don't think they should be receiving bonuses, I think they should be in jail. And, I think strong language directed at them is appropriate.

Are folks who lied about their personal income and credit standing also culpable? Yes, they are.

I know less about the actions of the GSE's here, so I don't have an opinion about whether and to what degree they, specifically, share responsibility.

But long story short, that post had nothing to do with you or anything you said. It was a reply to the Count. So, unless you're looking for something to be offended by, perhaps you should let it go.

In any case, I frankly regret taking the time to try to make a longer-form, substantive response to your posts. You raise some good points, I thought they deserved a thoughtful reply, so I took the time.

Believe me when I say I have lots of other things to spend an hour on. As, no doubt, do you, and as, no doubt, do we all.

But I'll think twice before I bother, next time.

Have a nice holiday.

[CCDG]

russell,

I understand your frustration, and do appreciate the parts of the response on HD and ACE. But I admit to being frustrated myself at the concept that creating a whole new way to think about selling hardware, etc. that clearly met a desire, if not a need, for millions of customers, building from a single store to an international company employing 190,000 people is somewhat dismissed, as I read it, "well they screwed ACE, people already had a place to buy hardware, they didn't invent anything".

I view most of your objections as socially focused, anti big box stores, replacing downtown merchants, etc. My sister in law has worked for Main Street for over a decade, I understand the objections. I would suggest that they had a better business idea, and worked hard to make it work, the heart of what I believe we could use more of today.

So, rereading my comment, I was unecessarily brusque, and was irritated that a good example of working hard and building a business SEEMED to be dismissed. We used to define what they accomplished as success.

I also tire of the hate the banks and bankers rhetoric, they were as much a result of the cultural failure as everyone else, not the cause.

Lastly, I always appreciate your replies, and read them thoughtfully. I also occasionally rant myself, as Dobie as I try to be.

And I do hope you and yours have a great holiday.

[ral]

Russell, although I imagine you already know it, let me just say that I appreciate your efforts.

And happy holidays to all.

[sapient]

Best holidays to everyone, whatever your particular flavor. Safe travels if you're traveling, and light, love, and peace to all.

What russell said. Back at you, russell, and to all here.

[Countme-In]

"Last but not least, that comment was in response to Count's statement that *the financial actors involved, specifically*, should take their bonuses, sit on their hands, and wait for the general sense of outrage to blow over."

Not quite. My bad. I was just wondering, in my way, why they don't just shaddup with the victimhood for awhile as they were thinking they (specifically, the perpetrators) might get away with all of it unmolested.

Rephrase to "that the financial actors involved, specifically*, would be so clueless, stupid, tone-deaf, and ruthless in the face of the outrage as to take their bailouts and bonuses and then whine about slightly higher taxes, more oversight, and a little additional ribbing from the society and government which bailed them out."

And yes, CCDG, mortgage recipients lied about their income.

Two words: Due diligence.

I have a feeling that concept was cut loose in the name of "efficiency" and "productivity" for the robo-signing mortgage lenders.

Also, those borrowers ended up being singled out.

Also, yeah, Cooperman et al may be well-grounded, as you say, (I've seen him plenty on Wall Street Week and then the business channels over the years) but if so, why is he so foolish as to attract and get burned by self-inflicted lightning strikes?

CCDG, no one here that I can tell is confusing you with Dimon and company.

And to all a good night.

[CCDG]

"If you would like to rebut and explain how a manager hiring somebody at their company really is the same as creating a job, whether in general or in any of the specific cases you gave, feel free. If not,not. But don't give me any crap about "not addressing your points". "

Now, to the specifics of this. I think that in a constantly evolving economic structure people who build and manage good companies create jobs, in every meaningful way.

They answeer demand, they manage caassh and profits that allow them to invest in more business, they garner more business. The objections here assume a constant market size.

So here is what I believe the disconnect with my view is, good businesses make goods and services more vauable to the customer, thereby increasing market size.

Apple didn't invent the cell phone, or the internet, or music. They made all of those things have more value, increasing the overall market AND taking market share.

Home Depot made self home improvements seem easier and made the things that they sell have more value.

IBM convinced businesses that they could provide services BETTER than if the company did it themselves, most of the time not cheaper or with less people.

And so on. That creates jobs, often providing the ability for people to move from jobs that won't continue to a new one that does.

In every industry the most common saying at the executive level is that a rising tide floats all boats. Any newcomer who generates more market size is worth dealing with in terms of competition for market share. If you have good executives and management.

[bobbyp]

And yes....mortgage recipients lied about their income.

Liar loans were not necessarily built on lies by the borrower. They were loans specifically DESIGNED to enable those with dodgy income to qualify for a mortgage. Now who do you think designed these loans that people with no assets or income could qualify for? Think hard.

I'll give you one guess, and if you can't answer correctly you are a liar.

During the bubble years, Wall Street had an insatiable demand for loans, and they weren't too particular about their quality. More loans meant more securitization, more profits, and more CDO's, CDS's, and other vehicles for leveraged gambling with other people's money.

So no, don't try to sell to me the idea that "both parties" were at fault for the insanity known as the housing bubble, because you're dead wrong on the facts.

The same applies to wingnut attempts to blame Fannie and Freddie for this mess. Their hands aren't clean by any means, but they were not the prime movers of this disaster.

Also, our regulators were asleep at the switch (I'm looking at you Alan Greenspan). They were criminally negligent for not seeing an unsustainable bubble building up and taking measures to calm the raging speculative fevers.

[bobbyp]

A BRIEF ESSAY ON HOME DEPOTISM

It has been claimed by some here that the founders of Home Depot "met demand" and "increased market size". One of these claims is true, but for all the wrong reasons. The other is somewhat beside the point.

The Home Depotism business model depends critically on a web of public investments, public incentives, and public constraints. Here are just a FEW of them:

1. Public zoning laws that promote single family housing, vast suburbs, and reliance on single occupancy vehicles.
2. Collective public investment in roads as opposed to mass transit.
3. High dollar policies that encourage imports at the expense of domestic production.
4. Public investment in technology (you know, Al Gore's invention, the internets).
5. Tax treatments that effectively subsidize the petroleum industry.
6. A Department of Defense (sad, but true...funded by your tax dollars) that keeps the gasoline flowing from those undeserving brown people.
7. Regulations that effectively externalize the true costs of CO2 pollution, further enabling and promoting suburbs and the ubiquitous automobile.

Now the smart founders of HD came along and 'discovered' a business model compatible with this kind of society. That it both reflects and extends this kind of setup is not particularly their fault.

We The People made those choices.

Nonetheless, it is incumbent on these "job creators" to realize that it is our right to change these public choices, and when they assert we do not have this right I call B*llSh*t, and I'm not particularly happy about them complaining about their mistreatment if we even timorously broach the subject, much less actually DO ANYTHING about it ("Where does the greed stop?", someone asked).

So this: It is they who should be grateful, not the other way around. And if they use their power to oppose our changing the rules, well that is understandable.....but the whining? That simply shows an absolute lack of class.

Screw them.

[bobbyp]

In every industry the most common saying at the executive level is that a rising tide floats all boats.

Oh, please. The most common sayings I hear are:
"It's not my fault."
"Will they hit projections?"
"What have you done for me lately?"
and the biggie: "How much will it cost?"

Raising boats? You can't be serious. Real wages flat for the majority of our citizens over the last 30 years (the data does not lie)and you babble about rising tides?

That is simply not true.

[Countme-In]

I'd be lying bobbyp if I didn't admit to appreciating your point about liar loans.

Uh, lying lenders designed liar loans, right?

Am I lying or just plain wrong?

Choose one and if you don't choose correctly, I'll give you a second shot. ;)

CCDG, may I differentiate between the innovative practices and products of Apple (which in Steve Jobs' case included crying like a debutante at the drop of a hat to get his way at every turn, but I'll make room for genius), IBM, and in some ways Home Depot and the destructive, criminal (yes, innovative, like three card monte is innovative) practices of lenders and financial manipulators and their enablers?

[Countme-In]

Could it be ..... Ameriquest, once the largest subprime lender in the country, who invented the unregulated stated income loan.

I'd never lie about a thing like that.

[bobbyp]

The filthy rich whiners in that article have had their way since Nixon slinked out out town.

They have birthed and benefited hugely from an unmitigated disaster of epic proportions.

And we are supposed to be grateful?

[Laura Koerbeer]

"In every industry the most common saying at the executive level is that a rising tide floats all boats."

So yoiu are saying that in every industry the execs deploy that selfserving crap to justify their selfishess?

I don't think every exec in every industry is that dishonest.

[CCDG]

"CCDG, no one here that I can tell is confusing you with Dimon and company."

Count,

I haven't really said anything about it but I don't like Dimon much. But I don't have to like them all.

[bobbyp]

Uh, lying lenders designed liar loans, right? Yes.

Ameriquest...who invented the unregulated stated income loan. Thanks for the info.

Am I lying or just plain wrong? Fortunately for you, neither.

;)

[russell]

good businesses make goods and services more vauable to the customer, thereby increasing market size.

I think this is often true. It's what I was basically getting at with this:

Sometimes excellent management or entrepreneurial insight can create demand - or, more likely, arrange things so that a latent demand can be satisfied - and in those cases you can make a good argument that a job was created where one simply did not exist before.

I'm not sure if that applies in the case of Home Depot, specifically, or not. I doubt it applies to the tune of 190K employees, and the 190K doesn't account for the folks who HD's innovations pushed out of the market.

All of which is sort neither here nor there, I'm not here to denigrate HD, they're just an example.

Look, the US is a very good place to be wealthy. I don't know any of the folks in the article personally, I can't tell you if they're good people, not good people, whatever. All I can tell you is that the statements they make in the article demonstrate little understanding of how profoundly privileged and lucky they are, and virtually no understanding of what life is like for the 99.99% of the people in this country, let alone the world, who don't hold the kind of wealth that they do.

It's off-putting. It has "let them eat cake" written all over it. I hope that is not very hard to understand.

My sense, personally, is that Phil and cleek have the gist of it. I doubt any of these folks gives much of a damn about what john q public thinks about them. IMO the public statements are positioning to further the political agenda of blunting attempts at regulatory reform.

Which would take it from off-putting to something more like a knife fight.

[bobbyp]

IMO the public statements are positioning to further the political agenda of blunting attempts at regulatory reform.

Could well be. But consider the recent internet meme about believers actually (shock and awe)BELIEVING.

Does that explain the look of surprise on the those heads you see on pikes?

Let us grant them their belief, but let us also be forthright in our conviction that their belief is utterly, completely, and irredeemably wrongheaded.

[Countme-In]

Not to put to fine a point on it, but this:

http://www.balloon-juice.com/2011/12/23/open-thread-matt-taibbis-xmas-festivus-carol/

Some say a rising tide lifts all boats.

Just wanted to add, with regard to sell-side Wall Street and the retail investor, the central question has always been "Where are the customers' yachts?"

Leading up to the financial tsunami of 2007-8, they were owned by the quants who navigated all of us via faulty nautical algorithms directly into the iceberg.

Off they scampered in the single lifeboat to collect their bonuses.

And the next time Grover Norquist brings your baby a toy boat to play with in the bathtub, I'd keep the door open and the baby monitor at full volume as Uncle Grover fills the tub.

With regard to the "political benefits of blunting attempts at regulatory reform", I believe this paragraph about neoconservative reactions to post-invasion looting in Iraq from Klein's "The Shock Doctrine" describes what we've been up against from the same people for some time on American soil:

"Some insight into why there was so little official interest in stopping the looting has since been provided by two men who played pivotal roles in the occupation -- Peter McPherson, the senior economic adviser to Paul Bremer, and John Agresto, director of higher education reconstruction for the occupation. McPherson said that when he saw Iraqis taking state property -- cars, buses, ministry equipment -- it didn't bother him. His job, as Iraq's top economic shock therapist, was to radically downsize the state and privatize its assets, which meant that the looters were really just giving him a jump start. "I thought that the privatization that occurs sort of naturally when somebody took over their state vehicle, or began to drive a truck that the state used to own, was just fine," he said. A veteran bureaucrat of the Reagan Administration and a firm believer in Chicago School economics, McPherson termed the pillage a form of public sector shrinkage."

Why do I think there's grainy footage somewhere from circa 1968 of college student McPherson haranguing make-believe Trotskyites through a bullhorn about the need to "liberate" the people's property in the ROTC building?

As to Agresto and America's attention to the creative destruction of Iraq's higher education system, Klein points out that in 1985 Iraq had the highest literacy rates in the Arab world -- 85% were literate.

In "Agresto's home state of New Mexico, 46 percent of the population is functionally illiterate, and 20 percent are unable do (sic) "basic math to determine the total on a sales receipt."

O.K., now I have to do a little last minute looting at the Mall, so may all of you find carbon sequestered in your stockings tomorrow for the good of humanity.