Greed isn't good. (or: The Ayn Rand/Mike Boolmberg non-exclusivity)

So says Collin Ferguson about Bernie Madaoff (see below) debacle, but specifically about the lacking in goodness of greed--despite the claims of Michael Douglas (see above).

In a rare defense of capitalism (of course, I recently gave a equally rare applause to capitalism), late night or otherwise, Ferguson reminded everyone that its guiding principle need not be greed, rather, "the money goes here, goes there," not to be hoarded up by a few. And though at first naive sounding, he's actually right.

In reality, that's exactly what usually happens. That's why trickle-down doesn't work as a stimulus--the rich are the only people that can afford to hoard monies received via tax breaks and not spend it in the economy. Middle and working class folks don't have the same luxury, they must spend.

I barely remember the banking meltdown of the late eighties; Wall St. mishigos and a housing bubble, then as now, was mostly to blame if not totally responsible for the mess. It was probably the first time I thought of a bank other than simply a place to keep money, ostensibly, safe. What I learned is that they weren't completely safe, actually.

I do remember the FDIC, and the little plastic plaques that were stuck up on the cold marble or bullet proof glass--depending on the neighborhood--that stated how individual savings accounts would be covered up to $100, 000. It seemed like a lot of money, at the time, and still does.

Of course, recently, the limit of protection has been increased to $250,000--for the rest of the year, anyway. So, if you have greater than $100, 000 and less than $250, 000, you'd better hope your bank fails by December 31st.

Well done, competitive markets, well done.

Possibly under the influence of the economics class I'm in, or maybe I'm just starting to feel bad for capitalism, I was thinking how cool my new phone is.

After generations of iterations of phones (really, it's only been about ten years since cell's have taken over--crazy, right?), the fruit of all the R&D by all the different cell phone makers has come to, well, fruition.

We are now at the beginning of a new epoch. In it, everyone, where industrialized, can be connected at all times (towers permitting) to each other and to all the information available, from now on, forever. Indeed, touchscreen phones will be an important part of this process.

Anyway, to the rare applause for capitalism:

It's thanks to all these corporations, trying to get even just a piece if not big ol' chunk of the market for probably the most widespread technology on the planet, that constant innovation and resultant extreme variations in phone technology. Finally, whittled down are all the ideas and designs that didn't work, at least as well, and what was left was the iPhone.

Even non-touchscreen phones, like mine, have gotten pretty cool and, more importantly, user friendly in both hard and soft-ware. Now we essentially carry around internet-connected PC's in our pockets and bags.

So, thanks capitalism.

Only what's good for the cell phone isn't always good for other things, like utilities and health care. For those two and a few others, I'd like to say, no thanks.

(Thanks to Mikila and her sister, the latter of which got banged up along with the poor iPhone above--luckily not nearly as bad. I hate to say it, but it doesn't look good for the phone.)

Here, in the Empire state, it comes down to this.

When you have various union groups rallying outside City Hall that, for the most part, are there to yell at rich people, as a group, there's a problem. No strangers to giving grief, the unions usually frame their contention as labor to business, not just the rich. For them it's usually not a class issue, only a function of who they have to deal with, capital. Unions exist for the taking to task of capital that either doesn't respect them (the unions) or, more importantly, play within the rules of the past fifty years of labor/management relations.

And so, the rich (however you define that) are just going to have to step up and appease the mob. It would have been nice if it had not come this. But, here we are. Some people, who up till now have pretty much had economic free reign, are going to have to pay a little more.

A little--what many New Yorkers consider to be a fair share, like the group Fair Share Tax Reform, who argue for a "shared sacrifice" in these bad times by those who profited during the good. Government spending and services will be cut this year, how drastically is still in question. Major cuts in jobs and services vital to all those but the rich, doesn't seem very fair to me.

The "little" part is important because politicos tend to think and talk about these things in absolute terms: innovation-starving socialism or entrepreneurial-friendly capitalism, limited (ineffectual) or big (wasteful) government, progressive (distributing wealth downward) or regressive (distributing wealth upward) taxation, and most importantly, chocolate or peanut butter.
Fortunately, much like Reese's Peanut Butter Cups lovers, you don't have to choose; you can have both or something in between. And, despite all the evidence to the contrary by temper-tantrumed TV-personalities and on bickering blogs, most people aren't as polarized either.

Most of the "rich" aren't going to move out of the state, decreasing state budget revenue, because of slight shift in the tax burden--the argument made by the conservative politicians in NY, and abroad, who rail against a so-called "Millionaires Tax," which would go a long way to mind-ing the billions of this year's budget gap.

You're telling me that some multimillionaire, nay billionaire is going to move 50 or 100 or more miles across state lines, away from friends and family and workplace, to save a few thousand dollars? Just because something is the best deal, doesn't mean it's the best deal. For those that do move: screw 'em--is that the kind of people we want as fellow state residents?

That goes for corporations, too. As when lamenting the loss of companies and jobs to lower taxes and wages in other countries, the same ballyhoo is proffered up by states for keeping corporate taxes low and the minimum-wage stagnant--the retention of businesses in the state. (A similar idea of "retention," of the "best and the brightest" by AIG, is being batted down as I write this. Though I don't think the AIG guys are an example of when a company would actually want to keep good employees--obviously they weren't.)

This diaspora-paranoia about businesses exodus from traditional sectors in America's industrial complex, from the 70's onward, isn't without basis in reality. Historically, far from it. But that's for increasingly fewer types of industry, like car manufacturing and textiles. Instead of trying to revive or keep alive old industries, we should incentivize technology (for example, alternative energy r&d) and explore new business models, such as public/private partnerships.

(It's key that historical processes, while true of a particular time and place, are not absolutes binding human behavior, that we must structure our lives and world around. Rather, in a more reciprocal relationship, as we structure society to fit our wants and needs, so too those structures influence and shape us. This is a good thing. It allows room for change and, maybe, progress.

With no disrespect to Mr. Wiesenthal, I think it takes more than simply remembering history to avoid repeating it: a contextual reading of that history is necessary. Too, an unnuanced look backward can engender the repetition of past mistakes, as recurring behavioral patterns can develop within contiguously similar contexts. How can someone be expected to stop fighting back when they keeps getting kicked in the face, even if they know their fight is futile?)

The following paragraph is from Paul Krugman this week, about what school teachers in my home town are doing to help out the school system, their workplace. It's something that's actually crossed my mind recently. But feeling foolish in its simplicity, I hesitated verbalizing the idea:

"The schoolteachers here [Montgomery County, MD], who make on average $67,000 a year, recently voted to voluntarily give up their 5 percent pay raise that was contractually agreed to for next year, saving our school system $89 million — so programs and teachers would not have to be terminated. If public schoolteachers can take one for schoolchildren and fellow teachers, A.I.G. brokers can take one for the country."

That's the sprirt--taking one for the team!

So, take a lesson Wall St.--even if it isn't the financial capital of the world anymore, or even the country, according to Ian Bremmer on WorldFoucs, a PBS program, recently. Still, they are a significant part of our tax base, and, even in these times of dwindling bonuses and expense accounts, and populist rage, they aren't people we have to run out of town.

Besides, when the alternative is a fiscally hand-tied government, with extreme cuts to health care, education, and unemployment, who could live here besides the rich?

Geitner opens up to Charlie

Increased taxes on top 5%: modest, 2001 size, so that gains more broadly shared--like the productive 90's.

Responsible budget. council of economic advisers, independent. careful.

Slowly: recovery period, starting this year.

Automobiles. let'em go bankrupt? half not their fault. not tenable.

Responsibility and obligation, he feels, to fix this (after all he was head of the federal reserve up here while this was all going to hell). yet they were aggressive. hm.

Capitalism's already drastically different. a cleaning out of excesses, looking forward; rules enforced fairly.

the Will to do. acting, action, keep at it.

---

Charlie was somber tonight.

A confidence game.

If it's really true, as I've always felt, that certain "free" markets--financial "instruments" and money maneuvering, things other than banks lending money--are a racket, then it gives one pause: the thought that feeding the injured pit bull might not be the best thing for the rest of us.

Sure, tax breaks to those that will spend or create jobs; infusion into infrastructure and incentivize technological research. But blindly recapitalizing institutions that screwed us once (really more than once) already? Well, then, doesn't it seem a bit counter intuitive to let them do it again? Why can't we just take them over? We're the only game in town now, seemingly, anyway.

The government is the one thing that can give a sense of certainty, security for these "toxic" assets. Part of the reason they're worthless is because of the institutions that are holding them. Either off their heads (!) and replace them with new ones, or at least down with their salaries--they're bitching about the need for bonuses to be given and high salaries paid to keep these people on; why do we still want them?

But even for those who didn't take part in the bailout and still have had a bad year(s), what about the financial responsibility to the stock holders? What about stockholder responsibility, the risk involved in investing in the all this stuff, for that matter? Or those who choose to work in finance, in the first place. They're all geniuses who worked hard for all that money; but now that they've lost it all, it's not their fault? Capitalism when the economy's good and socialism when it's bad.

Seriously though, right now, it's just bad p.r. for any company or Wall St hack to seem too indulgent. And if you do take money from the government, serious money, than you have to show what it's going towards. And though, yes, you do have to spend some on salary, keeping people employed--it was a bad year! They're lucky to have a job at all. A lot of sectors of the economy are bad, at no fault of their own, but Wall St. actively took part in causing, nay creating this aggregate-mess.

All nationalizing has to be, and this is without heavy new regulation, is more stringent oversight. Until we get some people in there (the administration, regulatory agencies and Congress) that actually know what's been and is now going on, forget about being able to watch over people on Wall St. if we just throw a bunch of money at them, uninformed and unconditionally.

Paradoxically, that's exactly what you have to do if you're in the private sector, they say. It's called incentive. But if you're the government then it's pork; throwing good money after bad. You need to pay the most to get the best people, so it goes, but then why doesn't the government compete, and do the same? It shouldn't, it can't, they say. And they're right that it can't--but only because government has been handicapped from doing so by the very belief that it shouldn't.

No, the government will never do better than the private sector in recruiting talent unless it becomes cooler to be in government. And if that's not done through higher salaries, a sea change in the priorities and value systems of our "best and brightest" (like viewing public service on par with owning a Hummer) is needed to engender more competition with the private sector. It's possible.

At some point, the money involved in most of our lives become such abstractions that things like greed and values can become so too. Economic-greed is trope of American life, and as such is well ingrained. Though irremovable completely, competing narratives have and can actively shift the money-greed paradigm--see radicalism, cults and religions. To what? Maybe we'll find out.

Anyway, it seems to be the sentiment of the new guy, Geitner, that the TARP money was given out too casually the first time around, and he won't make the same mistake.

I know: some greed is good; needed for the financial system to work more efficiently. But, that only greed need be, or even should be the sole economic sphere of the culture, well, that's just too narrow a view.

People speak easily of patriotism. To me that implies belief in the at least the possibility that government can function for the benefit of people; and in a creative, inventive, proactive way, not just serve a restrictive, conservative function. Where's all that American ingenuity? This has to be about more than a bastion of freedom and liberty, abstract though still compelling ideas, that's even part of simple anarchy.

Institutions. Physical, problem-solving, groups of people, formed by a elected, representative government.

We're supposed to be about more than just a playground for the smart and strong and lucky--the rest be damned. Fuck that. People are pissed, like 1789-French style. Rich is going out of fashion. Maybe.

Privilege is fine; too much is not. How then is that to be determined? Well, I recommend not waiting until the mobs start tramping down the gates of private sub-divisions.