Submitted by: Mike Spindell, Guest Blogger
When I started as a college student about 50 years ago I took the Sociology I course as a required subject. There is little I remember from that course and less I remember about the instructor, except for his introductory words on the first day of class. To paraphrase him he said: “You will be taking a lot of courses in what are called the Social Sciences. Approach them all, including mine, with skepticism because they really aren’t science courses like those you’ve learned as a high school student. They will spend a lot of lecture time though trying to prove they are truly scientific, don’t believe them”. His clear meaning was that although the Social Sciences try to operate as if they are using the scientific method of experiments/research to prove theories, most of the work done is skewed to prove the theory of choice by those doing the research. In the five decades since that lecture my own experience and reading has taught me how true the advice from that long forgotten Sociology instructor is.
The social science that has my attention at the moment is Economics. I’ve read many an economist, from all points on the political spectrum and frankly while I favor those such as Krugman and Baker, I take most of what they say as opinion, rather than scientifically determined truth. Yes I’ve even read “Freakonomics” by Levitt and Dubner and the follow-up “Superfreakonomics” and while they were good reads I see them as not only bad science, but a conflation of economics with other social sciences that is superficial at best. This is really the problem with many economists and their theories. They presume to divine human behavior via the prism of economic theory. In the end their proofs are merely retrofitting their pre-judgments. That brings me to the “Austerity” movement which has hampered the recovery from the economic “depression” brought on by the wars and tax reductions of the Bush years, while it has also caused a crisis worldwide through its imposition upon many nations. The foundation research that has justified this “Austerity” movement came from two Harvard Professors: Carmen Reinhart and Kenneth Rogoff. A University of Massachusetts student Thomas Herndon found that their work was filled with mathematical errors in their research spreadsheets. http://www.huffingtonpost.com/2013/04/16/reinhart-rogoff-austerity-research-errors_n_3094015.html Their spreadsheets were their “proofs” that economic austerity promotes economic recovery and this theory, long held by many economists, is the basis for the imposition of austerity onto so many Nation’s economies and is the source of bitter national debate in our own. Though I will present some overview and links amplifying “austerity’s” false assumptions, my interest is in presenting my view on why the powers that be have imposed this doctrine, whose effects fall squarely upon 99% of the people of these nations, leaving the wealthiest unscathed.
Thomas Herndon with others published a paper about Reinhart/Rogoff’s findings stating this:
“ The new paper, by Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst, set out to reconstruct the findings of an influential 2010 paper by Reinhart and Rogoff, called “Growth In A Time Of Debt.” Reinhart and Rogoff, both of Harvard, claimed that economic growth slowed fairly dramatically for countries whose public debt crossed a threshold of 90 percent of gross domestic product.
The problem is that other economists have been unable to recreate Reinhart and Rogoff’s findings. Herndon, Ash and Pollin now say they were able to do so — but only by leaving out big, important pieces of data.
Using the same spreadsheet that Reinhart and Rogoff used for their research, Herndon, Ash and Pollin found that “Growth In A Time Of Debt” was built around a handful of significant errors. Correcting for those errors changes the findings dramatically: Average GDP growth for high-debt countries jumps from negative 0.1 percent to 2.2 percent.”
What we see then is that calculation “errors” showed that GDP growth for high debt countries actual increased rather than decreased. Reinhart and Rogoff (R&R) have been arguing that debt decreases GDP as the rationale for austerity and their argument seems not only unproven, but wrong. It gets worse.
The Harvard economists have argued that mistakes and omissions in their influential research on debt and economic growth don’t change their ultimate austerity-justifying conclusion: That too much debt hurts growth.But even this claim has now been disproved by two new studies, which suggest the opposite might in fact be true: Slow growth leads to higher debt, not the other way around.
In a post at Quartz, University of Michigan economics professor Miles Kimball and University of Michigan undergraduate student Yichuan Wang write that they have crunched Reinhart and Rogoff’s data and found “not even a shred of evidence” that high debt levels lead to slower economic growth. And a new paper by University of Massachusetts professor Arindrajit Dube finds evidence that Reinhart and Rogoff had the relationship between growth and debt backwards: Slow growth appears to cause higher debt, if anything.
As you can see from the chart from Dube’s paper below, growth tends to be slower in the five years before countries have high debt levels. In the five years after they have high debt levels, there is no noticeable difference in growth at all, certainly not at the 90 percent debt-to-GDP level that Reinhart and Rogoff’s 2010 paper made infamous. Kimball and Wang present similar findings in their Quartz piece.
This contradicts the conclusion of Reinhart and Rogoff’s 2010 paper, “Growth in a Time of Debt,” which has been used to justify austerity programs around the world. In that paper, and in many other papers, op-ed pieces and congressional testimony over the years, Reinhart And Rogoff have warned that high debt slows down growth, making it a huge problem to be dealt with immediately. The human costs of this error have been enormous.
Even after University of Massachusetts graduate student Thomas Herndon found Reinhart and Rogoff’s work included errors and that their 2010 paper was missing important data, the researchers stood by their ultimate conclusion: that growth dropped off significantly after debt hit 90 percent of GDP. They claimed that austerity opponents like Paul Krugman have been so so rude to them for no good reason.” http://www.huffingtonpost.com/2013/05/30/reinhart-rogoff-debunked_n_3361299.html
What is so infuriating about R&R is the destruction that follows in the wake of there now debunked theories. The unemployment in Europe is has reached record high levels high levels, countries like Greece and Spain have rioting in the streets and a new neo Nazi movement is gaining popularity throughout Europe. http://www.huffingtonpost.com/2013/05/31/eurozone-unemployment-record-high_n_3364881.html The cost in human suffering is incalculable, but these fatuous academic asses are not concerned with people, they are concerned with their reputations and they are concerned with catering to wealth. Their theories, rather than being the result of real research and experiment, are in effect self-fulfilling prophecies. This is NOT science; it is overweening egotism in tandem with uncaring self interest. This tale, however, gets worse. Huffington Pos contributor: Mark Gongloff wrote this article on Friday: “Austerity Fanatics Won’t Let Mere Economics Stop Them From Thinking They’re Winning” in it he writes:
“Like Hiroo Onoda, the Japanese soldier who hid on an island in the Philippines for 30 years refusing to believe Japan had lost World War II, austerity fanatics are never going to admit their failure. Instead, they are going to keep pushing the policies that are making millions of people in Europe and the United States miserable.
The latest example of their denial is a piece by Michael Rosen of the American Enterprise Institute, a conservative think tank, entitled “Austerity And Its Discontents.” He declares that, far from being shamed by the recent discovery of errors in influential research by Harvard economists Carmen Reinhart and Kenneth Rogoff, austerity fans have recently gained “the upper hand” in the global argument over austerity.
Rosen argues that Reinhart and Rogoff’s many loud rebuttals to their critics helped give austerians the “intellectual high ground.” He ignores that, in fact, Reinhart and Rogoff’s rebuttals have only compounded their errors. He also ignores that further research has debunked Reinhart and Rogoff utterly, revealing that their biggest mistake was in confusing the cause-effect relationship between high debt and growth. It turns out, contra Reinhart and Rogoff, that there is no evidence that high debt causes slow growth — in fact, the opposite might be true.
But then the austerians have never really needed the intellectual high ground. Their phobia of government debt is based mainly on the idea that debt is just bad because of course it has to be. It is bad when people take on a lot of debt, ipso facto the same thing is bad for government. We must eat our spinach, not our dessert!
Rosen is absolutely right when he points out that Germany, and the American Enterprise Institute, and the Wall Street Journal editorial page, and Michael Kinsley, and the many, many other long-time fans of austerity have only redoubled their efforts to push austerity measures in the wake of the Reinhart-Rogoff debunking and re-debunking. http://www.huffingtonpost.com/2013/05/31/austerity-failure-fanatics_n_3367787.html?ref=topbar
Now that I’ve presented the situation to you at least from my side of the fence, you can make up your minds about austerity. While I agree with many of the conclusions delivered by the writers quoted above my slant on it all is somewhat different. I believe that all economic theories and political theories, despite their validity, mask what is truly going on in our world today. It is easy of course to compare the call for austerity by conservatives under Democrats and the out of control spending and debt run up in the Reagan, Bush I and Bush II administrations. This comparison would lead one to believe there is fiscal hypocrisy at the bottom of this and that is true. However, the fiscal hypocrisy exist as much among Democrats as Republican’s as Max Baucus proved in his terms as Senator. Bill Clinton cut government to balance the budget. He aided in the erasure of Smoot Hawley and he hurt American jobs by signing NAFTA and CAFTA. President Obama has likewise played the fiscal conservative card, while complaining it has been forced on him. He has even put cuts of Social Security and Medicare on the table, although neither is related to the national debt.
What is happening here is the result of the wealthiest people and the largest corporations becoming international entities. The rise of the multi-national could well herald the decline and fall of the nation state. From the perspective of the “Haves” it makes perfect sense. Why be bound by the laws of a particular nation, when you can break free and roam the world as you please? Truly, to these multi-nationals and the people behind them, the world is their oyster. The only problems they have are government regulation, taxes and those pesky workers who want more wages. The solution is to bring the 99% to a level slightly above starvation. This ensures that they will work for any amount that helps them put some food on the table. It necessitates that social assistance programs be destroyed so the peasants will have no choice but to seek shelter from devastation at some low paying job that keeps them little above subsistence.
Imagine yourself as one of the Super Rich, or as the CEO of a huge multinational corporation. My guess is that most of them see themselves as extraordinary people, chosen by fate or God to be in their exalted positions. They are able to go anywhere in the world on a whim. They don’t have one palatial home they have five, some in the world’s greatest Cities and others in the world’s most beautiful places. They don’t have one luxury car they have twenty collectibles and a fleet of limousines to take them place to place, flanked by bodyguards. While it’s true some wealthy eschew these outward signs, usually it is done as some sort of reverse snobbery, like the Kennedy penchant for driving Oldsmobiles, or J.B. Hunt driving to work every day in an old Chevy, with a paper bag lunch prepared by his wife.
The rich are not like your and me and moreover they know it. The truth is austerity is one more step on the road toward worldwide feudalism. Our wealthy class has helped to plot this out and they are served by people like Reinhart and Rogoff as courtiers and henchmen. They are leading us to a chaos they believe will result in solidifying their hold on the world and their eventual Nobility. However, when chaos descends on society through the discontent of so many, even wealth might not be protection against the violent psychopaths that gain control. That’s what I think about austerity, what do you think?
Tony C:
I can tell you for a fact she did not worship people who only cared about money.
The biggest taker of money in this country is the government. And then the sociopaths in business come calling to do business with the other sociopaths in government. All to screw the little guy. And the regulations are what is allowing that to happen. The sociopaths in government make regulations which require the sociopaths in business to come and get favors. And in the end it is the sociopaths in both government and business who benefit from this system. And it is the sociopaths who promote this system because it benefits them.
The more regulation you have, the more the sociopaths can take. An honest man doesnt need regulations to chart his behavior. He acts with integrity because he respects himself and others. I believe the majority of people want to do good.
I believe our society in its present form rewards sociopaths and punishes decent people. Would a decent person sit on unemployment and scam the system while the single mother of 3 is going to work every day to provide his unemployment? Do people even understand that the government is not the one providing the benefit? A sociopath would take credit for anothers work.
My estimation is that there are far more sociopaths in government than in business.
A sociopath doesnt value his life, he just doesnt want to die. Bernie Madoff was probably a sociopath, look how well his life turned out. A dead son, a ruined reputation. He didnt care about his life all he cared about was getting money.
You will never understand the Aynish as long as you live.
“I can tell you for a fact she did not worship people who only cared about money.
The biggest taker of money in this country is the government.”
Bron,
You are wrong. Sure Howard Roarke was first an architect and cared more for his art than money, but intrinsically the way his character was written you knew that when he won out he would be rich. As for Galt and Daneskjold, both of them were portrayed as capable of the ultimate in entrepreneurship ship and Daneskjold got to run around in his own submarine. She didn’t like Dagny Taggert’s brother because he was a necessary plot invention to discredit rich people who manipulated government, but she lionized Dagny a rich little girl with no talent except to swoon in the arms of powerful men.
Thinking back on those plot-lines I can see the basis of much of what you write here. It is a pity that you are so moved by the work of a basically deranged writer, who wrote political, romance novels of the bodice-ripping variety. A novelist who pretentiously and unwarrantedly saw herself as a great philosopher, but in truth was only justifying her lack of empathy and tendency to manipulate people for personal gain. Sadly Bron, you’re better than that, but I think the Aynishness is now too embedded in you for you to realize its emptiness. I like you anyway. 🙂
Bron: Why would you sell a faulty product with your name on it?
I would not, but obviously some people would, and for profit. When did you grow up, with Henry Ford? In the modern world your business can change names for $200, if you ruin your reputation with one name, you can change it and have a new name tomorrow.
Bron: Do you not value your work? Your good name?
Again, we are not talking about me, we are talking about sociopaths; and no, they do not value their work or take pride in it or give a crap about their good name or what other people think: In business they care about money, only money, just money, nothing but money. I don’t know how many ways to tell you that; for them it is all about the money, and over 1% of people are born that way. Your hero, Ayn Rand, worshipped them.
Bron: Other people’s lives? You have to value your own life to value the lives of others.
No, sociopaths do not care about other people’s lives. and your second statement makes no sense: They can care about their life while holding zero regard for other’s lives. Valuing their own life doesn’t mean they value anybody else’s life. For a true business sociopath, they aren’t out to ruin your life, they just want to acquire anything you are worth and don’t care if that ruins your life. That is what it means, they feel no guilt or remorse and no empathy.
As are about 1% of all people, which means in the USA we have over two million adult sociopaths, and most of them are smart enough to stay out of jail, and most of them care only about themselves and money. Guess where those ruthless people without conscience, guilt or empathy end up to get money? Business, law, politics, and “charities” where by dirty tricks they can legally divert large sums of money into their own pockets. The fewer regulations you have on those practices, the more THAT 1% can take from the 99%.
tony c:
“Morality, charity, and being nice are deployed only for PR, they buy goodwill. Wasn’t that the fictional Galt’s philosophy?”
As I said, you know nothing about us Aynish. The true Aynish would no more sell a known defective product which would hurt someone than fly to the moon.
Why would you sell a faulty product with your name on it? Do you not value your work? Your good name? Other people’s lives? You have to value your own life to value the lives of others.
If you truly value your own life, why would you do harm to others for profit? In the end you lose, either through the loss of your soul/integrity or your reputation and your business.
Bron: Why would you work hard for years only to have it taken away from you because you knowingly caused someone harm?
You seem to have missed the point. If it is legal to prevent somebody from taking it away from you because you harmed them, why wouldn’t you do that? Why would you leave yourself exposed, if legally you can put a binding label on your product that says “Use at your own risk, manufacturer and seller can not be held liable under any theory of liability whatsoever.”
Bron: I think selfishness and every-man-for-himself IS the Aynish philosophy; but regardless of that, the attitude of at least 75% of the large companies I worked for and with was that they complied with the law, period. That’s it. Absolutely nothing more, and if they occasionally found out they were inadvertently doing something less, they would quietly stop but not volunteer anything about it; if the law does not require them to do something they will not do it.
Or to be more accurate, what they do is a cost-benefit analysis, as has been shown to be the case for some oil companies and coal miners, when their internal records are revealed by other lawsuits. If the likely profit for breaking the law is more than enough to cover the likely penalty (business and personal) for breaking the law, then they ignore the law.
That is what I expect of large companies, especially when run by non-founders from the Ivy League (but sometimes even if run by their founders). It is their job to maximize profit and minimize loss. Any conscience in performance of that duty is a liability, it creates unnecessary losses and leaves potential profits on the table in the name of being “moral” or “charitable” or “nice.”
Morality, charity, and being nice are deployed only for PR, they buy goodwill. Wasn’t that the fictional Galt’s philosophy?
tony c:
I dont blame a software company, I use engineering software but it is my responsibility to make sure it works right. I know the programmers do the best they can but they are human and an electronic glitch could cause a bad result.
I have a found one or 2 problems with structural software and am very aware of its limitations. That is why you should rely on hand calcs at least for a quick check of randome members or have a table you developed using hand calcs to check your answers once in awhile.
tony C:
when did that happen? It wasnt my crazy philosophy that did it.
If a company followed my philosophy they would test the chemicals they sold to make sure they were safe for human consumption and effective. A rational person doesnt knowingly make something for public distribution knowing it could injure or kill other humans. Why would you do that? In the long run or the short run, it is going to come back to you. Why would you work hard for years only to have it taken away from you because you knowingly caused someone harm? For a few extra pennies of profit per unit sold?
You know nothing about us Aynish.
Bron: But isnt that what happens now? A CEO isnt immune from knowingly doing something which physically injures another person.
On the contrary, if they were not prohibited by law, I suggest you look at any large company selling software in the USA, and the disclaimers they make absolving them of all responsibility of any kind anywhere for all time and in all parallel universes if any such parallel universes exist now or have existed or come to exist in the future.
If companies were allowed to do it, we would be required to sign a contract stating we would never sue them for product liability ever, as a condition of buying their product.
Regulation has to have the force of law and the punishment has to have a “most likely cost” greater than any “most likely gain” to be obtained by violating it. Otherwise, greedy people without morals or conscience will routinely risk sacrificing the lives and fortunes of others to make a buck.
Bron: As usual, you employ selective vision to ignore the cases that matter to people. All those “call me if you’ve been in an 18-wheeler wreck” stories are precisely what I am talking about: The lawyers are out for large rewards from insurance companies for commercial interests. They aren’t going to sue your neighbor for doing $1000 worth of damage to your yard and refusing to pay for it; if they cannot make a class action lawsuit out of it, they aren’t going to (on contingency) sue your insurance company for refusing a water damage claim (as I know, I paid an attorney to sue my insurance company over that issue, and they settled for everything I asked for, attorney’s fees and more — But I had to risk real up front money to sue).
What you see on TV, in order to be worth PUTTING on TV, is worth five or more figures to the attorneys. Why would anybody earning that much waste time on a small claims suit for under $10K?
Bron: why do we even have carcinogenic pesticides and herbicides?
Because of your crazy philosophy; they were invented and allowed to be used without testing them for toxicity because there was no law demanding they be tested before being used on food crops. They are still available on the black market, because they are still used in countries without an effective government, and because they are wicked effective, sometimes when nothing else is effective and the crop is otherwise going to be lost.
It is also the reason some would use them if they could; because they are desperate to save their livelihood and if a 1% chance of killing some random person with a weakened immune system is the bargain to be made, and they think they could hide their culpability, they would take that chance.
tony c:
why do we even have carcinogenic pesticides and herbicides?
TONY C:
hospitals used to treat the poor in emergency situations and then send them to the public hospitals even before laws were passed. People were not piling up like cord wood in front of hospitals 60 years ago.
I have been in the emergency room many times in the last 20 years with my daughter and I dont see many car wreck patients coming in but I do see a bunch of people with colds or some other minor health issue using resources that should be used to help the truly sick and injured.
Just like everything the government does, the law was probably passed because a few people were turned away by nasty people. Just like we see today on, for example, gun violence. The knee jerk reaction is to ban all fire arms when in fact it is mentally ill people, children on drugs doing the shootings of which there arent many. So pass a law without any consideration for anything except politics.
Fantasy, smantasy, I read every day in the papers where people bring class action lawsuits, I see the advertisements on the TV, lawyers trawling for business and good for them.
If I was a lawyer I would go after people who disregarded safety of individuals for profit. I would do it with righteous indignation too. But I would make very sure there was malfeasance. I would not be involved in suing a tobacco company, if you are stupid enough to smoke after the last 40 years, well I guess you need to take responsibility for whatever happens.
Now if you buy a circular saw and the company knowingly used blades with defects which cause the blades to shatter in certain circumstances, then you deserve large compensation if you are injured badly and the company should pay penalties and the CEO should go to jail. But isnt that what happens now? A CEO isnt immune from knowingly doing something which physically injures another person.
We dont need to pass a law regulating the fabrication of saw blades.
Bron: And what is the objective science for determining whether some employment requirement amounts to coercion or not?
An robber may give you an ultimatum phrased as a choice, “your money or your life.” But it is not really a choice, either outcome is unacceptable. It is coercion, because harm is inevitable either way.
You know perfectly well the same thing is happening when a hospital charges you $250,000 for preventing your death due to a car accident. Your money or your life. They do not consider if you can recover it from somebody else, or insurance, or charity, if you end up losing everything you own, that does not have to enter into their spreadsheet computations of maximum gain out of your lack of choice and desperation.
Likewise, not all harm can be traced to the source. We may implement a ban on carcinogenic pesticides based on good objective science. But the only way to enforce that ban is through inspection at the point of application; once the corn or wheat or potatoes have been processed and bagged, there is no way to tell which kernel came from which farm, and there is no way to tell, once you have colon cancer, exactly what you ingested that gave you colon cancer, or even if it is the result of ingestion six months ago, as opposed to a natural mutation due to a stray cosmic ray.
The only practical way to regulate carcinogenic pesticide use is a regime of inspection and testing while the responsible party can still be identified. We cannot wait until harm is done, and that is true of many, many forms of harm.
Your philosophy relies on an impossible-to-achieve trail of information to trace harm back to a specific responsible party with enough confidence for the court to convict. It also relies on a fantasy that such parties will have something to compensate you for your loss, and it also relies on the fantasy that the harm done to you leaves you in full possession of your mental faculties, energy, and resources needed to prosecute a case.
As for lawyers, not all cases of harm rise to the level of class action suits, and I know from experience it can be impossible to find a lawyer willing to take an individual case of harm on contingency if they do not think the damages will be large and an award fairly certain. That leaves lawyering for a fee, and that in turn means many harms go unpunished because only the relatively wealthy can afford the thousands of dollars it takes to pay a lawyer to file such a lawsuit.
tony c:
the courts are there to, ostensibly, protect the people. For example, I see nothing wrong with setting an objective [through good science] limit on arsenic in something. If it goes over that limit use the courts to punish.
There is no shortage of lawyers willing to wage class action lawsuits.
One wonders what took them so long?
http://www.huffingtonpost.com/2013/06/06/grand-bargain-center-for-american-progress_n_3393895.html
Bron: I am for a free market regulated by an objective court system.
That is an incoherent statement; a “free market” is not regulated by definition. You are either for a regulated market, or for a free market, you cannot be for both, any government regulation whatsoever transforms a free market into a regulated market. The court system is an instrument of the government.
If you are babbling about “contracts,” contracts are not regulations; and you are engaging in Aynish redefinition of common words to make what you support sound reasonable, when it is not. Only something with the force of law is a regulation, and if one only relies upon contracts, then one ends up with the same exploitation of asymmetrical power as we have seen used throughout history by the wealthy to oppress the poor. It has always been the equivalent of armed robbery: Accede to our conditions and demands or go ahead and die; that is your “choice.”
tony c:
I am not for a regulation free market. I am for a free market regulated by an objective court system.
I cannot soil my neighbor’s well, I cannot kill a family with a known defective product and chock it up to experience. I cannot provide spoiled meat to my customers and make them sick and think there will be no consequence.
Bron: The truth, Aristotle’s Golden Mean, is somewhere between the 2 ideals.
I agree with that. Actually I agree with many of the justifications that are typically rolled out for the free market, I just do not believe a regulation-free market can accomplish them.
I agree that competition can drive down prices and produce innovation, but a regulation-free market assumes people allowed to compete in any way they like will, for no comprehensible reason, choose to compete only on product prices and features, when the truth is that it is far easier to compete with lies, subterfuge, dangerous corner-cutting that saves on production, exploitation of workers and stealing the value of their labor because their emotional attachments to local family and their reliance on non-liquid assets like homes and familial land leave them no plausible choice.
Competition is a great tool of refinement when the competition is restricted to the five dimensions of marketing (cost of ownership, quality or reliability, customer service, guarantee, and reputation or cachet).
Competition is an ugly thing when it strays into deception, coercion, and predatory pricing (e.g. temporarily below cost to drive competitors out of business, or too high to exploit a local monopoly or desperation of customers without choice, as in the E.R. or ICU). Deception can include false advertising, bait and switch, lying to investors, workers, and suppliers.
The ills of non-product competition are simply not corrected without regulations; all those activities have been engaged in because they are effective for creating profits, and more effective (and easier) than competing on the product. Building a better mousetrap and convincing people to buy it is hard, risky, and expensive. Inspiration can be hard to come by. For a big company, recognizing a better mousetrap created by somebody else, and then stealing it and using their far greater economic power to starve them out and crush them in their crib is much, much easier with less risk.
MIchael M: After so much of anything, any more of it simply bores.
Funny, then you proceed to ignore your own premise. If it were true, then the same would be true of ostentation itself, wouldn’t it?
You speak of rich men as if you have never been close to any of them; over a twenty year consulting career I have been in reasonably close personal contact with, all told, about thirty individuals worth between fifteen million and two hundred fifty million dollars, all rich enough to never work another day in their lives and still live as the elite.
Ostentation is a hobby, not a reason for being. To illustrate with an example, Mitt Romney earns around $21 million per year. Now he does that without working, it is all investment income managed primarily by others. However for comparison, pretend he was working a 40 hour week, 50 weeks a year like a typical American: His wage would be $10,500 per hour. A $100 bill to Mitt is about 34 seconds of work, so yes, he can squander that lighting a cigar for the momentary shock value of ostentation. And for Mitt, where the typical worker might challenge somebody to a $20 bet (an hour’s wages) over a point of honor, Mitt can challenge somebody to a $10,000 bet over a point of honor, as he did in one of the debates.
But I am certain Mitt is not out there trying to waste $84,000 a day (his ‘wages’) trying to impress people, if he were, the media would be telling us about it. The same would be true of all the other people with more money than they need, and in my personal experience with a few dozen, I haven’t ever seen it. The big things others might find “ostentatious” have real utility (and often have resale value); their cars, yachts, aircraft, buildings, jewelry and homes and tracts of land. Ostentation is just a hobby they can afford, but it seldom eats into their core capital, and seldom even puts a very big dent in the profit stream.
There are ego-driven expenses, certainly. I think the political bids of many rich people fall into that category, including Romney, Perot and Forbes. But they did not try to achieve those with wasteful ostentation, they tried to achieve those as business people self-funding an all-business campaign.
The dumb rich tend to get fleeced, and what is left is that most of the very rich are reasonably smart (even if sociopathic). They know that wasteful ostentation doesn’t make a lasting impression in modern culture; the shock and awe that impressed medieval peasants now smacks of stupid waste and is regarded by a majority of Americans with derision; they know enough to understand that wasteful ostentation is a symptom of an ugly, self-indulgent, greedy, hedonistic, boastful personality that nobody really likes. We understand much more about how the world and people work than medieval peasants did, thanks to media delivering many thousands of times more information about it, which we study about four hours a night.
What Americans expect from wealth now is at least the appearance of taking the wealth in stride, of being a common man that happens to command wealth but is not wasting their money on pointless extravagance. Bill Gates is admired (at least among those that do not know of his despicable business tactics), Donald Trump is ridiculed for his posturing ostentation (even if you do not know of his many truly idiotic failures).
Ostentation and waste are not the driving factors behind war. The point isn’t to waste wealth at all, the point is the opposite, to increase it. The oligarchy you speak of is dead, in modern America what distinguishes the elite from the proletariat is wealth, and to a lesser extent, political power and celebrity (in the original sense of being celebrated, liked and admired). Any waste that decreases personal wealth (without increasing political power or celebrity) is counter-productive, anything that increases personal wealth or political power is welcome.
Wasteful ostentation is no longer a very good route to celebrity, it is more likely to be resented and laughed at as pretentious posturing. Being a joke is not what the rich seek. If they seek approval of the masses, they want admiration for their benevolence.
In deference to Gene’s observation, I will qualify this time: What drives America to war is profits, pure and simple.
My personal opinion is that has been true since the transition after WWII, culminating in the assassination of Kennedy, to an increasingly fascist political structure dominated by the corporate industrialists seizing control of the post-WWII world-wide economic environment.
What you fail to realize, and Orwell’s novels fail to capture, is that human labor produces wealth, and with technology, exponential wealth. The objective of the rich is not to waste that, it is to collect as much of it as they possibly can. Your philosophy, and Orwell’s, ignores that fact, labor and intellectual accomplishment create value.
The contest is not for prestige, it is for wealth, and taking as large a share of the constant river of wealth creation as they can. That demands fascism, to achieve as close an approximation to slavery as they can get without violent rebellion, so people will produce wealth for them without costing them much in taxes, benefits or salary, and so people can be discarded without responsibility when they are no longer economically productive.
Their goal is to use us as tools to be discarded when we break, while telling us hard work and sacrifice builds character (but not theirs), and if we work hard enough we can join their ranks (but not really, because ‘hard work’ is almost never how they got there.)
As Mike Spindell has said, their goal is a new form of feudalism (of a far more brutal and demanding nature than the old feudalism, in my view).
Mike Spindell:
“Bron,
My guess by non-partisan you mean conservatives that agree with you? Because seriously Bron your beliefs are fact based, only in the sense that you will only accept facts that meet your pre-judgments. Anyway, here goes:
http://pnhp.org/blog/2013/02/19/important-what-are-medicares-true-administrative-costs/
http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/
I suspect though you would prefer a report by the “pristinely”, non-partisan
Heritage Foundation. Never let the facts get in the way of your suppositions.”
Those 2 links are every bit as partisan as you think the Heritage Foundation. The link(s) I provided were from the Cato Institute, which I have seen you quote from and comment favorably, I guess my mistake.
While I disagree with the philosophy, if national health insurance would provide better value and lower cost, I would entertain the idea. But the history of single payer is not a pretty one.
I have learned a good deal by interacting with you guys, I dont really consider myself conservative. And I have come to understand what you mean by the dogmatism of some Aynish, I see it when I read their blog posts. Not all but some are as you say.
With that being said, there is also a good deal of dogmatism on the left and much of the same style of thinking albeit directed in a different direction. Most of you are in lock step and it is funny to watch you argue with each other over miniscule variations. Much like the Aynish do over trivial nuances about their philosophy.
The truth, Aristotle’s Golden Mean, is somewhere between the 2 ideals.
Oh yeah, government as constituted today is just one big cuddly teddy bear.
How many politicians have become multi-millionaires in government service? And that just for starters.
How much money wasted on Solyndra and other pet projects of friends of politicians?
As I said, there is a whole lot of sociopathy going on. As I have said before only sociopaths would like a system where money is taken from the people who work hard for it and given to other people. It is a sociopaths dream come true, theft without any consequence. And all done legally. Only sociopaths would come up with a system like that. And the even better part is that they[the sociopaths] get to work in the system and take most of the money that is supposed to go to people in need but they spend it on themselves for lavish parties in Vegas, “training” sessions in paradise, expensive furniture for their offices and other “percs” of predation.
And all the while they say “those poor people, they need our help.” And to top it off, the other sociopaths, those who run big corporations, are right there with them figuring out ways to screw the public by working the system with their kindred sociopaths. Big government sociopaths and big business sociopaths all aligned in a malignant cabal to ruin the middle class and poor. Big government is big businesses enforcer, they [government] take money from the working people and distribute it to their friends in big business and give crumbs back to the people they took it from.
The left perpetuates this system of modern Robin Hoodism, they take from the productive people and give to, instead of a king, big government and big business. They give back some of the people’s money in the form of roads, public education, etc., just enough to keep the people satisfied and dependent to perpetuate their system of thievery.
And all the while the government prints money to steal more from the people without their direct knowledge. Oh yes, there are plenty of sociopaths to go around, they all believe in redirecting the personal industry of individuals to government and big corporations [who are friends of big government] while they say they are doing it to help the poor and middle class.
“The left perpetuates this system of modern Robin Hoodism, they take from the productive people and give to, instead of a king, big government and big business. They give back some of the people’s money in the form of roads, public education, etc., just enough to keep the people satisfied and dependent to perpetuate their system of thievery.”
Bron,
My hat’s off to you for being able to express the same ideas over and over again without offering one shred of proof as to their accuracy. You are truly a disciple of Rand and Von Mises, since they shared the same talent for empty pontification. 🙂