Quotulatiousness

January 10, 2012

What a difference a decade makes

Filed under: Economics, History, USA — Tags: , , , — Nicholas @ 10:53

Megan McArdle reports from her business school’s ten-year reunion on the fates of her fellow MBA students:

It was my 10-year reunion at the University of Chicago Booth School of Business. Obviously I wanted to see if people had gotten fatter, balder, and wrinklier. (Surprisingly, not really.) But I also wanted to know what had become of us, and our careers.

Ten years ago, we graduated into a country where the Twin Towers were still standing, Webvan was a going concern, and the unemployment rate was 4.5 percent. Many of us headed to New York or other cities to become what Tom Wolfe, in The Bonfire of the Vanities, called “the Masters of the Universe” — the financiers who can earn lottery-size sums on a single deal. Others went to Silicon Valley start-ups, or became the consultants who worked with them. I couldn’t find anyone at the reunion who admitted to trading dodgy residential mortgage-backed securities, but we participated in all the other madness of two decades of financial froth—and got smashed in two crashes.

We weren’t the people who inflated the bubbles; we were the ones hired, and then fired, by those people. We were the ones who happened to be standing next to the guy who was pushing the buttons when everything went to hell.

[. . .]

I have a theory about what happened to us, and our nation: when too much money is piled together in one place, it starts to decay, and as it does, it emits some sort of unidentified chemical that short-circuits the parts of your brain controlling common sense. When my class matriculated in 1999, ads for a firm called Discover Brokerage featured a tow-truck driver whose passenger notices in the cab a picture of the home — an island — that the driver has purchased with his fabulous online-trading profits. The passenger looks taken aback while the driver muses, “Technically, it’s a country.”

What’s even more amazing than the fact that this ad was ever made is that this sort of triple-distilled balderdash could intoxicate a large group of very smart people at one of the nation’s top finance schools.

Oh, don’t get me wrong: none of us was simpleminded enough to take those ads literally. Oh, ho-ho, no, not us! No, we made only the most erudite and sophisticated sorts of mistakes, like gang-rushing banking internships, and telling ourselves we were “consumption smoothing” as we used student loans to finance vacations. Believe it or not, many of us talked frequently about the echoes of 1929 — but we still didn’t necessarily act on that insight, as the markets cratered in the early 2000s.

For my summer 2000 internship at Merrill Lynch, I chose the technology-banking group despite having watched the March 2000 NASDAQ crash from the lobby of Merrill’s auditorium, where we were supposed to be undergoing orientation. Ignoring the helpless, angry flapping of the HR staff, a bunch of us spent the afternoon telling nervous jokes and watching the eerie flicker that billions of dollars give off when they evaporate on live TV.

Parents (absolving themselves from any responsibility) want Ottawa to solve child obesity problem

Filed under: Cancon, Government, Health, Media — Tags: , , — Nicholas @ 10:27

Parents who fear to let their children go outside want the federal government to magically fix the problem the parents have created:

The majority of parents believe they play a major role in whether their children are overweight, but many also want the government to build more recreation centres.

[. . .]

The survey done by Ipsos Reid talked to 1,200 people, and most feel obesity is the leading health issue facing children today — more so than drugs, smoking and alcohol.

The survey found that 61 per cent of Canadians don’t think Ottawa is doing enough, and 70 per cent strongly support government initiatives that would educate children on healthy choices.

If you don’t let your children go outside unattended (hence the desire for “recreation centres”, where the little snowflakes will be supervised at all times), they won’t get as much exercise. Without exercise, on a typical modern diet, they’ll gain weight. Having gained weight, they’ll be even less likely to voluntarily exercise. Rinse and repeat for 18 years.

When “everyone agrees” about excessive executive pay, something else is being sold

Filed under: Economics, Media, Politics — Tags: , , , , , — Nicholas @ 09:45

Tim Black on the amazing unanimity of thought that the most pressing problem in the world right now is big pay packets for corporate CEOs:

Occupy London, the Labour Party, the Lib-Con coalition, the Archbishop of York… It doesn’t matter to what or to whom you look, you’ll find the same simple-minded sentiment: the root cause of our economic and social problems is greed. The greed, that is, of bankers, of overpaid CEOs, of those at the top of society who simply have and want too much.

[. . .]

If there was ever a striking indication of the deadening political conformism, the dearth of social imagination, that so characterises our contemporary impasse, it is there in the sheer ubiquity of the Greed-is-Bad argument.

So what is driving this pervy, across-the-board obsession with the pay packets of super execs? It’s certainly not impelled by a desire to get to grips with the economic crisis that holds most of the developed world in its grip. No doubt there are some simple-minded souls in a state of Occupation who believe that blaming and bashing company CEOs or bankers is somehow to understand the economic crisis. But just as the remuneration packages of a few bankers and bosses did not bring about the current crisis, so seeking to limit their wages, to impose a maximum national wage, will not solve the crisis. And while £3million or £4milllion for a CEO’s annual salary does seem huge, such figures amount to very little in the grand economic scheme of things. As the Investor’s Chronicle points out: ‘The average FTSE 100 CEO is paid £3.9million year. But this is only one four-thousandth (0.025 per cent) of the average market capitalisation of a FTSE 100 company.’

The current fashion for attacking large pay packages, then, is economic neither in impulse nor intent. Rather it is driven, in the first instance, by a narrow moralism. For its numerous proponents, either in party offices or in spartan tents, it represents an easy posture, a cheap critical pose. One Guardian columnist virtually gave the game away: ‘Like phone hacking or MPs’ fiddled expenses, this is an issue that only needs to be described to seem reprehensible.’ That is, to the right-thinking types on liberal broadsheets, criticising large salaries is just too good an opportunity to miss. Indeed, like attacking tabloids and MPs, it is a mark of one’s membership of the right-thinking to have a pop at the really, really rich.

But there’s a deeper, darker impulse driving this cheap attack on exorbitant pay packages than just preening self-righteousness. And that’s the belief that the large pay packets pursued by the undeservedly wealthy are a symbol of a society-wide pathology. The cheap attack on top earners is also an attack on the material aspirations of the rest of us. We are, in short, just too greedy now to be left to our own unregulated, uncontrolled devices. A report from the High Pay Commission — a grandiosely monikered body established by centre-left think tank Compass, a few trade unionists and business secretary Vince Cable — makes this clear by drawing the highly questionable link between this putative celebration of ‘greed’ — or ‘an elevation of the concept of the rational self-interested man to unprecedented heights’ — and the August riots. ‘It should not perhaps surprise us’, the report states, ‘that the rioters took the trappings of wealth that they could not afford — the TVs and designer trainers. It reflects a sense of entitlement that pervades society from the very top to the bottom.’

Scottish independence on the front-burner

Filed under: Britain, Government, History — Tags: , , , — Nicholas @ 09:31

An interesting summary of the independence debate in Scotland from The Economist:

Put up or shut up. That is the risky (but arguably rather canny) message that David Cameron has sent to the pro-independence head of the Scottish devolved government in Edinburgh, Alex Salmond. Specifically, Mr Cameron has announced that the British government and Westminster Parliament are willing to give Mr Salmond the referendum on Scotland’s future that he says he wants — as long as it is a proper, straight up-and-down vote on whether to stay in the United Kingdom or leave, and is held sooner rather than later.

It is not that Mr Cameron wants to break the three hundred year old union between London and Edinburgh. Both emotionally and intellectually, he is fiercely committed to the union as a source of strength for both Scotland and Britain, insist Conservative colleagues who have discussed the question with him. Publicly, he has pledged to oppose Scottish independence with “every fibre” of his being.

But Mr Cameron and his ministers also feel that Scotland has been drifting in a constitutional limbo, ever since Mr Salmond’s Scottish National Party (SNP) won an outright majority at Scottish parliamentary elections in 2011 (a feat that was supposed to be impossible, under the complex voting system used in Scotland). The SNP campaigned on a simple manifesto pledge to hold a referendum on the future of Scotland. But after his thumping win Mr Salmond slammed on the brakes and started talking about holding a consultative vote in the second half of his term in office, ie, some time between 2014 and 2016.

Political geometry

Filed under: Economics, Government, History, Liberty — Tags: , , , , — Nicholas @ 09:16

L. Neil Smith on the inadequacy of “left” and “right” to properly describe the political spectrum:

When I took my one and only Political Science course in college, in 1966, the instructor told us that when certain opinions show up in the polls he and his colleagues conduct — chiefly those of admirers of Ayn Rand, or followers of Henry George — their opinions have to be thrown out, since they don’t fit anywhere on the traditional political spectrum.

This is science? When the data refuse to fit the model, throw out the data, rather than the model? If this is “science”, it’s exactly the same “science” that brought us Global Warming. And it is from at least forty years of corrupt, lazy, irresponsible academics like this poli-sci instructor that we get our present generation of news media “personalities”.

Let’s throw out the model, instead, and see what happens.

Imagine a triangle, with a lower right corner, a lower left corner, and a corner, or apex, at the top. Even at this stage — when the picture is far from complete — such a diagram comes closer to representing the real shape of our political landscape than a simple line.

Label the right-hand corner paternalistic. Those who occupy this corner, and the positions they take, tend to be autocratic, strongly oriented to the past, concerned with what they believe (often falsely) is history and tradition, and with, above all, punishment, which they offer as a cure for every social ill. Their mysticism tends to focus mostly on an ancient, angry father-god. In their view, others should be adequately organized, even regimented, properly disciplined, and controlled. They maintain a posture of perpetual threat-display. People of the right either want to be spanked, or to do the spanking, themselves.

Think of the patrician George F. Will or the late William F. Buckley.

Individuals who occupy the left-hand corner are inclined to be maternalistic, majoritarian — as long as the vote goes their way — oriented toward the present (they call it “living in the now”), and prone to medicalizing social problems and “healing” everybody whether they wish to be “healed” or not. They substitute animism and other mystical nonsense for traditional religion. They believe people must be watched over, taken care of, institutionalized, and medicated. When their veneer of altruism is stripped away, they become hysterical and violent. People of the left either want to be mommied, or to be Mommy, themselves.

Think of Nancy Pelosi, Harry Reid, or the repulsive Elizabeth Warren.

Inhabitants of the upper corner of the triangle typically think of themselves as self-determined, self-motivated, individualistic, and oriented toward the future. It is less common for them to be mystical or religious than otherwise. They display a live-and-let-live attitude of respect toward others — believing they should be left alone rather than meddled with — and favor restitution rather than punishment or therapy in the case of wrongdoing. The other two positions, right and left, are basically infantile. The apex is the only place for real adults.

Good examples would be LeFevre, Robert A. Heinlein, or Dr. Mary Ruwart.

It should be reasonably clear by now that the left-hand corner is where socialism lives — if you want to call it living — the ethical view that the rights of the group come before those of the individual. However the right-hand corner is often misidentified, as with the case of Mussolini, Hitler, and the Nazis. Look over the characteristics associated with it: the correct political expression of the right is monarchism. Long after revolutions in the 18th and 19th centuries, loyal advocates of the king are still out there, pressing his royal case.

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