The Financialization of the American Elite • Hacker News Board

Re: The Financialization of the American Elite

#21

Post by Animats » Tue, Aug 20, 2019, 10:51 PM UTC

caseysoftware wrote: post #12

Animats wrote: post #4

He's missing a big change since 1949 or 1974 - the demise of communism. It's not that communism was all that successful, but it was competition for capitalism. Capitalism had to do better for the voters than communism. From about 1920 to 1980, American business was scared of communism as an alternative system. In the 1950s and 1960s, when the USSR looked to be surging ahead, there was heavy PR about how capitalism de…

There's a bigger underlying market condition from 1949: World War 2. Most of the industrialized world had been decimated. Continental Europe had been marched all over with bridges and factories destroyed. The UK was crippled and barely hanging on. Japan had destroyed huge swathes of China and the US nuked Japan. On the Allies side, morale was high and the US was lending to the world to rebuild. Even better - economic…

See Great Depression and New Deal. This predates WWII.

Re: The Financialization of the American Elite

#22

Post by Ididntdothis » Tue, Aug 20, 2019, 11:01 PM UTC

tlb wrote: post #17

Ididntdothis wrote: post #15

Earlier quoted context omitted.

We don’t need to create a new system. Capitalism is perfectly fine with a few tweaks.

I think Animats' argument is that capitalism isn't getting those tweaks because there's no competition. Capitalism as a system has a near-monopoly. Back when it had serious competition from the Soviet Union, people tried much harder to make it work better. So the new system doesn't have to actually be better overall than capitalism, it just needs to provide some competition to light a fire under policy makers.

I guess we will have to learn how to live without a competitor that brings people together. Otherwise where can we get a replacement for the Soviet Union that scares people enough? China?

Re: The Financialization of the American Elite

#23

Post by walshemj » Tue, Aug 20, 2019, 11:02 PM UTC

rjsw wrote: post #6

Animats wrote: post #4

He's missing a big change since 1949 or 1974 - the demise of communism. It's not that communism was all that successful, but it was competition for capitalism. Capitalism had to do better for the voters than communism. From about 1920 to 1980, American business was scared of communism as an alternative system. In the 1950s and 1960s, when the USSR looked to be surging ahead, there was heavy PR about how capitalism de…

British Telecom was spun out of the Post Office, it wasn't a formerly private business that had been taken over by the Government.

Actually not the UK government nationalised most of the Uk's private telecom businesses before WW1

Re: The Financialization of the American Elite

#24

Post by Animats » Tue, Aug 20, 2019, 11:02 PM UTC

tlb wrote: post #17

Ididntdothis wrote: post #15

Earlier quoted context omitted.

We don’t need to create a new system. Capitalism is perfectly fine with a few tweaks.

I think Animats' argument is that capitalism isn't getting those tweaks because there's no competition. Capitalism as a system has a near-monopoly. Back when it had serious competition from the Soviet Union, people tried much harder to make it work better. So the new system doesn't have to actually be better overall than capitalism, it just needs to provide some competition to light a fire under policy makers.

I think Animats' argument is that capitalism isn't getting those tweaks because there's no competition. Capitalism as a system has a near-monopoly. Back when it had serious competition from the Soviet Union, people tried much harder to make it work better.

Exactly. This led to much government regulation to keep big business from getting too heavy-handed. See the previous price discussion on insulin pricing for a modern example. Although drug prices have not been regulated, until recently there was an assumption that blatant overcharging would lead to government action. It didn't.

Unions used to have much more power in the US. They had money and votes. Business only had money, and couldn't use it directly without being accused of bribery.

Many little, and not so little, restrictions that used to keep businesses from getting too greedy have been removed in recent decades. Glass-Stegall, which kept banks and brokerages separate. Far fewer restrictions on banks. The removal of the restriction on "gambling" in stock markets, which limited derivatives. Allowing interstate branch banking. Repeal of the Utility Company Holding Act. The NYSE allowing multiple classes of stock (like Facebook, Google, etc.). Weakened telecom regulation. Weakened labor law enforcement. Unregistered hedge funds. Pension funds being allowed to invest in hedge funds. The Interstate Commerce Commission. The Civil Aeronautics Board. The list goes on.

Re: The Financialization of the American Elite

#25

Post by hedvig » Tue, Aug 20, 2019, 11:12 PM UTC

Ididntdothis wrote: post #15

tlb wrote: post #8

Earlier quoted context omitted.

Suppose you could create a system to compete with capitalism. What would it be like?

We don’t need to create a new system. Capitalism is perfectly fine with a few tweaks.

The same who say that never gets around to the tweaks

Re: The Financialization of the American Elite

#26

Post by bob457 » Tue, Aug 20, 2019, 11:14 PM UTC

I thought this was going to be an interesting article. Then I read

>At first glance, this is sound—even admirable—advice for aspiring business leaders. But a closer look at Klarman’s remarks, as well as the origins and trajectory of his career, suggests a deeply flawed messenger.

And I realized this was just another article which refuses to engage ideas and falls back to ad hominem. I don’t care if the messenger is flawed, or what somebody thinks his or her motivation is for delivering a particular message. I want to hear a critique of the message itself.

Re: The Financialization of the American Elite

#27

Post by golemiprague » Tue, Aug 20, 2019, 11:16 PM UTC

tony_cannistra wrote: post #14

I have to say, these three particular sections are able to finely articulate what I've been thinking as I watch rich people try to run the United States. > "At bottom, when many of our country’s wealthy citizens say “democracy,” what they really mean is “our class’s way of life.” If they respected democracy as fervently as they worship the “invisible hand,” they would see that the popular discontent simmering across…

[dead]

Re: The Financialization of the American Elite

#28

Post by akiselev » Tue, Aug 20, 2019, 11:20 PM UTC

bob457 wrote: post #26

I thought this was going to be an interesting article. Then I read >At first glance, this is sound—even admirable—advice for aspiring business leaders. But a closer look at Klarman’s remarks, as well as the origins and trajectory of his career, suggests a deeply flawed messenger. And I realized this was just another article which refuses to engage ideas and falls back to ad hominem. I don’t care if the messenger is f…

The majority of the article is about shareholder primacy and the disingenuousness of the messenger and his message, as demonstrated by his actions.

Re: The Financialization of the American Elite

#29

Post by airstrike » Tue, Aug 20, 2019, 11:22 PM UTC

caseysoftware wrote: post #12

Animats wrote: post #4

He's missing a big change since 1949 or 1974 - the demise of communism. It's not that communism was all that successful, but it was competition for capitalism. Capitalism had to do better for the voters than communism. From about 1920 to 1980, American business was scared of communism as an alternative system. In the 1950s and 1960s, when the USSR looked to be surging ahead, there was heavy PR about how capitalism de…

There's a bigger underlying market condition from 1949: World War 2. Most of the industrialized world had been decimated. Continental Europe had been marched all over with bridges and factories destroyed. The UK was crippled and barely hanging on. Japan had destroyed huge swathes of China and the US nuked Japan. On the Allies side, morale was high and the US was lending to the world to rebuild. Even better - economic…

There's an even bigger underlying market condition today: globalization.

You can outsource cheap labor, so Asian workers have enjoyed continuous increases in per capita income while OECD workers have experienced stagnant wages and upside has been limited to capital holders.

Re: The Financialization of the American Elite

#30

Post by yifanl » Tue, Aug 20, 2019, 11:22 PM UTC

Ididntdothis wrote: post #22

tlb wrote: post #17

Earlier quoted context omitted.

I think Animats' argument is that capitalism isn't getting those tweaks because there's no competition. Capitalism as a system has a near-monopoly. Back when it had serious competition from the Soviet Union, people tried much harder to make it work better. So the new system doesn't have to actually be better overall than capitalism, it just needs to provide some competition to light a fire under policy makers.

I guess we will have to learn how to live without a competitor that brings people together. Otherwise where can we get a replacement for the Soviet Union that scares people enough? China?

To me, China looks more like the logical conclusion of capitalism than some competing economic system.