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The Financialization of the American Elite

americanaffairsjournal.org

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Re: The Financialization of the American Elite

#41

Post by Qasaur »

solotronics wrote: post #39
Qasaur wrote: post #36

Very interesting article. I think what a lot of these articles lack is a discussion of the role that monetary policy plays in the financialization of the American (and, indeed, global) economy. While I agree that there are other factors that lead to the rise of shareholder primacy, I think the most important one is the distortion of relative capital proportions in the economy largely caused through the mechanism of m…

I think the firehose we have now of unconstrined fiat currency will go down in the history books as an aberration in the history of money. Money and the economy are part of the bedrock of modern society and the human interactions that happen on a macro and micro level. When you get down to it fiat currencies like the USD became uncoupled from reality when it went off being pegged to a physical amount of gold/silver.…

Not only in the history of money, but in the history of humanity. Think of all the lost prosperity that has been siphoned off since 1971 and the collective rise in living standards people could have afforded.

We are very comfortable as technologists and other high-paying (read: inflationary) professionals, but there is a large class of people who are getting thoroughly shafted by these monetary policies and they are your Uber drivers, the people who work at the coffee store, the factory workers in the midwest, and the homeless. The exponential rise in rents in cities are not a natural consequence of the capitalist marketplace, rather its a consequence of loose monetary policy whereby money has entered real estate markets to gain returns by exploiting ridiculous rents.

https://www.epi.org/productivity-pay-gap/

Again, no coincidence that productivity and wage increases started to diverge significantly after the gold standard was abandoned.

Our modern loose monetary policy and inflation targeting is probably the greatest regressionary redistributional scheme in the history of mankind, and will go down in history as such.

Re: The Financialization of the American Elite

#42

Post by fzeroracer »

Ididntdothis wrote: post #40
fzeroracer wrote: post #38

Earlier quoted context omitted.

And sometimes an old system actually does need a total rewrite because it's leaking PII everywhere, prone to completely crashing every couple of years and struggles to interface with automation.

And very often it would keep working nicely with just a few minor changes.

A few minor changes that never arrive because your company dictates you add new features and functionality than fix tech debt (because tech debt doesn't earn more money). So you have large parts of the codebase which are actively on fire, but not too much on fire that it's costing money yet.

Until you run into a hard wall trying to integrate new features that customers request which break the entire system and before you know it, you're still running on C# 3 while all of the other APIs and companies have long upgraded to C# 8 (or switched languages altogether). Then your wildfire turns into a firestorm and your customers start calling in.

And they're pissed.

Re: The Financialization of the American Elite

#44

Post by TheOtherHobbes »

Qasaur wrote: post #41
solotronics wrote: post #39

Earlier quoted context omitted.

I think the firehose we have now of unconstrined fiat currency will go down in the history books as an aberration in the history of money. Money and the economy are part of the bedrock of modern society and the human interactions that happen on a macro and micro level. When you get down to it fiat currencies like the USD became uncoupled from reality when it went off being pegged to a physical amount of gold/silver.…

Not only in the history of money, but in the history of humanity. Think of all the lost prosperity that has been siphoned off since 1971 and the collective rise in living standards people could have afforded. We are very comfortable as technologists and other high-paying (read: inflationary) professionals, but there is a large class of people who are getting thoroughly shafted by these monetary policies and they are…

It's not even the descent into poverty by the former middle classes - although that in itself is barbaric.

The deeper problem is the opportunity cost - the small businesses that were never started, and the inventions, innovations, and other developments that never happened because financialised markets were more interested in speculation, wealth capture, scamming, and gambling than in fringe high-risk speculative R&D.

In fact the financialisation and corporatisation of the research that does happen has distorted the research process and made it far less effective. Without it we might have had game-changing advances in fundamental physics, AI, medicine, aerospace, robotics, bioengineering, and even arts and culture that were decades ahead of where we are now.

Re: The Financialization of the American Elite

#46

Post by carapace »

_bxg1 wrote: post #5
dang wrote: post #3

Earlier quoted context omitted.

Maybe so, but please don't post unsubstantive comments to HN. Especially not generic ideological comments, which tend to lead to generic ideological flamewars, which we want to avoid because they're so predictable. https://news.ycombinator.com/newsguidelines.html

I felt it was substantive; lots of people worship the market blindly and this article is an excellent deep-dive into exactly what's wrong with that mentality. I was also drawing an analogy to the common refrain about communism, which is true in that case as well. The world's most prosperous societies know how to strike a balance.

Joke in Russia in the 90's: "Everything they told us about Communism was lies, but everything they told us about Capitalism was true."

Re: The Financialization of the American Elite

#47

Post by tathougies »

harimau777 wrote: post #20
tlb wrote: post #8

Earlier quoted context omitted.

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

As a thought experiment; how about taking some inspiration from Georgism to try to make capitalism better live up to its ideals: At least in America, many of the wealthy are able to make money due to inherited resources that they did not earn. For example, their ancestors claimed a tract of land or access to a natural resource. Therefore, Capitalism could be brought more in line with the meritocracy that it claims to…

Rubbish. My parents, aunts, and uncles came to this country with nothing in the 80s. Their old country didnt let them export cash. My dad was literally forced to work for below minimum wage for many yeara illegally. All of them now own houses, multiple parcels of land, and their children have access to all the supposedly 'claimed' resources.

The american dream is alive and well. I work with many many immigrants and their children all of whom put themselves on the path to success. The fact is most 'americans' whose families have been here for many generations are completely lazy and entitled. They want privileges they have not yet earned that they enjoyed while living with mom and dad.

Re: The Financialization of the American Elite

#48

Post by debatem1 »

tlb wrote: post #7

I rarely buy the "deeply flawed messenger" argument. Here, he's basically criticizing short-term business thinking, which he also took advantage of as an investor. Should we therefore put him in a hippo crate? Few people in the tech community say "This guy exploited a security bug. Therefore, we shouldn't listen to his bug reports." In fact, you can't really understand a bug except by trying to exploit it. I suspect…

If someone spent decades exploiting vulnerabilities to the point where they made a billion dollars shuttering hundreds of healthy companies and costing thousands of people their jobs, that person would either be very quiet about it or in jail, most likely the latter.

And as a security person, I don't think that's a bad thing. We have laws around these kinds of issues specifically because having the raw technical capability to ruin lives should not be viewed as tantamount to permission to do so. So should it be in the financial realm.

Re: The Financialization of the American Elite

#49

Post by drtillberg »

solotronics wrote: post #39
Qasaur wrote: post #36

Very interesting article. I think what a lot of these articles lack is a discussion of the role that monetary policy plays in the financialization of the American (and, indeed, global) economy. While I agree that there are other factors that lead to the rise of shareholder primacy, I think the most important one is the distortion of relative capital proportions in the economy largely caused through the mechanism of m…

I think the firehose we have now of unconstrined fiat currency will go down in the history books as an aberration in the history of money. Money and the economy are part of the bedrock of modern society and the human interactions that happen on a macro and micro level. When you get down to it fiat currencies like the USD became uncoupled from reality when it went off being pegged to a physical amount of gold/silver.…

The Class of 1982 was special in graduating at the very inception of what has become a nearly 40-year bull market in credit, which is mostly a story of monetary and regulatory policy.

When the books are written 100 years from now, they will explain this period as a hyperinflation that our HBS-trained leaders in government and finance managed to trap mostly in financial assets, all the while counter-intuitively justifying their money-creation activities based on a theoretical potential to leak gradually out to the broader economy. Hyperinflation here to maybe generate useful inflation there, but really useful primarily in creating robber-barrons and oligarchs, who perpetuate the system through 'soft bribery' and 'reputation laundering' described in the article.

This article and the speeches etc. discussed in it should be a clarion call for folks to accelerate imagining what will come next, which may well go beyond increasingly cosmopolitan admissions and instruction at HBS.

Re: The Financialization of the American Elite

#50

Post by iambateman »

solotronics wrote: post #39
Qasaur wrote: post #36

Very interesting article. I think what a lot of these articles lack is a discussion of the role that monetary policy plays in the financialization of the American (and, indeed, global) economy. While I agree that there are other factors that lead to the rise of shareholder primacy, I think the most important one is the distortion of relative capital proportions in the economy largely caused through the mechanism of m…

I think the firehose we have now of unconstrined fiat currency will go down in the history books as an aberration in the history of money. Money and the economy are part of the bedrock of modern society and the human interactions that happen on a macro and micro level. When you get down to it fiat currencies like the USD became uncoupled from reality when it went off being pegged to a physical amount of gold/silver.…

The idea that “gold is valuable” is just as hand-wavy, but requires us to relinquish control of the supply to whomever happened to find themselves sitting on top of a gold mine.

Perhaps fiat isn’t your ideal, but it’s almost certainly better than pegging to a rare earth metal.

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