Sunday, December 19, 2010

My brother-in-law is a................

.............really good guy who has taught me much about the truly
important things in life.  He will occasionally make some
welcome, but challenging, comment to these blog posts.  His
latest such comment followed my saying Richard Green had a
valid concern about this:

         "I worry that the extraordinary increase in unevenness
         in wealth is not the result of merit, but the result of the
         game being more and more rigged."

His comment was this:

     "Unevenness of wealth is straw man unless you view
      society Marxian eyes. When you look at the history of
      this country (much less the rest of the world) we're not
      at time of much unevenness. In New York there is the
     "Tenement Museum" where you get a glimpse of the
      life of the working poor in the 18th and early 19th
      century. Today's poor are rich by those standards. And
      the rich of  those days were named Vanderbilt,
      Rockefeller, and Carnegie. Wealth beyond imagination."

My first reaction was that I really wasn't talking about "uneven-
ness of wealth," I was thinking about the "riggedness" of the
game.  About 20 seconds later the thought occurs that perhaps
the folks of those eras thought that Rockefeller had rigged the oil
business, that Carnegie had rigged the steel business, and that
Vanderbilt had rigged the steamships and rails.

All of those Titans clearly knew how our political system worked
and were not afraid to get involved in its rough and tumble ways.

So, are things really different today than they were in 1900?

After explaining to you that I am unwilling to do the research, I
am willing to take a stab at the answer.  No and Yes.

No: things are not different in this "unevenness of wealth" thing. 
Dennis is correct.  Historically, regardless of era or governmental
form, "some pigs are more equal than others" and great wealth
disparities have always existed.  It is just a part of the great
human experience.  It is not likely to change.

Yes: the game is "more and more rigged.'  Vanderbilt and his ilk
were not above trying to buy the New York State legislature, but
that was a fleeting thing.  The legislature didn't always stay
bought.  New blood - new money- showed up and things could
become unrigged.    The Wall Street of today may correspond
with the "robber barons", or Titans if you prefer, of the by-gone
era, but the political institutions and bureaucracies in Washington
today are much more powerful and pervasive than any
government in 1900.

Where I get the sense of "riggedness" is from the well worn path
back and forth between "The Goldman Sachs" (not exclusively
mind you but as a bright and shiny example) and the corridors of
power in Washington.  It is one thing to dominate an industry. 
It is entirely another when you add domination of the levers of
power of government as well.

Like I said, this is not a research project, but follow this link and
see if you agree, here.  Here is a really fun excerpt from the
linked article  (this may be the only time in my life I was rooting
for Maxine Waters):

       "In March, Geithner was questioned by Congresswoman
        Maxine Waters about the appearance of conflict of
        interest by Goldman Sachs insiders:

      "I am just asking the questions," Waters said, "because
       the talk is...that this small group of decision makers at
       the center of it is Goldman Sachs and that's what's
       causing a lot of the distrust, because people are thinking
       or believing that Goldman Sachs, because of the con-
       nections, have had a lot to do with the decisions that are
       being made."

       Geithner responded: "I think it's deeply unfair to the
       people who are part of these decisions to suggest that
      they were making judgments that in their view were not
      in the best interest of the American people."

As Danny used to say, "that cracks my head up."

Faithful readers will know my bias:  the vast majority of our
citizenry participated in, or benefited from, the late great housing
bubble.  We all get a share of the responsibility for the state of
our economy.  However, to the extent that there are any villains
in the story, they resided on Wall Street.  Now, their cronies
are making and implementing policy in Washington. Creating
policies that certainly seem supportive of entrenched power and
interests like those banks deemed "to big to fail", yet at the same
timeare highly burdensome to smaller businesses like your
neighborhood Savings & Loan and/or community bank.

As Deep Throat told Bob Woodward many years ago, "follow
the money."  It sure looks like a rigged game from here.

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