A Flea in the Fur of the Beast

“Death, fire, and burglary make all men equals.” —Dickens

Category: Capitalism

Let Tom Ford Explain Why Not Getting Paid Wages Is Good for You

by evanmcmurry

Shane Kuhn, whoever he is, has a list of Seven Essential Books for Interns up at Simon & Schuster’s business books blog, which I guess interns can purchase with their pluck. His first recommendation, Tom Ford by Tom Ford, is on there because Tom Ford is a success story who rose all the way from the middle class. Price of the book: $85, or as interns call it, one week’s worth of food.

What wisdom is worth so much ramen?

He also believes EVERYONE should be an intern and shares my views on the topic: “I think this is the problem today, people come out of school and think they should immediately be a star. In this world of course you can make a sex video and you can become a star. But I think everyone should be an intern – you should sweep floors, you should pick up pins. You should run errands because you learn so much.” 

Most businesses that don’t pay their interns* at least do so with a whiff of regret, a “We’d pay you, but [the market, this industry, we’re a startup, etc].” These are just excuses, but they’re excuses that preserve the idea that a person’s time is worth money, and that not paying them that money is a situation that, in a better world, would be remedied.

Ford’s explanation is the first time I’ve heard someone say that not getting paid is in and of itself a reward. It takes some serious chutzpah for someone whose suits retail for $7,000 to tell you that not getting paid wages is good for you.

* This is ignoring for now that making internships no-pay all but guarantees that only privileged people can get them, thereby structurally mandating that they’re made up of people whom Ford says need them to puncture their privilege.

Review Distribution in the Twenty-First Century

by evanmcmurry

Book about economic polarization achieves perfect review polarization:

Screen Shot 2014-04-26 at 12.11.10 PM

What happened to the middle class (of reviewers)?!?!?1!?!

Of course, the 1-star reviews are from people who’ve read not one of the book’s 696 pages, but know the thing to be a Marxist night terror anyway. Highlight: “Not a book to be lightly thrown aside. It should be thrown with great force.”

Blind Ambition

by evanmcmurry

Larry Bartels found a fascinating American distinction: whereas support for government spending cuts in other affluent democracies is modest but steady across incomes, it’s class-dependent in America. Which is to say, rich people support cutting gummiment spending a whole lot more than poor people. Here, have a graph:

blog_spending_cuts_rich_poor

Bartels thinks this is due to a combo of the entanglement of class and race — government spending goes to “those people,” as a certain Nevada rancher informed us this past Wednesday — and the fact that the federal generosity that waters the upper class flows through back channels like wink-wink tax deductions rather than visible ones like food stamps.

But that’s a binary view that sees only rich and poor. Shrinking though it is, the middle class still exists. Kevin Drum fills in the gap:

The opinions of the rich are what drive public policy in America. Add in longstanding grievances against providing benefits to people with darker skins, and you’ve got a big chunk of the middle class on your side too.

Bingo. The rich drive public policy because the group caught between the rich and the poor ape the former to distinguish themselves from the latter. You might call this Yacht Politics. Or, to quote Rousseau via Corey Robin, “Citizens only allow themselves to be oppressed to the degree that they are carried away by blind ambition.” That’s the austerity vote in a nutshell.

What Passover Tells Us About the Stock Market or Something

by evanmcmurry

Jim Cramer takes a long walk around the block:

“This market, it’s got a disease,” he warned on Monday’s episode of Mad Money. “We’ve been hit with a plague of initial public offerings. That isn’t over yet. And for those of you celebrating passover tonight, the plague of IPOs is worse than the plague of locusts, frogs, definitely not as bad as the whole death of the first born thing though.”

Flubs the next one, though:

“A stock market is like any other market, it’s all about supply and demand.”

It’s why is this stock market different from all other stock markets. I mean, if you’re gonna do it, do it.

Yahoo Gives World $100 Million Lesson in Efficiency of Private Sector

by evanmcmurry

The next time somebody blah blah blahs about how much more efficient and money-conscious and innovative the private sector is, forward them this doozy:

In 2012, Yahoo’s board had such high hopes for Henrique de Castro that it paid him more than his boss, Marissa Mayer. Little more than a year later, he is gone, fired from his job as Ms. Mayer’s No. 2 after a disappointing performance.

All told, Mr. de Castro will walk away with at least $88 million and as much as $109 million for his 15 months of work.

[snip] Mr. de Castro, who was hired away from Google, was hardly a tech superstar. He had a spotty track record at the search giant. And less than a year before he left, he was demoted from managing media and platforms to an amorphous role working on “special projects” on a team of one.

Keep in mind, this all occurred after Scott Thompson got resigned from Yahoo for faking his resume.

Note, also, that de Castro made more than his female boss. A nice touch.

The Wolf of Wall Street and the Alex Rodriguez Problem

by evanmcmurry

I didn’t really care for The Wolf of Wall Street, but twelve hours on I’m figuring out I wasn’t really supposed to. Via Andrew O’Herir:

If the movie seems unsatisfying, that’s because we yearn for some kind of grandiose and dramatic revenge against the Jordan Belforts of the world, against the corrupt and criminal plutocrat class who humiliated and bankrupted us, who took advantage of our “base drives and puerile fantasies” and who do so still…We don’t get it in symbolic form within “The Wolf of Wall Street,” and we certainly don’t get it in reality, at least under the current dispensation of capitalism. How does Scorsese feel about Jordan Belfort? Pretty much the way the rest of us do: We claim to hate him, but our actions suggest otherwise.

You could easily rephrase this as the Alex Rodriguez Problem. Rodriguez is by even generous accounts a megalomaniacal asshat (a-hem) who cheated his way into a contract that paid him more per year than the entire rosters of other teams, and as a result lives a monstrously lavish lifestyle unrecognizable to 99.999999% of humanity (and, like Jordan Belfort, appears to lack the capacity for introspection). Rodriguez seems genuinely agonized right now over his suspension—the largest the MLB could think up because it’s the only possible leverage they have over a man worth the annual GDP of American Samoa—but when the tabloid coverage settles, Rodriguez will be sleeping atop a pile of money surrounded by many beautiful ladies.

His version of cheating is more of a victimless crime than Belfort’s, but the risk/reward ratio is proportional. Belfort, if the film is in any way an accurate reflection of his memoir, has no regrets about the bacchanal of illegality for which he served a few years in a minimum security prison. The only thing he’d change about his behavior is the getting caught part, and even if he couldn’t change that, he’d still do it all over again. The money was worth it.

I bet Rodriguez will feel the same. The MLB could bar him for life, and A-Rod’s wealth would still dwarf the punishment. He’s the most hated man in baseball right now, but does anybody believe that in three, five, ten years’ time, any up-and-coming ballplayers will weigh his eventual infamy against the $300 million contract and find it a bum deal? No fewer than the number of bankers who weighed previous SEC punishments against the bonuses and ruled emphatically in favor of getting paid. Rodriguez and Belfort proved that cheating pays, a lot.

In this context, Scorsese’s dramatic and moral choices make more sense. Scorsese couldn’t portray Jordan Belfort’s story as a morality tale, because it’s not one. Instead, he situated the viewers where we likely already were, fantasizing after Belfort’s largesse no matter how fervently we objected to the means of its attainment; Scorsese then rubbed our noses in the excess, repetitively—repetitively—until we were exhausted by it. He let the audience live Belfort’s life vicariously until we were sick from it, not because it was ultimately unrewarding but because the longer you snort the rewards, the more grotesque they become.

In short, if Scorsese ever makes a movie about Rodriguez—an entirely possible event—it will likely feature a neurotic number of florid scenes of A-Rod staring up at a centaur rendering of himself during sex. You can’t ever suspend Rodriguez enough games to make his malfeasance seem undesirable to the rookies. All you can do is show him rutting to a portrait of himself, over and over, until people begin to wonder if that’s really what they want.

Where I Am Somewhat OK Being Called an Elitist Compared to the Alternative…

by pdxblake

“The Democratic political advisers who went from working on behalf of the president or his party to advising the San Francisco billionaire Thomas F. Steyer on his campaign against the Keystone XL pipeline provide a telling example. Twenty years ago, they might have gone to work for the Sierra Club or the Nature Conservancy or run for public office themselves. Today, they are helping to build a pop-up political movement for a plutocrat.” —Chrystia Freeland in the NY Times

I will admit that this is a bit out of my normal subject of economics that I write about, but it ties into economics because the economic situation of the country and specifically the distribution of the gains from the economy are driving the development of public policy in a very different way than they used to. As someone who often experiences the feeling of “it would be easy to fix this if people weren’t so ignorant” (which I suppose makes me a bit of an elitist), I have to admit that the technocratic type approach should get my support; but the way it is described in the quote above, it has the opposite effect.

The way it is designed now is that the ability to get the technocrats to pay attention to an idea is in direct correlation with the wealth backing the think tank employing the technocrats now and employing the policymakers when they leave government. Policy under this type of model is a struggle between billionaires to decide which of their vanity projects and visions of society is imposed on the country. Frankly, if you want to call me an elitist, I think more technocrats should be running policy and it should be removed from political processes, but I don’t want to see it turned into a billionaire’s sport, and even more than that I worry about the blowback to this type of governance.

The link I think Freeland is drawing is between the billionaire-funded technocratic people making the policies and the rise of populist movements like Occupy Wall Street and the Tea Party. The problem with each of these movements is they typically start from a disdain for the status quo (rightly or wrongly) and first want to up-end the current system.  I am quite strongly an anti-revolutionary and (except for the times when I get worked up) I greatly prefer working within the system rather than overturning it for a return to some quaint time when all banks were small and local (OWS) or when the Constitution (TM) was respected (Tea Party).  Nevermind that these things were never really true (remember Potter in It’s a Wonderful Life for the lovable local banker or, um, segregation and slavery?).

They are more expressions of populist rage against the system that seems to have gone after them and ‘put them down’. This typically leads to, speaking modestly, TERRIBLE POLICY. It usually looks for scapegoats and often is driven more by anger than by thoughful discussion.

I don’t like the status quo and I don’t like the main groups trying to dramatically change it. I don’t think there is a “middle ground” because OWS doesn’t carry much sway within the Democrats and the Tea Party has taken over the policy of the Republican Party, so it is not symmetric (both sides are not at fault). But there’s not enough within the Democratic party that is focused on the underlying economic issues of the plutocracy. There is more working on the edges.

I’m not sure what the solution is, but I worry about the end-game between the plutocrats and the populists and particularly the probability (whether in the US or abroad) the populists will get enough power to make some really ugly decisions (not just the US–remember the EDL in the UK, Marine Le Pen in France and others of similar affiliation around Europe).

“The rich are different than you and me”

by evanmcmurry

“Someone accused of murder stole Guy Fieri’s Lamborghini, necessitating a court appearance…” (via)

guy fieri court sketch Guy Fieri in a courtroom sketch is the funniest thing to ever happen in our justice system

He actually looks less ridiculous in this drawing than IRL. He looks like Smash Mouth’s accountant.

Paul Ryan Hits It on the Head

by evanmcmurry

Apparently Paul Ryan now thinks sudden and harsh austerity measures are disruptive and traumatic to the economy. I’m sure he’s re-writing his past two budgets as we speak.

But here’s the key line that Ryan slips in. Listing previous examples of presidents negotiating over the debt ceiling, he includes:

Two years ago, Mr. Obama signed the Budget Control Act, which swapped spending cuts for a debt-ceiling hike.

Ha! So the “negotiating” Obama did during the debt ceiling debacle two years ago—at gunpoint—is now being used as a precedent to force him to “negotiate” now—at gunpoint. That’s exactly why Obama’s not negotiating now.

2011: The Good Ol’ Days

by evanmcmurry

Following the government shutdown on Tuesday, economic confidence is at its lowest since December 2011, when it had plummeted in response to the debt ceiling crisis. The lowest before that? The 2008 financial collapse. So, great precedents all around, and good thing the House GOP shut down the government over whatever reason they had for doing that.

You look at graph now:

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This is before the coming showdown over the debt ceiling, mind you. Whispers from the Capitol (worst romance novel ever) say John Boehner no-way-no-how will allow us to default on our debt. There’s evidence Boehner is more in charge than he appears—he kept the moderate revolt on Monday night from happening, for instance, suggesting he hasn’t completely ceded his will to power—and he definitely has the votes among his caucus to join with Democrats to raise the debt ceiling, as even a good portion of  the House GOP realize the catastrophic consequences of default. But the longer the shutdown goes on, the less predictable everybody gets…