Matt Taibbi calls it right:
But it seems to me that if you’re broke enough that you’re not paying any income tax, you’ve got nothing but skin in the game. You’ve got it all riding on how well America works.
You can’t afford private security: you need to depend on the police. You can’t afford private health care: Medicare is all you have. You get arrested, you’re not hiring Davis, Polk to get you out of jail: you rely on a public defender to negotiate a court system you’d better pray deals with everyone from the same deck. And you can’t hire landscapers to manicure your lawn and trim your trees: you need the garbage man to come on time and you need the city to patch the potholes in your street.
And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air.
The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.
An ordinary person who has a problem that needs fixing puts a letter in the mail to his congressman and sends it to stand in a line in some DC mailroom with thousands of others, waiting for a response.
But citizens of the stateless archipelago where people like Schwarzman live spend millions a year lobbying and donating to political campaigns so that they can jump the line. They don’t need to make sure the government is fulfilling its customer-service obligations, because they buy special access to the government, and get the special service and the metaphorical comped bottle of VIP-room Cristal afforded to select customers.
Want to lower the capital reserve requirements for investment banks? Then-Goldman CEO Hank Paulson takes a meeting with SEC chief Bill Donaldson, and gets it done. Want to kill an attempt to erase the carried interest tax break? Guys like Schwarzman, and Apollo’s Leon Black, and Carlyle’s David Rubenstein, they just show up in Washington at Max Baucus’s doorstep, and they get it killed.
and:
People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.
What makes people furious is that they have stopped being citizens.
Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors. It’s called having a conscience: even though there are plenty of things most of us could get away with doing, we just don’t do them, because, well, we live here. Most of us wouldn’t take a million dollars to swindle the local school system, or put our next door neighbors out on the street with a robosigned foreclosure, or steal the life’s savings of some old pensioner down the block by selling him a bunch of worthless securities.
But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India. They defraud the pension funds of state workers into buying billions of their crap mortgage assets. They take zero-interest loans from the state and then lend that same money back to us at interest. Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.
Tagged OWS
The demise of SSC caused the current financial crisis
The cancellation of the Superconducting Super Collider was an idiot thing to do for any number of reasons. First, it still would have been the most powerful accelerator on earth, with the most luminosity. We would have found the Higgs in 1996, instead of not quite yet in 2011. We rarely get measurable quantities like this in history, but it’s easy to quantify this. Cancellation of the SSC set back particle physics by more than 15 years. That’s half my scientific lifetime (and a scientific career change) gone. And now that LISA has been cancelled…
It would have cost less to finish it than we had spent on it to that point. The fallacy of sunk costs, I know, but it’s a powerful fallacy.
But the most important reason is that canceling the SSC caused the financial meltdown of 2008. As I remember, there were about 2000 physicists working on building the SSC: the magnets, the detectors, the computers, triggers, cryogenics, etc. Back in the 90s, the US matriculated about 200 Ph.Ds per year in high energy particle physics (HEP). When the SSC was canceled, that dumped a ten-year supply of particle physicists on the market all at once. HEP is known to create self-serving bastards (cf. Rubbia, Ting, et al.); even the lesser ones get indoctrinated in the culture by their colleagues and advisors.
All those bastards had to get a job somewhere. Even those of us bastards who were unlucky enough to graduate at that time and had nothing to do with the SSC were affected. I surmise that a large number of HEP physicists, who are smart, amoral, self-serving, and really good with computers and algorithms, fell into the waiting arms of Wall Street. Some number would have done that in any case, but there just weren’t enough jobs at CERN, Brookhaven, SLAC, and TRIUMPH to absorb everyone. In some sense, I was lucky, because I was just starting my postdoc career, so I could start in at a low level, but if you were an established scientist, with a family and a mortgage, taking another postdoc probably wasn’t an option for you. Wall Street was.
Would the financial markets have melted anyway? Probably. The development of derivatives, CDOs, regulatory capture, the buying and selling of politicians and power, the increasing plutarchy would have happened anyway. The demise of the SSC simply accelerated it. Another quantifiable aspect.
I have no data other than anecdotal to back up this opinion. That’s for a social scientist to discover. Go nuts, guys. (Call it the BWare postulation. There’s already BWare’s law.) If so, it’s yet another reason to blame a short-sighted Congress for causing the long, slow recession we’re in. Aside for blaming them for HEP moving overseas, and the US no longer being a leader in that field.
[update 22 Feb 12] I talked to some people who might know about such things. One told me that in 1994, his entire graduating class of Ph.D Harvard physicists went to Wall Street. Another made the point that the banksters would have ruined the economy anyway, and that scientists couldn’t be held responsible for their employers machinations. To me this seems like the argument that it was the politicians who are responsible for nuclear weapons, not the scientists who actually built them. Or the commander, not the soldier who pulls the trigger.
Without the scientist, the soldier, weapons aren’t built, triggers not pulled. Each does things for their own reasons, which may not be the same as those who write the checks, but in the end, responsibility lies with each of us. Apportion responsibility as you will. I can only be responsible for my own actions, by the moral system I choose to live by.
Tagged HEPHigh Energy Physics
Rant
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