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Finance as Wealth Transfer Mechanism: An Interview with James Galbraith

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James Kenneth Galbraith is currently a professor at the Lyndon B. Johnson School of Public Affairs and at the Department of Government, University of Texas at Austin. He is also a Senior Scholar with the Levy Economics Institute of Bard College. His latest book is ‘Inequality and Instability: A Study of the World Economy Just Before the Great Crisis’ (also available on Kindle).

Interview conducted by Philip Pilkington.

Philip Pilkington: Let’s start with the obvious question that the book raises. Namely, why studies on inequality have, until this point, been so poor. You point out in the book that the studies that have been done have been competently researched but that they simply don’t have access to the correct types of data etc. Could you talk a little about this (without getting too technical, of course) and maybe speculate a little about why this important issue has been sidetracked by the economic profession?

Jamie Galbraith: I have great respect for the many researchers around the world who have conducted income surveys over many decades, and also for those at the World Bank and elsewhere who have tried to assemble this work into useful data sets. But there are two major problems. The first is that surveys are relatively scarce, especially in poorer countries; in many countries they are available only for a few widely-scattered years. The second is that the concept – what is being measured – can vary widely from place to place and from time to time. For instance, some surveys measure the inequality of incomes; others the inequality of spending. In some cases the measures are for households; in others they are for individuals. And so forth.

The result is that when these very disparate measures are brought together, the data are sparse and very noisy, it is very hard to find clear patterns, and in quite a few cases apparent comparisons between countries just don’t make sense. This prompted us to look for other types of economic information that could be used to fill in gaps and improve the quality of the measures.

What we found, is that there is quite a lot of raw information that can be useful for this purpose, so we set about collecting it and making calculations. Our approach has its own limitations – which I’m careful to describe. But it does fill in many gaps and it does reveal clear patterns, both through time and across countries. So it permits us to use our inequality measures as a new source of insight into how the world economy is bound together, especially by the far-reaching forces of global finance.

PP: You mention that surveys are scarce. From the book I get the impression that this is bit of a dark corner in the economics profession. Why do you think this is the case?

JG: Two reasons primarily. One is that surveys are expensive. The other is that for many years there wasn’t that much interest in economic inequality among economists; growth, development, trade and finance were all more fashionable fields. More recently there has been an explosion of interest in inequality — but it’s too late to go back and take surveys for past years, let alone past decades.

So the challenge for us was to find other types of data, which could fill in some of the missing information.

PP: As pretty much everyone knows by now, inequality has been rising in most advanced countries in the past few decades. One of the interesting points you make in the book is that you don’t believe rising inequality in many advanced countries could have been turned to electoral advantage. Could you please explain how you came to this conclusion?

JG: Inequality rose almost everywhere – both in the advanced countries and in the rest of the world – very sharply from 1980 to 2000. After that, the global picture becomes less clear, since lower interest rates, rising commodity prices and political change improved the picture in many places, including especially Latin America. We have strong evidence of declining inequality in parts of Latin America after 2001.

The book includes a chapter on the relationship between inequality and electoral outcomes in the United States. The US is interesting because what is relevant for presidential electoral outcomes – thanks to the Electoral College – is inequality within states. Getting good measures of inequality within states was a very interesting challenge, all by itself.

What we found is that when you look at inequality in that way, you find that higher inequality is associated with lower voter turnout. But it’s also true that states with more inequality of a very particular type, namely states that tend to have a lot of geographical stratification between the rich and the poor, tend toward the Democratic Party. And states for which this is less true tend Republican. There is very striking evidence for the 2000 election: you can practically predict which way a state went in that election by the measure we developed, right down to the tie vote in Florida.

We conclude two things: first that higher inequality inside a state is associated with policies that discourage voting by the relatively poor, and second that when the rich and poor tend to live in separate local political jurisdictions (which is more common in big states like California and New York) the rich don’t interfere with the poor as much as they do when both are voting in the same places.

Anyone who lives (as I do) in the American South will, I think, not find this surprising. It’s very much consistent with, for instance, the history of the Voting Rights Act.

PP: And how then did you conclude that the left could not have turned the rising inequality into electoral victory over the past few decades?

JG: That’s a question with an ironic answer, at least for the US.

A rise in inequality – while it lasts – can and often does appear to be a moment of prosperity.

We saw our largest rise in income inequality under a Democratic President, Bill Clinton. Why? Because he presided over a stock market and information-technology boom. And of course the beginnings of that boom helped win him re-election in 1996.

So you might say that rising inequality did help produce electoral victory for ‘the left’ – or what passes for ‘left’ in this country, at least on that occasion. But not in the way most people imagine.

The problem is that expansions of this type cannot and do not last.

PP: If I understand correctly you also found that nations have very little control over their own levels of inequality. How did you come to this conclusion?

JG: A nation’s level of inequality has a lot to do with its underlying economic structure and level of development: agrarian, industrial, or high-technology. But we also found, in examining the movement of inequality in the world economy over 40 years, that there was a very strong common pattern. This suggests that *changes* in inequality have a common source. Looking at the major turning points, which were in 1971-3, 1981 and 2000, a leading candidate for that source emerges: the changes in the world financial system.

Until 1971, the world’s economies were largely stabilized under the Bretton Woods system. After 1973, there was a widespread commodities-and-debt boom that tended to reduce inequality in developing countries. After 1980, high interest rates and the debt crisis raised inequality almost everywhere. And finally in 2000 there was a peak; after that interest rates fell, commodity prices recovered, and inequalities around the world tended to ease.

In the face of these global pressures, it’s possible for some countries with very stable policies and strong institutions to resist for a time: for example Denmark does not show rising inequality in our data. Or a country may be insulated from global shocks, as China and India were from the debt crisis in the 1980s (but not in the 1990s). But these cases are very few. In most cases the global forces dominate the picture.

PP: Right, so finance tears away any protective veils the nation-state tries to use to maintain equality and stability. Are you then implying that finance, or at least finance when it grows to a certain level and gains a certain amount of power, becomes a redistributive mechanism?

JG: Of course.

PP: But finance is supposed to channel investment. What shift takes place that causes it to act in such a strange manner?

JG: I suppose that is what they say. In reality, whether banks distribute resources from lenders to borrowers or back from borrowers to lenders depends on the terms of the loan. In the high-interest-rate environment of the 1980s and 1990s, the redistribution vastly favoured the lenders, which is to say, the wealthy. This is not surprising. My father once coined a “Galbraith’s Law,” which held that, as a rule, “people with money to lend have more money than people who do not have money to lend.”

PP: Mainstream economics doesn’t deal much with income distribution, why do you think this is?

JG: For many years the study of income distribution held no interest for economists, in part because the distribution seemed to be stable or becoming more equal over time. That changed in the 1980s. And beginning in the early 1990s, the mainstream did get into the act, with many papers offering up the hypothesis that inequality was driven by technology and the demand for skill. This was called “skill-biased technological change” and it became the standard explanation for rising inequality in mainstream circles. I wrote one of the earliest critiques of this, in a book called “Created Unequal” that was published in 1998. Since then, numerous applied economists have also broken ranks on this interpretation, although some continue to promote it.

PP: What was your interpretation of this rise in inequality?

JG: As my title back in 1998 suggested, it was “created.” I did a lot of original data work, creating new time series measures, which enabled me to show exactly when pay inequality rose during this period. It was clear that what we measure as *pay* inequality was very closely related to unemployment and to involuntary part-time at the low end of the pay scale. That’s not the entire story but it’s the biggest piece of it.

Inequality of *incomes* in the US is different, because measured incomes (reported on tax forms) include money made from capital gains, stock options, and the payout from venture capital investments, all of which are highly concentrated in a relatively few places, companies and people. When you look at income inequality, it’s clear that the major driver is the movement of the stock market, especially the NASDAQ. But that’s capital- asset valuations; it’s not “demand for skill.”

I’ve often said it’s actually redundant to measure income inequality in the US. You can watch it go by on cable TV, on the stock ticker.

PP: I’m pretty sure that mainstream macroeconomics doesn’t pay much attention to income distribution, but it seems probable that income distribution would have important macroeconomic effects. Do you think that income distribution has macroeconomic effects? If so, what do you think are the most important?

JG: The evidence is pretty clear that a very bad income distribution leads to economic instability; that is to panic, slump and collapse. The reason is that the bad distribution emerges from growth driven too much by private credit: from too much debt taken on by the middle and lower strata, ending in crisis. That is what we observed in the US stock market euphoria that peaked in 1929. That is what we observed in the housing finance disaster that peaked in 2007.

But one can also say that the reverse is true: the income distribution is driven by macroeconomic forces.

The act of extending credit – a macroeconomic force – generates fees and capital gains and other incomes that accrue, largely, to the top strata. You can see this very plainly in US data, but also in most other countries we’ve looked at, from Brazil to China. In sectoral data, it shows up in the fact that rising inequality is closely associated with relative gains by the financial sector.

One of things Inequality and Instability shows is that there is a common pattern in the movement of inequality around the world. A very clear pattern. It isn’t just an American phenomenon. That suggests that there must be a common global force behind it. And that would have to be a macroeconomic force, by definition.

I’m hoping to get this point across to economists, as well as to the wider public. It should have an effect on how they conduct research into inequality, dislodging them from their fixations on such matters as education and training and even immigration and trade. Such local and country-specific forces cannot be working in such a powerful common way, all across the globe, as we observe.

Of course, the wider public is much more open to evidence and to common sense, than are my professional colleagues – for the most part.

PP: So, if we accept that most inequality is generated through the finance sector, how do solve this problem? From what you say it appears that the entire economy is structured around this inequality. It seems that in order for policymakers to attack this they would have to target multiple points of the architecture simultaneously. Where would you start?

JG: In Argentina and Brazil, as I show in the book, inequality started to decline almost immediately once the financiers were knocked off their thrones. In Brazil the share of income passing through the financial sector was extraordinarily large, but over the course of twelve years and three presidencies, it has gradually been reduced, making room for expanded public services, improved social conditions and reduced inequality.

In the United States, the government has the power to bring the financial sector under control. It should use that power. Our problem is that the financial sector controls those parts of the government that set policy for finance. The banks are leading funders for presidential campaigns. The leading personnel in the Treasury and other financial agencies come from the banks, and if they do a good job (from the banks’ point of view), they can be confident that a lucrative sinecure awaits them, back at the banks, later on. This provides a very strong disciplinary effect on their conduct in office.

So – where to start? I’d *start* by breaking that link between the banking sector and the public sector.

One practical way would be to create a truly independent, effective and well-financed financial crimes enforcement unit, beyond the control of the political appointees at the Department of Justice, Treasury and the captive regulatory agencies. Also restore mark-to-market accounting and place the full control of audits and stress tests in hands that do not have an obvious conflict of interest viz. the results.

PP: People in the US – especially due to the Occupy movement – are becoming increasingly concerned about campaign financing by, among other groups, the banks. This seems to be the tie between the two sectors that ensures nothing gets done about Big Finance. I understand that you’ve spent some time around policy circles and the like. Maybe you could say something about this, the effect it has on regulation and policymaking and the potential to do something about it?

JG: I was on the staff of the House Banking Committee in the second half of the 1970s. At that time, the Committee hearing room in the Rayburn Building had just two rows of desks for members. Today there are four rows, and barely space for a table of witnesses, let alone anyone else. In other words, the size of the Committee has about doubled.

Why is this? Because the leadership in the House uses that committee as a fund-raising magnet, especially for Members who might be a little bit vulnerable. Once a Member has a spot on the banking committee, money problems go away. And one can hold practically any position on other issues that may be convenient — liberal, conservative, the banks don’t care. All you have to do is be friendly to bankers.

This is a formula for locking down the Congress. As I said, with the executive branch, it’s a bit different; while campaign financing is a significant question, so too is the actual staffing of the government, which is controlled by bankers; people come in from the banks and go back to the banks. It’s not a secret, for instance, that Robert Rubin’s protégés took a very large share of the top policy positions on economics and finance in the Obama administration — from Larry Summers on down. It’s not a secret that Peter Orszag, the first director of OMB under Obama, took a well-paid position at Citigroup on leaving the White House.

I have no simple formula for dealing with this, beyond what I keep repeating: 1) enforce the laws against financial fraud and 2) downsize the financial sector as a matter of public policy.

PP: You note that things have gotten better with regards inequality and instability in many parts of Latin America after their financial crises. Yet, such has not been the case in the US post-2008. Are you optimistic about the future?

JG: According to our most recent measures, using county-level data, income inequality in the US did fall after 2008 and then rose again – tracking the stock market as I found in the book. For lower-income workers, for older workers and for homeowners, the bottom fell out in the crisis and it has not been repaired.

The grip of see-no-evil economics has been broken in many parts of the world, and especially in South America. But in the US and in Europe, especially in Northern Europe and in the UK, it remains very strong. This means that our two continents have actually less open debate, and so fewer political options, than is now the case in many other places.

We have seen, though, that severe events do have a way of opening up peoples’ eyes and minds, and so there is always hope. I don’t rely on hope, though. My friend William K. Black, the criminologist, likes to quote William of Orange: it is not necessary to hope in order to persevere.

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82 comments

  1. ambrit

    Friends;
    I liked that last paragraph. The implications are frightening though. Lots of ‘little’ people get hurt when History steps in and does its’ thing. The quote from William of Orange is just right. We remember what he was famous for.

  2. Lambert Strether

    The “key log”:

    I was on the staff of the House Banking Committee in the second half of the 1970s. At that time, the Committee hearing room in the Rayburn Building had just two rows of desks for members. Today there are four rows, and barely space for a table of witnesses, let alone anyone else. In other words, the size of the Committee has about doubled.

    Why is this? Because the leadership in the House uses that committee as a fund-raising magnet, especially for Members who might be a little bit vulnerable. Once a Member has a spot on the banking committee, money problems go away. And one can hold practically any position on other issues that may be convenient — liberal, conservative, the banks don’t care. All you have to do is be friendly to bankers.

    This is a formula for locking down the Congress.

    And the number of rows in the committee room hasn’t changed no matter which party is managing the kabuki for the 1%.

  3. Jack M.Hoff

    JG, you say the bankers have a formula for locking down congress. What we the people need is a formula for locking up the bankers. Its pretty obvious that congress is not going to do that, so your two solutions to the problem;

    “1) enforce the laws against financial fraud and 2) downsize the financial sector as a matter of public policy”

    simply will not happen. Why do you keep repeating them? Insanity?

    1. pelham

      I can understand the impatience here, though I wouldn’t put it so harshly. Still, we do need some mechanism.

      It’s fine for James Galbraith to suggest appointing finance regulators with no conflict of interest. But, good heavens, how would this ever happen?

      Even so, I don’t think this is the solution, or at least not a very good one, to income maldistribution. If we want more equality, go after it with blunt instruments and clear means.

      Raise the minimum wage to $20 an hour, provide a guaranteed survivable income for all Americans with or without work, lock all U.S. capital within our borders, slap a 50% tax on all casino-style market gambling (including most of what’s done on Wall Street and all currency and derivatives trading unrelated to producers and direct users of commodities) and slap enormous tariffs on imports. How about that for a start?

      Then let the financial sector, regulated or not, sort things out.

      Better yet, just scrap the whole system and start from scratch, barring all our current and thoroughly discredited elites from any voice whatsoever in the formulation.

      Of course, this is all fantasy — and maybe even unwise. But it’s no less unreal than the notion that there’s even a remote possibility of achieving effective regulation.

      1. jonboinAR

        >>Raise the minimum wage to $20 an hour, provide a guaranteed survivable income for all Americans with or without work, lock all U.S. capital within our borders, slap a 50% tax on all casino-style market gambling (including most of what’s done on Wall Street and all currency and derivatives trading unrelated to producers and direct users of commodities) and slap enormous tariffs on imports. How about that for a start?<<

        Hear, hear!!!

    2. Nathanael

      JG’s prescriptions will happen after the government is overthrown.

      He’s politely not mentioning that part, leaving you to infer it for yourself.

  4. rps

    “…very bad income distribution leads to economic instability; that is to panic, slump and collapse.”

    The glaring variable that wasn’t discussed in the interview, or perhaps may be added to a later conversation is Income distribution and TAXATION. Economic equality and prosperity is tethered like the horse to the carriage through income taxation. When higher taxes are levied to excessive incomes (see R-President Eisenhower rates) then economic distribution moves toward the center. Lower tax rates, produces higher disparity.

    1. Nathanael

      Yes; I don’t know why this wasn’t mentioned by Galbraith.

      The correlation is clear; if you tax away excess gains at the top and redistribute them to the bottom, you can stabilize the system pretty automatically.

  5. Jim Haygood

    ‘When you look at income inequality, it’s clear that the major driver is the movement of the stock market, especially the NASDAQ.’ — J. K. Galbraith

    If this is so, then investing half of Social Security in equities would kill two birds with one stone. It would both raise the real return (on the order of 2 percent), and reduce income inequality (since Social Security looms much larger in the assets of the non-wealthy).

    ALL pension funds, including those of government employees, invest in equities. They do this because equities historically have provided a higher return than bonds.

    Roger Ibbotson’s SBBI Yearbook reports that since 1926, large-cap stocks returned 6.6 percent more than inflation, while intermediate-term Treasuries (a proxy for the Social Security trust fund) returned only 2.3 percent above inflation. Owing to the inexorable effect of compounding, the yawning 4.3 percent return gap cumulates to an enormous difference in end-period wealth over a typical working career of four decades.

    When Social Security was designed in 1935, bonds were still considered the only truly conservative investment. Thanks to the great advances in financial history and theory during the 1950s, 1960s and 1970s (Markowitz, Sharpe, Ibbotson, et al) we now know that an efficient portfolio includes both stocks and bonds (and preferably some alternative asset classes as well) to maximize return in proportion to risk. We also know that inflation is just as serious a risk to ‘conservative’ investments as volatility is to more aggressive ones.

    Confiscating 15.4% of workers’ wages and forcibly investing them at essentially zero return for their entire lifetime represents a near-diabolical impoverishment of the working class. But that’s how the billionaires who fund the Depublicrat Party keep the hoi polloi groaning at their traces on the Welfare State Plantation. And plenty of serfs fiercely advocate for their own financial repression.

    1. Here's Johnny

      I believe the point was stock market movement and NASDAQ is the royals playing field. You think anyone without a job, or is out of their foreclosure gives a hoot about the rallyin’?
      This just transfers more wealth to the kleptocrats, it has nothing to do with the health of the economy. I think Boosh suggested drowning SS in trickle-down lies, the objective being to transfer more wealth to the owner ruler class.

      1. EricT

        Not only do they steal from our pension funds, 401K/IRA funds, but they steal from our Social Security by avoiding paying their share with deferred compensation rules, 15% tax rates, and a cap on SS payroll taxes. Just when do we roll out the guilotines?

    2. F. Beard

      All investment entails risk. One’s basic retirement income should not be at risk. End of story.

      However, I am for abolishing FICA. Anyone who has worked a sufficient amount of time in the US should be eligible for a retirement income IF NEEDED.

      Also, if the US Government invested in stocks would that not be equivalent to nationalizing those corporations that the US obtained a controlling interest in? Also, what corporations should be invested in? How does one prevent favoritism?

    3. Min

      It is not necessary to invest the Social Security funds in stocks. Just increase the interest they receive. The gov’t cannot run out of money.

      1. F. Beard

        The gov’t cannot run out of money. Min

        Correct. Some people like to pretend that government can run out of money because they are terrified of the potential for price inflation. However, SOME money creation is undoubtedly good and that’s what deficit spending is – money creation.

    4. Calgacus

      Jim, SS taxes are not invested in anything. Uncle Sam now has a silly game where he pretends he has a giant trust fund filled with own bonds. That one of his pockets owes another pocket. As Min says, want to make SS safer in this silly game? Just have these bonds pay higher interest. Problem solved.

      The relatively sensible way SS used to be run was pay-as-you-go. The worker contributions equalled the retiree outflows. No macro effect. Just tracked real resources shifts. Just had the young support the old who supported the young before, as had been done since forever. Just monetized & uniformized this support, and could have worked forever. That’s how Germany still does it.

      But since Greenspan’s attack & the spread of economic illiteracy through “mainstream” academic “economics”, the degeneration, not the advance of economics, SS has grossly overtaxed working people building up a useless giant trust fund, in an idiotic, monstrous, way, not Min’s simple fix. Macroeconomically vastly destructive and destabilizing. Had to be offset by the government giving this stolen money to someone, or it would have destroyed the economy long ago. Guess who it went to.

      SS was designed and administered by MMT economists – or Institutionalists or Keynesians as they were called back then. SS taxes are and always were political protection for Social Security, and had nothing to do with “investment” and the people who designed it & FDR knew this damn well.

      As FDR said:
      “We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”

      http://www.ssa.gov/history/Gulick.html

    5. Calgacus

      Another thing is worth highlighting in the conversation between Gulick & FDR. Usually tired when I post that quote, so I only just really noticed it myself!

      I raised the question of the ultimate abandonment [of] the pay roll taxes in connection with old age security and unemployment relief in the event of another period of depression. I suggested that it had been a mistake to levy these taxes in the 1930’s when the social security program was originally adopted.

      Abolish FICA. Maybe it was a mistake to ever have it? This isn’t Rodger Mitchell, Randall Wray or Warren Mosler in 2012. This is FDR & a bureaucrat in 1941!

      1. Not Brain Dead

        wow

        Reading your two posts indicates you have dementia that has progressed well past the initial stages.

        I suggest you stick with simpler topics liking eating, sleeping and defecating.

        I’ll re-post the entire paragraph from your link to the obscure FDR interview here so you can reread it. Think of it as a reading comprehension test. You’ll have to make believe you are in the 1930s to get the meaning of words like “politics” and “economics” in this context.

        As far as writing down any of your thought process – you really shouldn’t.

        ——————————————-
        In the course of this discussion I raised the question of the ultimate abandonment the pay roll taxes in connection with old age security and unemployment relief in the event of another period of depression. I suggested that it had been a mistake to levy these taxes in the 1930’s when the social security program was orgiginally adopted. FDR said, “I guess you’re right on the economics. They are politics all the way through. We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”

        1. F. Beard

          Reading your two posts indicates you have dementia that has progressed well past the initial stages. Not Brain Dead

          So he made a mistake. I’d still bet Calgacus understands money and macroeconomics better than you or most anyone else either including so-called economists.

        2. Calgacus

          First, thank you very much for the (undeserved) compliment, F Beard.

          But what was my mistake, Not Brain Dead, or F Beard? I am so stupid, NBD, that I still don’t see it. I would be grateful for an answer, and would not mind at all being talked down to. I like to learn from everybody.

          Yes, they were the immediately previous sentences. So what? I took them out of their historical context. So what? My judgment was that the abstract suggestions & observations and the indication of the superior understanding of economics back then were what was important, not the particular situation of the day. And as far as I can tell, that is the attitude of others who have liked that bit of history.

          1. F. Beard

            Sorry. It was a stretch to call it a mistake. Certainly what’s his face’s criticism was extremely harsh and unjustified.

          2. Nathanael

            The politics haven’t changed. It’s still important for people to be able to say “I paid for that government benefit!” in order to hang onto it politiclaly.

            The only alternative is to make sure EVERYONE gets the benefit; then people can just say “I did my civic duty, I voted, I registered for the draft, therefore I deserve it!”

            This works best with something like Medicare-for-All. Social Security accrues to too few people (only those over 65 and those who are disabled).

          3. Calgacus

            Thank you for the reply, F Beard. I value your judgment, so was concerned I was badly confused about something.

            I agree very much, Nathanael. The politics haven’t changed, because they are based on reality, on things, on economics everyone already knows. On “MMT” – which is just explaining what everyone already knows. Which is what the best science, philosophy and mathematics does.

            That is why the Job Guarantee is so much more important than income guarantees. The bad guys know this very well. They can be OK with giving the rabble, (non)working people something for nothing once in a while, because this cannot work for everything, in the long run, universally, so it can be used to divide and rule.

            But something for something? Giving the marks what is rightfully theirs? This can, must and does work forever. Having people understand why a government job is their right, as a matter of logic, of reciprocity, would put the con men out of business, forever.

    6. Lambert Strether

      If you decide to be born so that, 60+ years on, the banksters haven’t burst one of their bubbles, you can do well. But if you decide to be born at a bad time, you do badly. Diabolical, or no?

      That’s why Social Security is a form of social insurance, a way to make sure elders don’t starve and die in their own sh*t because of the boom and bust cycle. I call that the very reverse of diabolical, but YMMV.

    7. okie farmer

      I asked my banker cousin once when he was arguing to put all SS funds into the stock market, if that might have the effect of forcing Congress into doing all in their power to prop up the stock market, augmenting the Fed’s effort to do the same.

      He said, “I never thought of that.”

  6. Johnny Transient

    Robert Reich perhaps? “dislodging them from their fixations on such matters as education and training and even immigration and trade.” These fixations have always annoyed the thinking gentry. What was NAFTA about anyway? A swell of college educated techies from the rust belt would sustain and grow their middle class lives once the jobs flowed away to cheaper exploitable labor? Didn’t we just hand trust and faith to bandits, with the neo-libreal belief they would do ‘the right thing’? Deregulate the so-called free market, let ‘em run wild.

  7. petridish

    I know that James Galbraith is a celebrated economic thinker, but did the words “intuitively obvious to the most casual observer” come to anyone else’s mind?

    1. jake chase

      James Galbraith is not a celebrated economic thinker; his father was a celebrity economic journalist who popularized the thinking of Veblen but got most of the answers entirely wrong. He did have a good sense of humor but was done in by a perverse attraction to the Democratic Party and a particular weakness for Kennedys. Read his books, The Theory of Countervailing Power and the New Industrial State, for a romantic apologia for corporate rule.

      1. ScentOfViolets

        J.K. the Elder merely a “celebrated journalist”? Most definitely not true, as anyone familiar with history knows (You did know about his other stuff, like his report on the effectiveness of aircraft during WWII, right?)

        And his “apologia” for corporations was actually an “apologia” for big organizations, namely, that as long as people demand the things that only big organizations can supply, well, there will be big organizations. Hardly an apologia, iow.

  8. Teejay

    J.G. would you expand on the meaning of,
    consequences and relationship of “see
    no evil economics”? It’s a deeply
    intriguing way of describing what’s
    occured. This is an economic version of
    learning the Sun doesn’t revolve around the
    Earth and Newtonian physics is wrong.

    1. No Know

      As in physics, the challenge is to shun the “see no evil” economists. Their “see no evil economics” will die of natural causes!

  9. rps

    Considering economic theories about Labor and the current systems of distribution, production,compensation, and profits in an age of automation; we understand that fewer laborers are necessary. Government’s complicity with the bankers have “created” a Catch 22 industry of money creation called the Financial Industry.

    Money is an abstract that once upon a time was interdependent on Labor. For the past two decades, the Financier’s “Industry” (claiming they produce a tangible product themselves) have uncoupled the train engine; the Laborers from the by-product of their work; compensation/money. The true value is in the products necessary to perpetuate the continuity of the commonwealth such as food, clothing, shelter, infrastructure, education, etc…. Instead the financiers claim that the Laborer is inconsequential, and that “money creation”/debt aka electronic chits (paper currencies moving towards extinction) and metals are the engine of the train. I suggest the financiers and their servants; the embedded economist priests, dine on a three square happy meal of glittering metals, colored printed paper, and electronic numbers.

  10. rps

    I remember when we were told that automation and technology would provide more leisure time. Who knew it would be standing in the unemployment line, welfare line, food pantry line, etc…. In my opinion, economics never advanced out of the stone-age mentality as production and efficiency were streamlined in the Industrial and Technology Revolutions. The archaic belief that “One must work to survive” is deeply embedded and has proven to be outdated. The reality is there are fewer jobs and this do not meet the increase in population. Unfortunately, the progressive revolutions are chained to the stone-age mindset of survival of the fittest; those who have jobs to exist in society. We are in desperate need to accept the extinction of this belief, and formulate reality-based solutions in the distribution of resources for the prosperity of all people.

    “I must study Politicks and War that my sons may have liberty to study Mathematicks and Philosophy. My sons ought to study Mathematicks and Philosophy, Geography, natural History, Naval Architecture, navigation, Commerce and Agriculture, in order to give their Children a right to study Painting, Poetry, Musick, Architecture, Statuary, Tapestry and Porcelaine” (JA to AA, May 12, 1780) John Addams.

    1. Rcoutme

      It is not automation that leads to fewer jobs. Such claims came from the guilds in the 1800′s. One of the best examples was that of the stockings industry. After the guild was told to take a hike, the 2-3k workers who may have lost their jobs were replaced by hundreds of thousands of workers making the products. Why? More stuff was made. Thus: automation is not the problem. Automation should (according to all economic theory that I know of) allow much more of the products to be produced.

      The problem then becomes: how do we retrain the workers to perform the tasks that can not be done by automation?

      If one considers automation to be a problem that should be thwarted, then it would be necessary to get rid of washers, dryers, dishwashers, vacuum cleaners, automobiles, and a whole host of other things.

  11. Zlati Petroff

    There are so many questions to ask and points to make.

    I. You could argue (and many economists would) that capital gains are in fact due to demand for real, valuable skills.

    To have capital gains you need to have capital to invest. To have capital to invest, you need to have income greater than current consumption needs. To have income greater than current consumption needs, you need skills that help you generate that income.

    So I think it’d be good to have more clarity around the argument that capital gains are not, in fact, additional compensation for producing value with your skills and then simply deferring consumption.

    I don’t think anyone can argue that someone with no skill and no income can somehow start receiving capital gains out of thin air.

    For those who want to make the deceptively easy argument that some (and only some) people get capital gains from inherited assets, the exact same point holds: at some point in time somewhere SOMEONE had to have had the skills to generate excess investable income for those capital gains to be possible.

    II. Capital gains and fees for lending do accrue to the wealthy by definition. You are wealthy precisely because you have capital- you have a skill that has allowed you to produce the excess income necessary for you to accumulate wealth.

    And once you have the capital (and are by definition in the “wealthy” group) it is only natural that you receive compensation for lending it to others to use.

    I am not sure what is inherently wrong with this. My concerns in this area are very specific: the possibility that highly complex lending products exploit asymmetric information and cognitive limitations to force unwanted products on unsuspecting borrowers. For example, how many households knew that their money market funds lent to Bear Stearns in the repo markets???

    But that’s a far more exact issue than a generic concern that the wealthy somehow extract unfair profits from the poor by demanding returns on their capital. That’s just a natural process.

    III. By how much should we downsize the financial sector? Which parts of it should we downsize? How should we implement the downsizing? What is the financial sector, exactly? Does it include hedge funds and securities law firms or is it just investment banks? A credit union also distributes capital; should we downsize credit unions?

    1. F. Beard

      And once you have the capital (and are by definition in the “wealthy” group) it is only natural that you receive compensation for lending it to others to use. Zlati Petroff

      You confuse money with real capital. Example: Do bankers lend real skills or do they lend a government enforced monopoly money supply that we are all forced to use? Or why should a bunch of people with skills and other capital need to borrow someone else’s money? Why shouldn’t they be able to create their own money backed by their capital?

      In the Great Depression, we had the spectacle of 25% of the population being unemployed DESPITE abundant energy and other resources, abundant skills and work ethic, and abundant need and desire for goods and services. What was missing was mere money in the right hands. That tragic, absurd lack was a (the?) major cause of WW II which killed 50-86 million people.

    2. LeeAnne

      …I don’t think anyone can argue that someone with no skill and no income can somehow start receiving capital gains out of thin air.”

      Begin with inherited wealth -by the unborn.

    3. Min

      “I am not sure what is inherently wrong with this.”

      Perhaps one thing that is inherently wrong with it is inheritance, people being born to wealth. The rise of capitalism shifted wealth and power away from the aristocrats. But the concentration of wealth and power that it leads to, along with inheritance, can give rise to a new aristocracy or plutocracy.

      Also, no man is an island. Individual wealth rests upon the provisions of the rest of society. Who gets what and how much is not a natural process, but a human one. Power allows people to extract rents, i. e., to get more than their share. And money gives people power.

      1. Zlati Petroff

        I anticipated your (and LeeAnne’s) inheritance argument because it’s incredibly easy to make and so obviously wrong.

        And I addressed it just a couple of lines below the lines that you quoted.

        I love good discussion but it’s exceptionally hard to have one when people don’t actually bother to take the other side’s whole thought process in (of course I’m also often guilty of this, so I can’t justly complain- just point it out and try to be a better man myself).

          1. Zlati Petroff

            Yes. That someone else did. Which by definition means that someone else had the skills necessary to produce income in excess of consumption. That’s the only way to accumulate capital.

            No one inherits wealth from a magic hat. Someone inevitably worked for it. So to say that capital accumulation is not the result of skill demand is a little out of line with reality. It is the result of demand for someone’s skill. And the capital accumulation is, generally, reward for producing in excess of consumption. We can argue all day over examples of cases in which that is not the case (i.e. wealth through accounting fraud), but it usually is.

          2. F. Beard

            That’s the only way to accumulate capital. Zlati Petroff

            Again you conflate money with real capital. Or how did 25% or so of the real capital (assuming skills = real capital) in the US get destroyed in the US during the Great Depression?

            The truth is that the banks have a government enforced/backed usury for counterfeit money (so-called “credit”) cartel by which they loot the rest of the population.

          3. Carla

            @Zlati: “No one inherits wealth from a magic hat. Someone inevitably worked for it.”

            I presume you have heard of slaves. Or perhaps, if you are not familiar with the history of slaves and slave-owners, you might have heard of wives.

      2. Zlati Petroff

        I do agree with your last point that society is essential to success and therefore to wealth accumulation.

        I also tend to agree that it is possible for powerful groups to extract unfair rents by locking themselves into positions of power and holding them via feedback loops rather than merit.

        But that doesn’t mean we should undermine the entire system of lending and finance, which works well most of the time. We just need to focus on specific, concrete, and identifiable issues within the system and address them directly.

        No point in being a revolutionary all the time. Sometimes all you need is evolution.

        1. F. Beard

          “But that doesn’t mean we should undermine the entire system of lending and finance” Zlati Petroff

          Usury from one’s fellow countrymen is FORBIDDEN in Deuteronomy 23:19-20 and condemned elsewhere in the Torah.

          As for the need to consolidate capital for economies of scale, common stock is an ideal, ethical private money form that “shares” wealth and power rather than concentrates them.

        2. Min

          Who is talking about undermining anything? Marriner Eccles, in his testimony before the Senate in 1933, said that he was not proposing to soak the rich but to save the rich.

          The American ethos of self-reliance was perhaps best exemplified during frontier days. Take a look at “Have Gun, Will Travel” episodes. That show was a morality play for traditional American values. It is not so much about mountain men off in the wilderness as about people facing hardship and challenge and working together. That was the main story of the frontier.

          1. Zlati Petroff

            So how is any of this related to the article or to my original post? The article openly advocates downsizing the financial sector because it is exploitative. I don’t see where the justification for that is, nor do I understand the mechanics of how we’d realistically go about the kinds of transformations argued for.

          2. F. Beard

            I don’t see where the justification for that is, Zlati Petroff

            “Credit creation” is a form of counterfeiting in that it steals purchasing power from all money holders/users for the benefit of the so-called “credit-worthy” and the banks.

            Is eliminating theft justified?

          3. Masonboro

            Have Gun, Will Travel
            Wire Paladin, San Francisco

            Great “adult western” when I was in High School. However I recall the Richard Boone character was very wealthy and cultured – wine,cigars,opera, the 1% of the time, not at all a frontier character (until hired to reluctantly eliminate some baddie).

            The first time I remember Jon Voight was on this show.

            Jim

        3. bulfinch

          Again you conflate money with real capital. Or how did 25% or so of the real capital (assuming skills = real capital) in the US get destroyed in the US during the Great Depression?

          I think the conflation of capital = skills is actually more clunky. Among other basic differences, skills/labor cannot compete or move around on the global scale as freely as capital does. There is a saying that when you punish capital, it goes away; the same cannot be said of skills/labor.

    4. patricia

      Zlati: You are insisting on what you wish was true. In your wish-world, no one makes money illegitimately, no one steals and gets away with it, no one uses their money to extract more money from those who have less, no one lies or takes advantage of the power-position that money grants them, no one produces cheap goods on scarce resources to make that extra buck, no one merely shuffles money around to make more money just because the system hasn’t explicitly disallowed it.

      Even in order to do any of the above, some skills are required, of course. Any successful thief has a good skill-set, for eg. It is not merely having/using a skill-set that qualifies one to “deserve” whatever they can get.

      And when it comes to money, there is no “natural process”. If a society is intelligent and ethical, an economic structure is created for the greater good of that society. But whatever structure is set up, the processes only appear “natural” because that is how it has been structured to occur.

      1. Zlati Petroff

        Economists recognize the possibilities for theft; as do I. More serious and prevalent, I think, is the exploitation of information asymmetries to gain unfair advantages in markets (i.e. to straddle borrowers and investors with assets and debt they don’t fully understand or by selling products whose value is hard to measure objectively).

        But I spoke to this issue in my original post, so I honestly have no idea why you are bringing it up as if I haven’t.

        My whole point was that we need to address specific instances of wrongdoing or exploitation, which are absolutely not the norm. I see no reason why we should want to attack the entire financial sector or the entire 1%. That’s dangerous and pointless and will ultimately yield no results. The system as a whole works well and has produced untold prosperity for millions of people.

        What we need serious, focused problem solving. For example, I’d like to see more done towards improving transparency in the repo markets and simplifying the legalese that appears in many consumer credit contracts.

        But the whole thing about “shrinking the financial sector” and such in the article seems deeply unserious to me.

        1. F. Beard

          The system as a whole works well and has produced untold prosperity for millions of people. Zlati Petroff

          The system killed 50-86 million in WW II alone.

          Think we’ll survive WW III?

        2. LeeAnne

          Zlati, I see no reason why we should want to attack the entire financial sector or the entire 1%. That’s dangerous and pointless and will ultimately yield no results. The system as a whole works well and has produced untold prosperity for millions of people.

          Please see my reply below. I mistakenly put it further down in the thread.

      2. Carla

        @Patricia: “Zlati: You are insisting on what you wish was true. In your wish-world, no one makes money illegitimately, no one steals and gets away with it, no one uses their money to extract more money from those who have less, no one lies or takes advantage of the power-position that money grants them, no one produces cheap goods on scarce resources to make that extra buck, no one merely shuffles money around to make more money just because the system hasn’t explicitly disallowed it.”

        Methinks you are giving Zlati an awful lot of CREDIT. Way too much.

  12. Schofield

    “See no evil economics” is the inability to understand the “free-riding” part of human nature and see that “It’s hard to have an Invisible Hand without an Invidious Hand.”

  13. prisoner number 993

    James Galbraith: “In the United States, the government has the power to bring the financial sector under control. It should use that power….”

    I’m confused, is he referring to the same US government that brought the world such joys as the war in Iraq and Abu Ghraib?

    That encouraged GIs to parade naked, chained Iraqis throughout the city?

    The same US government that allowed guards to commit sexual assaults on Iraqi prisoners with objects including truncheons, wires and phosphorescent tubes?

    Where, without even counting the piling-up of bodies and the dogs, we saw CIA agents making Arab males strip, forcing them into girdles and net stockings, then forcing them to sodomize pigs, while taking photographs that were sent to the prisoners’ village and all his close relations.

    Where hooded prisoners were forced to masturbate, and where various forms of torture and humiliation were inflicted on prisoners, such as urinating on them, pounding on detainees wounded legs with collapsible metal batons, pouring phosphoric acid on detainees, sodomizing detainees with batons, tying ropes to detainees legs or penises and dragging them across the floor, etc?

    According to James Galbraith *this* government should bring the financial sector under control?

    1. Doctor Brian Oblivion

      Perhaps overqualified then.

      I think he might be referring to people in positions at the SEC and Justice perhaps, not the military.

      I do share your aversion to inhumane treatment of prisoners and especially at the public’s acceptance of say indiscriminate use of drones against civilians and other authoritarian activities sanctioned by Congress under the magical unity pony, but these are different sectors of the empire.

  14. Jack

    JG, you say the bankers have a formula for locking down congress. What we the people need is a formula for locking up the bankers. Its pretty obvious that congress is not going to do that, so your two solutions to the problem;

    “1) enforce the laws against financial fraud and 2) downsize the financial sector as a matter of public policy”

    simply will not happen. Why do you keep repeating them? Insanity?
    ————–
    Exactly right. “One practical way would be to create a truly independent, effective and well-financed financial crimes enforcement unit, beyond the control of the political appointees at the Department of Justice, Treasury and the captive regulatory agencies.”

    Where would the political will and interest come from to create such measures. Who currently in power would have a political interest in pushing for such things?

    —————————–
    Locking up banker or better, hanging them, is precisely the measure needed. The crisis in this country rests on a sea of corruption and criminality. Bill Black has made that abundantly clear, as well as complete impunity for their crimes.

    1. Min

      During the Great Depression, in the US the Pecora Commission played a pivotal role in bringing bankers down from their pedestal. The bankers did not see it coming. The term, ‘bankster’ was coined back then.

      1. jake chase

        Pecora was after JP Morgan. He was working for Rockefeller who hated JPM. The Roosevelt- Rockefeller connection has never been adequately expored. Who benefitted the most from the New Deal and WWII? Rockefeller. Whose oil interests were threatened by Japan? Rockefeller. Think about it.

        1. beowulf

          If Pecora was working for Big Oil when he took down JPM, maybe Old Man Galbraith was right about Countervailing Power after all.

          Its curious that Tsy Secretaries seem to come either out of Wall Street or the Oil Patch, and the Big Oil guys–Connolly, Baker, Bentsen– actually seem to do a better job of it (I’d throw in Jessie Jones too, never a Tsy Sec but he ran the Reconstruction Finance Corporation for years before Truman demoted him to a cabinet post).

    2. Doctor Brian Oblivion

      I say repeat and repeat often until a significant minority or majority hear it and agree and begin to demand it.

      It may have taken years of playing the refs with “liberal media” to reinforce 100% cheerleading all the time in the poodle press, but that didn’t stop the screamers to continue to yelp and howl at reportage that didn’t bootlick with gusto instinctually, no matter how baseless the charges were.

      Better to go insane or hoarse repeating these demands than to go quietly into the 19th century, methinks.

      Abolish the banks in favor of state run credit union type institutions whose mission is serving the community and the public backed up by regulations and regulators who actually believe in regulating?

  15. Susan the other

    Economies grow (inflate) one victory at a time. The US has always gone to war for natural resources. WW2 was for oil. VIetnam was for mineral wealth in the Shan States (Gore Vidal). Today’s war seems to be to be the southern mountains of Afghanistan and their vast mineral wealth as well as to maintain control of oil distribution, a slightly expanded objective. And closely associated with this goal is keeping the price of oil/energy high so Canada can develop its expensive-to-develop tar sands. If tomorrow’s war is with China, it will once again be for their mineral wealth.

    You almost have to ask yourself if the financiers would be so egregiously greedy and aggressive in a world that controlled the exploitation of these resources. All value lies in natural resources and the products made from them. Maybe instead of taking control of the finance industry, we should control the distribution of natural resources. A rationing of resources would control growth. That, in turn, would control “financiers.”

    1. Hugh

      I think it is WordPress. Every once in a while it just keeps me off a thread or prevents me from posting a comment more than a couple of lines long. What is disconcerting is that the content of the comment and its wording seem to have little or no relation to this.

      1. jake chase

        My experience exactly. I have vowed to stop making comments but simply cannot help myself. Its called Naked Capitalism Addiction. I think the cure is to buy a radio station.

  16. Petey B.

    Fantastic interview.

    However, it seems to me his main conclusion is “when the rich get poorer, inequality goes down”.

  17. Hugh

    In a lot of ways this is a muddle that a clear view of kleptocracy would clear up. First, we really should be talking about wealth inequality not income inequality because it is the cumulative effect, the concentration of wealth over time, that locks up the majority of a society’s resources in the hands of a few.

    Second, it isn’t just finance that is the culprit. Nor is it an agentless phenomenon. It is a criminal enterprise, looting, by and for a single class, our elites. Understand this and you avoid these silly formulations: Finance is responsible for the inequality so government should rein in finance, … er that is if government weren’t bought and paid for by finance. Look at this from a kleptocratic perspective and you get a much simpler and fuller account. It is all the power centers controlled by the elites that are in on the looting: politicians promote it, the judiciary protects it, regulators turn a blindeye to it, media propagandizes for it, and academics issue defenses of it.

    Again take the kleptocratic perspective and you see how meaningless the political distinctions are. The neoliberal Clinton was never on the left but even if he had been it wouldn’t have mattered. Just as it would not have made any difference if he had been a Republican instead of a Democrat. The nation would have had a corporatist enabler of kleptocracy either way. So the idea that inequality increased during his Presidency is completely unsurprising.

    Similarly, who cares if some voters prefer to be ripped off by a corporatist Democrat rather than a corporatist Republican and vice versa? And besides isn’t Galbraith making a fairly obvious point that reflects greater urban concentrations on the coasts and in the North as opposed to less urbanized and/or lower populations areas in the South and West?

    Seriously, how much longer are these so-called liberal economists refuse to see what is staring them in the face? How much longer are we going to let them?

    1. jake chase

      Hugh, you have nailed it. As to how much longer, that depends on how long they continue getting paid to sugar coat reality with corporatist mumbo jumbo. Religion has lasted, what, five thousand years? Any signs that those pushing it are giving up? Let’s face it: toadyism pays pretty good.

    2. Zlati Petroff

      Who are these “elites”? The NWO perhaps or the Illuminati?

      Or do you mean Larry Page and Sergei Brin, Bill Gates, Larry Ellison, Michael Dell and other people that changed the world so that you can complain about inequality on a blog instead of complaining about starvation in an alley?

      1. F. Beard

        They most likely changed the world with purchasing power stolen from the rest of the population via loans from the counterfeiting cartel, the banking system.

      2. rps

        Seriously, you jest. Would there have been a Gates, Jobs, Page, Ellison, Dell, etc… if there wasn’t a Thomas Edison, Alexander Bell, or Morse? Want to go back further, why not Emy Nother, Pythagorus, and Hypatia?

        Each generation adds to the foundation for the next generation to rise upon. “[We all] owe on every principle of justice, of gratitude, and of civilization, a part of that (wealth) accumulation back again to society from whence the whole came.”

      3. LeeAnne

        The entire finance sector needs to be attacked and dismantled because the combined FIRE industries are now 40% of the economy compared to 7% prior to the ugly disparities in wealth and income existing now.

        This has happened by hollowing out the resources of the country, its infrastructure; the productivity, experience and knowledge of its people, and by dismantling the rule of law intended to keep finance in check from repeating its tendency to operate at the expense of the productive side of the economy where whole societies have been destroyed and horrific world wars have resulted.

        Things are now skewed against the productive sector to provide annuities and rents for the non-productive, pencil pushing, lawyered-up class.

        There’s nothing legitimate or worth preserving to warrant protecting this system by which the finance sector achieved this control over the population, the security sector, law making, and the military. Finance can be driven back. Start with a real return to Glass Seagal, strengthening of Social Security, a single payer expansion of Medicare -ending the ‘drug wars.’ Shrink the prison system, forget about private/public banks that’s another tax on the public -on and on. End securitization of residential real estate and return to a system of professionals providing one-on-one banking services to mortgagees, etc.

        I don’t understand what it is you are arguing for.

        1. Carla

          LeeAnne, I am with YOU. All the way.

          But how? Voting doesn’t matter because the Republicrats won’t do it.

          All I can see to do is support Occupy, support all efforts at Public Banking and Medicare for All, and sign on at http://www.movetoamend.org.

          But the Dems are doing everything they can to co-opt these movements and neutralize them.

        2. Rcoutme

          To break the power of the finance industry, one would have to break the power of the two political parties. The only way that I know of to do that would be to change our voting system. That would require an amendment to the Constitution–one that our representatives and senators would oppose.

          Never the less, the way to change the voting would be one of several options: have proportional representation (see Canada, UK, etc.) Have voting such that one puts a first, second, third, and so on priority on where his vote goes. This permits the person to vote for his most favored choice without indirectly helping his least favored choice.

          These are just a few of the things that would likely be necessary to help level the playing field again. In the end, I believe that any truly just society is unlikely as that would be a catastrophe for Satan and his minions.

  18. Doctor Brian Oblivion

    Would William Black take a fully funded special elite prosecutor / investigator position with 1 billion guaranteed funds to organize and manage a team with investigative / enforcement powers that would be independent of legislative / executive branches for a fixed / extendable term starting at two years?

    Why isn’t a blue ribbon panel or something of that nature being set up to study and propose a replacement for the industry which seems bent on a coup? Surely funding something along those lines with the few dollars we have left is better than waiting to be turned into dogfood….

  19. Anonymous Jones

    I was skeptical about the provenance of this interview because I assumed JG would focus on the US and the interviewer had less familiarity with this country than other potential interviewers.

    I was wrong (not really about the focus on the US but rather the selection of the interviewer). I really enjoyed the interview. Thanks, Phil.

  20. jiminy

    Engineers have done far more to increase technology than entrepreneurial clowns like gates and that apple dude, although they are adept at exploiting inventions created by others. Kind of like the music labels exploiting you know, actual musicians by stealing their royalties.
    Some people just are acoustic wealth worshipping cannabis.

  21. jiminy

    I wrote: “sycophantic wealth worshiping wannabees,” but my android spellchecker improved on it!

    1. Rex

      That’s funny! I was trying to parse that last sentence without much success. You had just been talking about musicians so acoustic didn’t seem out of context but the closing phrase did not seem to convey a final point that made sense no matter where I tried inserting extra commas. The best I could come up with was that maybe the last word had been consumed to arrange the previous ones.

      This isn’t the first time I have read a comment and was unable to make sense of it. Now if, in some future comment, I find myself working too hard to extract an intended meaning, I’ll just stop and think — DROID!

Comments are closed.