Obama Administration Considering Tackling Financial Services Pay

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Before anyone gets hysterical, the focus of the efforts by Team Obama on financial services industry pay appears to be to force the industry to stop rewarding undue risk taking.

As much as I have been critical of many Administration plans, this, at least in concept, is a good one.

Why? Because I sincerely doubt Team Obama will do more than set guidelines and principles. and that may not even prove necessary if they show enough resolve.

If the industry wasn’t so predictably out to keep all its perquisites despite its horrific performance, this sort of effort would not be necessary. We’ve had some fulminating by Goldman CEO Lloyd Blankfein, plus an earlier line of thought in a Financial Times comment mainly on the failings of risk management:

More generally, we should apply basic standards to how we compensate people in our industry. The percentage of the discretionary bonus awarded in equity should increase significantly as an employee’s total compensation increases. An individual’s performance should be evaluated over time so as to avoid excessive risk-taking. To ensure this, all equity awards need to be subject to future delivery and/or deferred exercise. Senior executive officers should be required to retain most of the equity they receive at least until they retire, while equity delivery schedules should continue to apply after the individual has left the firm.

This would take the firms a fair bit of the way back to the old partnership model. Funny how they were more careful about risk when it was their own capital on the line. But the exposure in those days was even greater, since the partners are personally liable. LTCM managed to blow itself up even though its principals have almost all of their money invested it. Yes, this would be a huge step in the right direction, but I wonder if any model that involves limited liability, other people’s money, and a government backstop (which we now know is guaranteed for big players) is still a troublesome mix.
almost nothing in the way.

But fine sentiments are no substitute for action, and there seems to have been perilously little, save UBS’s malus plan, in which much of the bonus is put in escrow and may be reduced if some of the recipient’s actions are found to have been damaging to the bank.

The problem with any action on the bonus structure front is that it needs to be reasonably broad based. One firm acting alone, save perhaps Goldman, is likely to expose itself to defections if its program is too far out of line with industry norms. Thus if the industry has any sense, Team Obama’s pressure will presumably elicit responses from the industry.

Note that some of the ideas being bandied about apply to traditional lenders, such as banning rewards based on meeting volume targets, which creates incentives to ignore loan quality.

From the Wall Street Journal:

The Obama administration has begun serious talks about how it can change compensation practices across the financial-services industry, including at companies that did not receive federal bailout money, according to people familiar with the matter.

The initiative, which is in its early stages, is part of an ambitious and likely controversial effort to broadly address the way financial companies pay employees and executives, including an attempt to more closely align pay with long-term performance….

Among ideas being discussed are Fed rules that would curb banks’ ability to pay employees in a way that would threaten the “safety and soundness” of the bank — such as paying loan officers for the volume of business they do, not the quality. The administration is also discussing issuing “best practices” to guide firms in structuring pay.

At the same time, House Financial Services Committee Chairman Barney Frank (D., Mass.) is working on legislation that could strengthen the government’s ability both to monitor compensation and to curb incentives that threaten a company’s viability or pose a systemic risk to the economy…But any legislation passed would make it harder for policy makers to dial back limits once the financial crisis subsides…

Yves here. Please. That last sentence is editorializing. How many rules and laws went unenforced in the last cycle? And if bad incentives lead banks to take risks that pose a danger to the system, which they have, trying to influence their practices is not a bad concept. Have we forgotten that banks run off the cliff like lemmings at least every ten years?

The bigger point is that banks are subject to taxpayer backstops. That puts them in a very different category than most businesses. Since the banks have abused their access to the public till, more intrusive policies are called for. Back to the article:

Regulators have long had the power to sanction a bank for excessive pay structures, but have rarely used it….

Government officials said their effort, which is just beginning, isn’t aimed at setting pay or establishing detailed rules. “This is not going to be about capping compensation or micro-management,” said an administration official. “It will be about understanding what is the best way to align compensation with sound risk management and long-term value creation.”

Despite the banking industry’s weakened state, it would likely try to push back against curbs on how financial firms can compensate people. Bank executives have complained to federal officials that strict rules could prompt some of their best employees to move to parts of the financial industry that aren’t regulated, such as hedge funds, private-equity firms and foreign banks. They’ve also argued that paying substantial bonuses is integral to how the industry works….

During a recent congressional hearing, Chairman Ben Bernanke said the Fed was working on rules that will “ask or tell banks to structure their compensation, not just at the very top level but down much further, in a way that is consistent with safety and soundness — which means that payments, bonuses and so on should be tied to performance and should not induce excessive risk.”

In an indication of how broad the effort may become, Federal Deposit Insurance Corp. Chairman Sheila Bair said regulators need to examine compensation practices in the mortgage industry, suggesting new limits could stretch beyond banks.

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    I agree this is a sound measure in theory, but in practice (even if it gets past the lobbyists intact) a smart bankster will simply hedge his exposure to the equity he gets in compensation by shorting it or buying puts, and then go on as before.

  2. attempter

    The objection to this are going to be the same tedious, fraudulent nonsense, while the truths remain the same:

    1. As emphasized in the post, the government backstop automatically renders these kept entities. Even if they never receive a cent of taxpayer money, they still benefit from the knowledge of this backstop.

    2. As touched on in the post, these entities are allowed to incorporate and benefit from limited liability at all only through the gratuity of the government. There is no obvious rational (and certainly no constitutional) imperative for this. So if the government allows the FIRE sector such privileges, it can certainly impose conditions on such largesse.

  3. B. Mull

    Don’t really care how they divide their pie. What I want is a bunch of little pies, so if a few get burned we still get to eat.

  4. Namazu

    Without a concrete proposal, it’s hard to know whether this is a bad idea, but it’s clearly the wrong idea. Government’s proper role, and most effective way of addressing the root problem is to tackle industry structure. C, BAC, GS, and so on, are thoroughly undeserving of FDIC insurance in their current form. Remove asymmetric risk to the taxpayer and let boards figure it out at the level of the firm (or have them go under like in the old days). Comp. restrictions could easily become another hollow diversion like the AIG salary flap.

  5. Independent Accountant

    I read this article in the WSJ today. I do not expect anything substantive to come of it. I agree, the various regulators have been able to limit bank pay in the past, but haven’t. I made the same point about GSG as you, i.e., when it was a partnership it was careful about the risks it took. The WSJ again seems incapable of separating its news from editorial pages. For shame.

  6. Jim T

    Well I’m not too fussed about regulations for any company that has had to take Government handouts of any kind (TARP, TALF. etc….) during this crisis, but that is absolutely where the line gets drawn.

    Going beyond that “Comrade” is getting a little TOO BIG BROTHER / TOO BIG GOVERNMENT for me.

    I wish we could wake up from this nightmare now, before TEAM OBAMA completely exploits this crisis to turn our once great nation into a socialist disaster!

    And as if you needed any more reasons to hate the idea of this HUGE GOVERNMENT INTERVENTION into private enterprise, House Financial Services Committee Chairman Barney Frank (D., Mass.) would have HIS STENCH ALL OVER IT TOO.


  7. Kid Dynamite

    i can’t believe how far off the boat you guys are with these comments: i agree that IF the gov’t is going to implicitly backstop the banking industry (which is ANOTHER debate all together) THEN they need to manage the risk in the industry…

    note: they need to manage the RISK in the industry – NOT the compensation! The problem isn’t that loan officers are incented to make quantity over quality loans – the problem is that the loan officer’s supervisor is incompetant and signs off on the loans.

    the problem isn’t that a trader gets paid more if he makes more money – the problem is that banks are over-levered…

    the reactionary policy making which tackles the wrong part of the formula is ridiculous.

    as i’ve mentioned to others this morning: this is like saying we should cap pay in MLB to prevent steroid use – because high salaries result in desire to achieve performance which results in drug taking… OR, we could regulate it from the DRUG side, like we do! and test for drugs! that way, we catch the people who violate the rules, not ALL the people.

  8. X

    The result is bound to be absurd as long as we do everything possible to avoid doing the right thing. Why make this complicated? The one and only right thing to do is break up too-big-to-fail firms. There is no need to limit compensation in any way if they are playing with their own money and that of willing investors. As long as financial firms can fail when they fail, it doesn’t matter what the compensation structure is. It is only a problem when taxpayers are forced to pay the salaries of failed firms that this is an issue.

    As long as there are too-bigs no amount of compensation regulation is sufficient, but without too-bigs none is needed. Hmmm, what should we do? It is all just so complicated I’m not sure if we can ever figure it out.

    I guess this is what it is like to live inside a Dali painting.

  9. Doc Holiday

    We need to return to a process where compensation is 100% linked to common share dividends and then remove all option grants or bonus mechanisms which are not aligned with common ownership. Options dilute shareholder equity, period — end of friggn debate. The SEC, in all its corruption and Congress with all its corruption will obviously not bring about a condition to provide an honest market — because they are all linked to lobby groups that feed off option grants and derivatives and means of fraud!

    As an aside, this seems current:

    In The Affluent Society Galbraith asserts that classical economic theory was true for the eras before the present, which were times of “poverty”; now, however, we have moved from an age of poverty to an age of “affluence,” and for such an age, a completely new economic theory is needed. Galbraith’s main argument is that as society becomes relatively more affluent, so private business must “create” consumer wants through advertising, and while this generates artificial affluence through the production of commercial goods and services, the public sector becomes neglected. He points out that while many Americans were able to purchase luxury items, their parks were polluted and their children attended poorly maintained schools. He argues that markets alone will underprovide (or fail to provide at all) for many public goods, whereas private goods are typically ‘overprovided’ due to the process of advertising creating an artificial demand above the individual’s basic needs. This emphasis on the power of advertising and consequent overconsumption may have anticipated the drop in savings rates in the USA and elsewhere in the developing world.[4]
    Galbraith proposed curbing the consumption of certain products through greater use of consumption taxes, arguing that this could be more efficient than other forms of taxation, such as labour or land taxes. Galbraith’s major proposal was a program he called “investment in men” — a large-scale publicly-funded education program aimed at empowering ordinary citizens. Galbraith wished to entrust citizens with the future of the American republic.

    From : John Kenneth Galbraith http://en.wikipedia.org/wiki/John_Kenneth_Galbraith

  10. Brick

    Whatever the rules they will most likely be circumvented somehow and at some point we will be in need of a few more quality bankers in the London or Offshore. That the risk reward mechanism in banks was completely wrong is not in doubt, but to be honest looking at any CEO’s pay or movie star’s or sports personality you could say the same thing. If you do not regulate your financial institutions pro-cyclically and tax in a way which spreads wealth then the results are as expected. I don’t know what the answer is, but a wishy washy code of conduct for banks sounds more like a platitude to voters, rather than an significant action.

  11. Doc Holiday

    This fits in here on many levels:

    “In late 2006, Krugman said, “We have only a modest amount of direct evidence that technological change is driving increased income inequality.” Now his explanation incorporates power and politics: “The government can tilt the balance of power between workers and bosses in many ways—and at every juncture this government has favored the bosses.” The minimum wage has withered, tax policy favors the rich, the administration blocked corporate reform, thus allowing CEOs to reward themselves at unprecedented levels, and perhaps most important, “There has been a concerted attack on the institutions that have helped moderate inequality—in particular unions.” This is Krugman at his “pleasantly contentious” and “usefully dangerous” best. Somewhere, John Kenneth Galbraith is smiling.”

    From: The ‘Usefully Dangerous’ Economist

    the lies of the powerfulThis also fits in after cereal:

    Heads Will Roll

  12. DownSouth

    Jim T,

    I must say, I find persons like yourself highly frustrating to deal with, but on the other hand, most intriguing. This is so because you offer prima facie evidence that debunks the very economic theory that you espouse so passionately. Your behavior belies the concept of “economic man” which serves as the underpinning for all classical and neoclassical economic theory.

    As Amitai Etzioni wrote in The Moral Dimension: Towards a New Economics, “neoclassicists have labored long and hard to show that practically all behavior is driven by pleasure and self-interest.” And yet, we find you here arguing zealously on behalf of the Chrysler and GM dissident bondholders (see comments to yesterday’s post
    “Credit Default Swaps Holders Likely to Force GM into Bankruptcy”). From yesterday’s thread it became apparent you are not a bondholder nor are you paid council for the bondholders. So how to explain this non-self-serving behavior within the neoclassical paradigm?

    And again today we have you here arguing passionately on behalf of the 99.5 percentile incomers. I assume you’re not a member of this club that has a median income of $450,000 per year, for if you were you most likely wouldn’t have the spare time to spend here on NC that you do. So again, how to explain this behavior within the neoclassical paradigm?

    This would not be such an important issue if such “irrational” behavior were exhibited by only a handful of people. It’s not. George W. Bush hobbled together a coalition of slightly more than 50% of the electorate, 99% of whom would not benefit, in purely financial terms, from the economic policies that he promoted. So how does one explain such mass “irrational” behavior?

    Kevin Phillips in American Theocracy estimates that 50 to 60 percent of the Bush electorate was made up of “fundamentalist, evangelical, and Pentecostal Protestants” whose “faithful flocks” concentrated on “morality, salvation, biblical guidance, a possible rapture, and the countdown to Christ’s return” to set their economic priorities.

    Andrew Bachevich in The New American Militarism identified another large “irrational” constituency in the Bush coalition. This was the military. And here he’s not speaking of the military-petroleum-industrial complex that stands to gain financially from militarism. He’s speaking of the professional soldier who seeks to “redeem the military profession,” restoring its “status,” “esteem,” and “the prestige and prerogatives of the profession of arms.” These too voted largely for Bush.

    But there was another significant chunk of the Bush coalition, one formed by what can only be called “irrational rationalists.” These were the true believers in orthodox economics and its offshoots whose own self-interest was poorly served, or even suffered, due to the very doctrines and policies they espoused so fervently. These include the libertarians, the neoliberals and a goodly part of the New Atheists. And it is these that Reinhold Niebuhr spent so much effort analyzing in his chapter “Justice Through Political Force” in Moral Man & Immoral Society, and in his essays “Ideology and the Scientific Method” and “The Children of Light and the Children of Darkness.”

    One hallmark I’ve discerned about the “irrational rationalists” is the amount of passion they always bring to the debate.

  13. doggett

    DownSouth said

    “George W. Bush hobbled[sic] together a coalition of slightly more than 50% of the electorate, 99% of whom would not benefit, in purely financial terms, from the economic policies that he promoted. So how does one explain such mass “irrational” behavior?”


  14. DownSouth

    @Doc Holiday

    “The ‘Usefully Dangerous’ Economist”

    If by some chance you happened to miss it, make sure and read Yves’ link to the MIT study that delves into this subject in great depth:


    It explores some of the competing theories out there on the subject of exorbitant compensation but ends up citing empirical evidence that supports Krugman’s position.

  15. Hugh

    This is all kabuki. Undefined limits on compensation in its early stages? Could anything be more nebulous? We really have to distinguish between what is serious and what is not. If the government were serious about such limits, they would announce detailed guidelines together with a exposition of the failures that necessitated them.

    Just a few weeks ago we were told that hedge funds didn’t want to sign on to Geithner’s loony PPIP precisely for this reason. Goldman and some of the banks were going to “repay” their loans ostensibly to avoid compensation limits.

    What this tells me is what I already know. There is chaos at Treasury and Geithner and Summers continue to flail around thinking this will somehow produce a coherent, effective plan.

    Returning to serious approaches: treat capital gains as income, eliminate stock options, and tax bonuses and other compensation (you fill in the threshold) at a 90% marginal rate. You want limits? These are limits.

  16. i like tuesday

    This is a feeler that will probably be part of the financial regulatory reform package that’s coming down the pike in the next couple of weeks. There are big changes afoot. Geithner gave a little sneak preview this morning.

    Larger institutions will have to hold more capital against a broader array of activities, decreasing leverage. A Systemic Risk Regulator. Regulatory arbitrage will be gone as oversight will be greatly simplified. Hedge funds, derivatives will be regulated. Non-bank financials will no longer be able to conduct banking activities outside the regulatory structure. All institutions, regardless of size, will be subject to FDIC resolution authority. There will be an LCFI resolution fund, separate from the DIF, funded by the relevant banks that eliminates the subsidy they currently enjoy from smaller banks courtesy under the deposit insurance system.

    The entire financial system is being redesigned to be able to sustain itself through a major failure. This means that the provision of credit in the economy is about to become a public utility where “basic credit products are standardized”. There will be explicit opt-out notices required to access more exotic products. Sounds like Goulsbee, no?

    My view is that in the new model of the industry, there simply won’t be room for excessive compensation for what appeared to be profits for a few quarters or so. Financial services is going to give up the illusion of being amazingly profitable over the short term only to have the profits evaporate in crisis and make actual profits over the long term without recourse to taxpayer largesse. From what i heard from Geithner this morning we might want to rethink the cognitive regulatory capture thing, he was singing my song. Those that work in the industry are going to take a paycut because the Treasury doesn’t view forming bubbles through the misallocation of capital for self-enrichment as the public good.

  17. DownSouth


    Ah, if it were only so simple.

    But unfortunately, as Etzioni wrote, “neoclassical decision-making theories are much more prescriptive than descriptive.” Undoubtedly, if only we could just click our heels and somehow, magically transform everyone into a P-utility maximizer, the world would certainly be a much simpler, more predictable and more pleasant place to live:

    Every era has a currency that buys souls. In some the currency is pride, in others it is hope, in still others it is a holy cause. There are of course times when hard cash will buy souls, and the remarkable thing is that such times are marked by civility, tolerance, and the smooth working of everyday life.~
    –Eric Hoffer

    But lamentably, as Niebuhr pointed out, the “complexity of modern society, with its multifarious economic and social groups, which refuse to accept the destiny assigned to them by a consistent logic of economics,” precludes that from happening.

    And yes, stupidity does have a great deal to do with it. As Niebuhr goes on to observe:

    Society will probably never be sufficiently intelligent to bring all power under its control. The stupidity of the average man will permit the oligarch, whether economic or political, to hide his real purposes from the scrutinity of his fellows and to withdraw his activities from effective control.~

    But it is hardly a fair fight between the average man and the oligarch, for the oligarch has at his disposal an army of economists, military and security “experts,” public relations professionals, preachers, polsters, reporters, pundits and politicians to carry his message to the far corners of the land and repeat it ad infinitum.

    And I’ve noticed that people like Niebuhr, despite my utmost respect for him, pulled his punches when it came to criticizing the bad religion emanating from the pews of his fellow preachers. And rationalists like Phillips, whom I hold in equal esteem as Niebuhr, are quick to ascribe blame to bad religion, but downright miserly when it comes to casting blame on bad science, of which there is certainly no shortage.

    So I’m very doubtful that a uni-disciplinary solution to this problem is possible. Perhaps it will take the best critiques that men of science have to offer combined with the best critiques that men of religion have to offer to get a handle on this problem.

  18. Yves Smith

    I think some of you folks are missing the point.

    First, there is no way around backstopping the financial services industry, unless we go to what Irving Fisher called “narrow banking” where banks are severely restricted in what they do. Basically, deposits can be used only to invest in Treasuries.

    The problem is the government has made it clear that we are also backstopping bank bondholders, so even “narrow banking” won’t work. If the banks borrow money, hey, the Feds will guarantee that too.

    The other problem is that there is no will to break up banks, Thats’ a MUCH bigger intervention than setting general guidelines around pay. The howls of “socialist” would be deafening. How, pray tell, would Obama break up banks? He’d have to take them over if they refused to comply (which is why putting them into receivership wasn’t a bad idea).

    And you most assuredly cannot get around the “too big to fail” problem with investment banks. There are strong network effects in trading. Markets tend to evolve towards fewer, bigger dealers. The most you might do there is restrict risk taking, like proprietary trading.

    And I suspect the main intent of this is not to impose a regime on the banks, but to force them to come up with one of their own.

  19. i like tuesday

    Yves: I’ve been working on the issue and there actually is another way to break up the big banks besides receivership. Give them so much government capital that the only way they can possibly exit is to hive off a major chunk of their business and sell it. Not as politically messy as receivership. Just a thought.

    Obviously, Geithner expressed no interest in the idea of explicitly breaking up the large banks. They’re looking at ways to impose a higher cost for growing too large. They want a proper resolution mechanism for LCFIs and more resilient system so they can be allowed to fail.

  20. Jim T


    Not that I feel a need to justify who I am, to you or any other over educated, intellecual snob, but I’ll give you enough clues so you don’t have an aneurism trying to figure me out.

    DownSouth said…

    I must say, I find persons like yourself highly frustrating to deal with, but on the other hand, most intriguing.

    Jim T said;

    I’m taking that as a left handed compliment, but then again with my 12th grade education and the comment coming from someone so obviously of higher intelligence, it probably was meant to be an insult.

    DownSouth said…

    And again today we have you here arguing passionately on behalf of the 99.5 percentile incomers. I assume you’re not a member of this club that has a median income of $450,000 per year, for if you were you most likely wouldn’t have the spare time to spend here on NC that you do. So again, how to explain this behavior within the neoclassical paradigm?

    Jim T here;

    Notty, notty DownSouth, you make the age old error of making assumptions! You know “ASS” out of “U” but not “ME” in this case.

    To set you straight (even with my 12th grade education) I know that drives you intellectually elite, professional students crazy!

    Before I retired at the age of 44 the annual income figure of $450,000 per year was an off year, (try doubling that figure) BUT THAT’S NOT WHERE REAL WEALTH COMES FROM. That’s just making a living. Investing correctly, is the real key to wealth.

    So hitting the stock market exactly right didn’t hurt! Were you around in the mid to late 1990s? Do you have any idea of the money that was made by people fortunate enough to have bought stocks such as Yahoo, Oracle, Netscape, AOL, etc… at their IPO prices? (Stock price runs to 300 + in one day, splits the next 2,3,4 to 1 and runs to 300 again and again 3-5 times each) those were great days!

    Then to top that, having the foresight to cash it all in (1999)and walking away before the DOT.COM BUST!

    That should be enough to fill in your blanks and answer why I might think like and side with the top 0.5% American Capitalists.

  21. skippy

    @Jim T,

    You seem a straight shooter and will direct my comments in the same light. It looks like your monetary gains were insufficient, in regards to your insecurity and must be a joy to work with. You assume Downsouths stament…”I must say, I find persons like yourself highly frustrating to deal with, but on the other hand, most intriguing”…is from a lofty position above you (which it is not, he has only made an observation on your personality with in the discussion/debate ensuing) and your rebuttal is based on your educational level in terms of years completed vs your level of wealth (congrats on the good run during a bubble, how are you doing now that it takes effort) where is your whit or deconstruction of thought.

    All I see is unchecked anger with out clear reason to why it exists, times change, can you adjust to the next environment or do you prefer beggaring thy neighbors. Its seems to me you have an exceedingly narrow view of life, history and its implications down the road for all of us, out side the creation of personal wealth.

    For myself, my classical education only showed me a glimmer of what was out there to be digested, I have furthered my understanding of the human world and condition more in the years after school than when I was in, so ones level of years in school means little to me, rather what they do after wards with their time, devote all energies to wealth creation or enriching the lives of all around them with out spending a buck.

    Skippy…You said… To set you straight (even with my 12th grade education) I know that drives you intellectually elite, professional students crazy!

    Did you mean to say he was your intellectual superior “elite” or did your mean “elitist” thinking he was, anyway your sure are “fresh and bold”.

    Sorry for the breach of protocal Yves, but this guy gets my goat, he can come on the swat valley drop Ive planed, lets see him fight for his ideas.

  22. Hugh

    “And I suspect the main intent of this is not to impose a regime on the banks, but to force them to come up with one of their own.”

    Any regime the banks put on themselves is going to be a joke. It would be another case of the financial industry regulating itself and we know how well that has turned out.

    This is probably why I don’t like the term “capture”. Obama, the Congress, the government have not been captured. They have been bought and paid for. Capture makes it sound like something was done against their will. But that’s not the case. Capture merely directs attention away from the underlying issue which is corruption.

  23. Jim T

    @ Skippy

    First off re-read DownSouth's Post directed at me again. I'm sure you missed 195% of the self serving, condescending, elitist attitude he wrote his post with, not to mention his elitist assumption that I was a man of little to no means. (Again very condescending for someone who has never met me or knows anything about me)

    I'll wait!

    OK, now that you have re-read it did you pick up on it this time? Good! Now, let's see what feathers I ruffled with you.

    Skippy said…
    You seem a straight shooter and will direct my comments in the same light.

    Jim T said…
    Did you form this opinion from the posts on this topic alone or from seeing other topics too?

    Skippy said…
    It looks like your monetary gains were insufficient, in regards to your insecurity and must be a joy to work with.

    JimT said…
    Insufficient monitary gains? How many millions is insufficient? I thought I had enough, oh no. And somehow you figure I'm insecure and a "joy" to work with? Well, I'm retired so working with me shouldn't be a concern and as far as being insecure, I think you are projecting something there.

    Skippy said…
    You assume Downsouths stament…"I must say, I find persons like yourself highly frustrating to deal with, but on the other hand, most intriguing"…is from a lofty position above you

    Jim T said…
    I can read skippy (and I can tell you if you didn't read that as condescending, you suffer from low self esteem) But I can assure you I didn't read it as though DownSouth was writing it from above me, because I don't suffer from low self esteem.

    Jim T will wrap up now…
    Skippy grinding DownSouth with the High School Educated thing was to knock him off his perch a bit. To tell you the truth I have a lot of friends with Masters & PHDs too, my sister has both and is a University Professor, my childhood and current best friend is a Lawyer.

    I'm not sure where you are picking up this anger thing. But I'm not angry at you, DownSouth, Yves, Bob or any other liberals on this blog. You have the right to your opinions and I have the right to have mine.

  24. Yves Smith

    Jim T,

    You frequently type in all caps. In Internet protocol, that is yelling. So you are the one who is signaling anger.

    The people I know, including Forbes 400 members, who have a lot of money do not brag about it. Ditto people who are very successful in their professions. Your claims that you make a lot of money comes off as being insecure. You again carry yourself in a way guaranteed to get that reaction, then claim it is the other guy. Sorry, it is you. DownSouth has been commenting here for quite a while and he does not have the traits you accuse him of. As I said, you need to bone up on the concept of projection.

    I also do not understand why you come here to pick a fight (your tone is belligerent and says you DO want a fight) with people that are not buying your arguments.

  25. Anonymous Jones

    With all due respect to Yves, this wonderful blog, my favorite commenter DownSouth and the always interesting skippy, you simply could not embarrass Jim T more than his own posts do. This forum is always so much better when useless chatter is left to die out in isolation. Providing an echo chamber seems to me counter-productive, but that is just my opinion! Thanks for the great blog.

  26. skippy

    @Jim T,

    Naw mate you got me all wrong, in fact you crack me up somthin fierce. Liberal, me you jest, I’m totally against party politics (bad historical evolutionary evidence), in fact I think your just havin a go at the line you perceive to be there.

    Low self esteem yeah I’ve got a touch of that, comes from killing people for a living, only to realize later on the stupidity/horror of it and my years of putting money at the top of my to do list, silly me eh, never did much to change the perspective of myself, the advertising must have not worked properly, alas I’m defective.

    Just remember I never assigned a value to you good/bad thing, just made an observation, wrongly or rightly about your statements and their impetus, amends if you felt other wise.

    Skippy…as they say over here…don’t know you from a bar of soap…and would not make assumptions about your person out side of whats said via the electronically created pixels streaming at my eyes, you have a good one ya hear, I mean that.

  27. Jim T

    @ Skippy & Yves,

    Skippy, I didn't think through your "user name" to tag you as an Aussie. It's actually pretty obvious, silly me.

    This will probably knock you socks off to know "so am I, mate!" Have been for the last 3 years. I actually have dual citizenships and that is why I'm still very passionate about what is going on back in the States! My children, grand children, mother & sisters & their families still live there. They are the major reason I even take notice of what's going on back there.

    What's your interest with it?


    Now Yves turn,

    I'm from the "OLD SCHOOL" Yves, when I grew up we didn't have computers, mobile phones (Cell phones to you), blackberries or any of these modern day devices.

    I use "Caps" not because I'm angry, I use Caps, "—" and (—) to bring emphasis to certain things I'm saying in a given sentence. Sorry for the confusion, I'll try to controll myself in the future.

    I have nothing to be agry about! For all of you who live in Australia should know that, and for all of you back in the States, you should really think about immigrating!


  28. skippy

    @Jim T.

    A cautionary tale my newly arrived country man/commentator on this bog, I have resided in Australia now on 15 years, but like you and others I came over from America and not unlike my learning curve here (Australia/this Bog) there are rules which one may not see at first.

    In Australia and Here you attack the idea not the person, debasement of ones self is a sign of humility and grace both within this bog and this country (tall poppy syndrome), if ones comments are subject to rebuttal do not take it as an attack on ones self identity, open minds comes to the fore in this context. Vigorous debate is welcome, but not directed at said individuals for their thinking, having that said, there are well established rules here in regards to ad-homine attacks.

    It may take some time to get used too, as in America I believe everyone wears their heart on their sleeve’s IE put individualism before community (sharing for the greater good of us all/or tribalism), although I have seen an encroachment of Americanism via the exported media/lifestyle upon the collective Aussie mindset that I personally find distasteful and repulsive in the last 10 years.

    Now the dark side, as I have Prue-mentioned my past job skills/experience have enlightened me to the fact that, monies gained add nothing to ones self, save the impression said individual believes it does.

    Case in point, on one of my many adventures to Costa Rica, whilst having drinks at a friends bar (ex-soccer goalie for the national team) in a small town on the Pacific side, which we ventured to many times, some ass hat came into the bar about 10ish and proclaimed what a bad ass he was and how sought after by the ATF/DIA he was and how for no reason he would open my friends gut if he looked the wrong way at him. Well, said friend asked if I would cover his back encase of some unfortunate occurrence eventuated, too which I agreed. But unlike most I let the locals take care of the problem (it was their turf) all I had to do was go to the purveyor of the establishment and convey the facts as I knew them, the rest night went with out a drama.

    Ohh the mornings after on a live beach (no power or septics to befoul the ecosystem, 6km with maybe 10 people living off it with communal gardens to subsidize food needs) anyhow after a slow crawl back to the scene of the crime(damm the locals for the many Imperials{beer} which they proffer upon the obligatory stop by, 6 or 9 just to get into town) a short time after arrival a little birdie spoke into my ear and told me the story of some guy found upon the beach directly in front of the bar sans his passport, wallet and all manner of clothes, naked for all to see upon the sands, in a unconscious state, but alive to live another day. I still wonder to this day, if he accepted the education he rightly deserved and made adjustments to his manners.

    skippy…its a fool Paradise, until it bites you in the ass or take time to see the wildlife hiding in the forest.

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