Yes, Virginia, Rich People Are Not the Same as You and Me. They Cheat More.

When middle class and low income people complain about the lousy ethics among what passes for our ruling classes, they usually shrug it off as jealousy, class warfare, and/or the sensationalism.

Guess what? Conventional wisdom is right.

The video below from PBS (hat tip Scott) presents research by Dacher Keltner, Paul Piff, and other academics at UC Berkeley into absolute and relative poverty. They that found in a number of different setting that affluent individuals were more likely to cheat than less well off people, even over things like candy and points in a game of chance. Admittedly, which the plural of anecdote is not data, I’ve had the experience they depict in one of their experiments, that people in fancy cars more likely to enter pedestrian crosswalks when pedestrians are in them than other drivers. I was in Rockport, Maine, which if you’ve been there, is a tourist destination and has lots of pedestrian crosswalks on the major streets. I was about to step into one when an Audi came downhill, and I could see that the driver could clearly see me. But she zoomed through, close enough that I gave her rear bumper a good whack with my trusty shooting stick (if I has wanted to be vindictive, as opposed to just send a message, I could easily have broken her side mirror or dented the side of the car instead). She had the nerve to make a fast U-turn and come back to scream at me that she had been driving too fast to stop and who was I to hit her car? I told her she’d just confessed to her traffic violation in front of a witness (my brother) and allowed me to get her license plate number.

In addition, the researcher replicated the “better off is correlated with worse behavior” even in a game setting. When one participant was given advantages relative to another, they got ruder in subtle and sometimes overt ways.

That does not necessarily mean all rich people behave badly (in fact, I’m surprised at how much another stereotype holds true: that old money types make a point of being gracious, no matter what the status of the other person), but it does confirm the widespread perception that money and status go to some people’s heads. But even more interesting is that the publication of what ought to have been a not terribly controversial finding elicited a firestorm of criticism.

Floyd Norris of the New York Times wrote up new research on a related topic: that CEOs who engage in bad conduct, even speeding, are more likely to commit fraud. So Jon Corzine’s speeding (and resulting accident) could have served as an early warning to MF Global investors.

To beat F. Beard to the punch:

Matthew 19:24: And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.

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  1. scraping_by

    Oh dear.

    The chicken and egg thing is going to come up hot and heavy.

    I don’t know if anyone’s counted up the people who got rich from being sneaky vs. the number of people who started out rich and stayed that way by cutting every corner they met.

    But it’s like a lot of questions about where the circle begins: the answer is, who cares?

    Ropes. Lamp posts. Rich people. Assemble.

    1. Yves Smith Post author

      Did you watch the video? They tried to deal with that in the game where they made people rich by giving them advantages relative to the other player. The privileged guy started to act like a jerk. So the causality seems to run “more status leads to worse behavior”.

      But this is also America in the 21st century, ground zero of neoliberal might makes right. I suspect the results are culture-dependent (as in studies where people were given the opportunity to share in games where the other side could reject the offer if he thought it was not fair and leave the person making the offer with nothing produced very different outcomes in different cultures as to what a fair distribution was). And as I indicated, old money tends to defend its standing versus new money by bending over backwards not to act like jerks.

      1. Jim Haygood

        ‘Old money tends to defend its standing versus new money by bending over backwards not to act like jerks.’

        Yeah. Also, they have better art on the walls.

        However, one can’t assume that a driving a luxury car connotes wealth. Half of them are leased, often by penniless poseurs who can barely make the payments. Those are the ones with the biggest anger issues.

        Didn’t Warren Buffett used to drive an old Dodge Dart?

        1. Charles LeSeau

          This was a point made in Paul Fussell’s Class – A Guide Through the American Status System. His contention was that old money tended to view automobiles as somewhat vulgar utilities and they were just as likely to be seen in an ancient Buick as anything flashy, despite having much more sophisticated aesthetic tastes in all other ways compared to the nouveau riche. Granted, that book is now 30 years old, and “old money” in the US often doesn’t mean what it does elsewhere in the world!

          I remember the quote, paraphrased, was something like: “Mercedes is the automobile of African dictators and Beverly Hills dentists.”

          1. Jim Haygood

            Precisely the reference I had in mind. Fussell claimed that the rich seem to purchase cars based on the price per pound, which means not paying up for the supposed prestige of a foreign marque. He also said they tend to drive slowly and erratically, rather than rapidly.

      2. Uncle Bruno

        One of the main limitations of experimental research is the lack of mundane realism. The results of the Monopoly experiment shows that Berkeley psych undergrads are proficient at playing at being rich. But I expect that’s one of the main appeals of playing the game; that players get a turn at being “money bags.” Monopoly is pretend.

        That’s very different from actually being rich and/or doing what it takes to get there, such as accepting the high-paying job that compromises your integrity. Fixing aluminum prices is real. That’s different.

        Lots of trust fund kids take a turn at “playing poor.” Old money folks do tend to be gracious–probably because they’re secure in their status–and are even reasonably generous with their investment incomes. But try to go after the principal and watch them release the hounds.

      3. diptherio

        The causality can easily run both ways, at least to some extent, since someone who becomes wealthy through luck and subsequently turns into a jackass will then end up modeling that unethical behavior for his/her children. Those children will therefore (I imagine) be more inclined to unethical behavior themselves, which will help them maintain and improve their economic position.

        But overall the causation does seem to run from economic/social status to behavior and not vice-versa, since putting wealthy people in the disadvantaged position in the Monopoly game experiment caused them to act more humbly and generously (i.e. more human).

        Despite this, much like any dysfunction (abuse, neglect, etc.) I think this one can be “passed down,” as it were, generation to generation. But just like how not all children of alcoholics become alcoholics themselves, not all children of rich people behave like a-holes.

        That’s my take on it, anyway.

      4. lord acton

        Lord Acton said “Power corrupts” and “Absolute power corrupts absolutely”. And we see that money = power. Therefore, we can restart his quotes as:

        – Money corrupts.
        – The greater the concentration of money, the greater the corruption.

  2. Richard Kline

    One inference we can draw in this is ‘rich/high status folks tend to behave worse.’ I would on the whole invert the result to highlight a different conclusion: egalitarian behavior tends to be socially imposed.

    This is something I have inferred both directly and indirectly from research in psychology for some long time. I wouldn’t say that the conclusions are that clear, but the leanings are. Egalitarian behavior and ‘honesty’ tend to be maintained by social constraint, i.e. you pay a price for failure to comply. That doesn’t mean that individuals don’t internalize these values: We do, and it is critical that we do. But not everyone internalizes them to the same degree, so that in the absence of contraint we maintain our behavior as comparably restrained. Instead, remove constraint and most inviduals will NOT restrain their behavior internally. Indeed, because _external_ constraint is both persistent and pervasive it stands in for internal constraint, we lean on outer boundaries like ethical crutches. Thus, individuals often do NOT have good practice at constraining themselves even if they are inclined to do so. The ‘ethical muscle’ tends to be weak since the context will often reliably say NO. When wealth/status allows one to simply walk away from or around external constraint, those ethical muscles often prove weak to begin with, and can atrophy further the more there ‘push back’ can be neutralized or evaded. It isn’t that the rich are better than us, or worse, but that they are ‘weaker’ because they don’t get ethical push back from their context.

    Money and power tend to quite reliably corrupt. There are few if any societies where a great personal supremacy of resource or power doesn’t skew behavior negatively. This is exactly because those so enabled can discount or disregard the disapproval of others. Most if wealthy enough to inflate to John Galt size prove raging dirt bags. To me, this has long been the key argument for massively restraining individual accumulations of wealth. We can’t rely on the good will of those so hyper-powered; in fact we can rely upon their ill will. The rich ARE different: they are much, much weaker internally. Sad, but to a large degree that thing called ‘human nature.’

    1. Jim Haygood

      ‘Most if wealthy enough to inflate to John Galt size prove raging dirt bags. To me, this has long been the key argument for massively restraining individual accumulations of wealth.’

      All well and good, if not for the unfortunate fact that those doing the restraining invariably morph into raging dirtbags themselves, by dint of exercising such vast power.

      See Animal Farm and Edward Snowden for further details.

      1. diptherio

        This is our ethical weakness: that we have been content to turn over the restraining function to individuals, rather than taking communal responsibility for it.

        I think of the village in Nepal. There, when someone does something unacceptable the whole village is involved in restraining that person. There are no cops and so no one to lay the responsibility onto for “serving and protecting” everyone else. Therefore, everyone in the village takes part in the protection of everyone else and of the communal peace.

        But we have grown too lazy for that. We prefer to pay officials to restrain anti-social behavior. Then, of course, those officials end-up being without restraining influences which, as you point out, has predictably poor results.

        Ideally, each citizen should be both “watchman” and “watchman watcher,” then the paradox of who watches the watchmen needn’t arise…to my way of thinking.

    2. Banger

      Not just social constraints but legal ones. In the United States legal outcomes are usually a function of your ability to hire the right lawyer.

    3. from Mexico

      Richard Kline said:

      Instead, remove constraint and most inviduals will NOT restrain their behavior internally.

      I don’t believe that’s true. I think a lot more accurate statment would be “Remove constraint and some individuals will not restrain their behavior internally.” In fact, studies show that only about 30 to 40 percent of individuals in the United States fit the abstraction of “economic man” and “act in a purely egoistic way” (Elinor Ostrom, “Policies that crowd out reciprocity and collective action”).

      As Ostrom goes on to explain:

      The extensive empirical research presented in this volume and elsewhere (see reviews by Bowles 1998; Frey and Jegen 2001; E. Ostrom 1998, 2000) challenges the assumption that human behavior is driven in all settings entirely by external material inducements and sanctions. Instead of assuming the existence of a single type of ‘‘profit maximizing’’ or ‘‘utility maximizing’’ individual, a better foundation for explaining human behavior is the assumption that multiple types of individuals exist in most settings. Among the types of individuals likely to be present in any situation are ‘‘rational egoists,’’ who focus entirely on their own expected material payoffs. Neoclassical economics and non-cooperative game theory have usually assumed that rational egoists are the only type of player that scholars need to assume in order to generate useful and validated predictions about behavior. Substantial research in nonmarket experimental settings now provides strong evidence that in addition to rational egoists, many settings also involve ‘‘strong reciprocators,’’ who are motivated by both intrinsic preferences and material payoffs. As discussed in this volume, strong reciprocators will frequently adopt strategies of conditional cooperation and conditional punishment in settings where individuals can observe each other’s behavior.

      As Ernst Fehr and Urs Fischbacher point out, strong reciprocators outnumber utility maximizers in the United States, and “roughtly 40 to 50 percent of the people exhibit strongly reciprocal preferences (Ernst Fehr and Urs Fischbacher, “The economics of strong reciprocity”).

      And as Fehr, Urs, and Simon Gächter explain in another paper:

      This paper provides strong evidence challenging the self-interest assumption that dominates the behavioral sciences and much evolutionary thinking. The evidence indicates that many people have a tendency to voluntarily cooperate, if treated fairly, and to punish noncooperators. We call this behavioral propensity ‘strong reciprocity’ and show empirically that it can lead to almost universal cooperation in circumstances in which purely self-interested behavior would cause a complete breakdown of cooperation. In addition, we show that people are willing to punish those who behaved unfairly towards a third person or who defected in a Prisoner’s Dilemma game with a third person. This suggests that strong reciprocity is a powerful device for the enforcement of social norms like, e.g., food-sharing norms or collective action norms. Strong Reciprocity cannot be rationalized as an adaptive trait by the leading evolutionary theories of human cooperation, i.e., by kin selection theory, reciprocal altruism theory, indirect reciprocity theory and costly signaling theory. However, multi-level selection theories and theories of cultural evolution are consistent with strong reciprocity.

      So all this new research takes direct aim not only at neoclassical economics, but at the evolutionary theories formulated by Sewall Wright, Ronald Fisher, J.B.S. Haldane and George C. Williams, which were later interpreted for a popular audience by Richard Dawkins.

      1. Dan Kervick

        But I don’t think that research looks at the question of how those reciprocators would behave after prolonged removal of constraints.

        1. from Mexico

          Seems like I remember Yves somewhere along the way citing some research that strong reciprocity varies from country to country. If that’s so, that would indicate that it’s not innate.

          1. diptherio

            She is referring to a cross-cultural study on the “ultimatum game.” The researchers found that the results varied considerably from culture to culture. I don’t know if the results of that study can be directly mapped onto the concept of “strong reciprocity” or not.

            Here’s the relevant paper (or at least one of them):

            While typical U.S. results produce a mean offer of 40%, a mode of 50% and few offers below 20%, the Machiguenga proposed a mean offer of 27.5%, with a mode of 25%, and many offers of 15%. Similarly, Machiguenga responders, with one exception, always accepted—many offers of 15% were accepted. Whereas, Americans frequently reject offers below 20%. These results seem to be very different from what has been observed elsewhere.

        2. Nathanael

          Dan: that’s basically a genetics vs. environment question. I don’t think it’s very interesting.

          The more interesting result is the following.

          If you have a small minority of “cheaters” who cheat egregiously and are not expelled from society for their cheating, they *will* destroy the society and everyone will die including them. This is the result from animal studies.

          Regardless of whether the cheaters’ behavior is an aberrant gene or aberrant upbrining, the lesson is that you can’t afford to let *serious, egregious* cheaters get away with it.

    4. lord acton

      >> Money and power tend to quite reliably corrupt.

      Money = power

      After that, we only need remember/repeat Lord Acton’s simply stated observations.

    5. Nathanael

      “Egalitarian behavior and ‘honesty’ tend to be maintained by social constraint, i.e. you pay a price for failure to comply. That doesn’t mean that individuals don’t internalize these values: We do, and it is critical that we do. But not everyone internalizes them to the same degree, so that in the absence of contraint we maintain our behavior as comparably restrained. Instead, remove constraint and most inviduals will NOT restrain their behavior internally. ”

      This matches with the studies of bird societies, chimp societies, wolf societies, etc. etc.

      In a typical study, based on observation, the various individuals were classified as “conformers” (who followed the rules) and “cheaters” (who stole extra food while nobody was looking, usually; or had sex with indidivuals they weren’t supposed to; etc.) Incidents fo cheating were carefully documented. (First, the society was studied long enough to figure out what the typical food distribution and sex rules *were*).

      Now, the level of cheaters was generally kept down to a tolerable level because serious cheaters were subject to terrific punishment when caught: explusion, usually.

      In societies where the punishment of cheaters was *too* aggressive, the society ended up spending too much of its time hunting cheaters and ended up poorer (measured by food, body weight, # of kids, stuff like that). Society can tolerate a small level of cheating and just blow it off.

      But in socieities where the punishment of cheaters was too *lax*, the society usually collapsed and everyone got eaten by predators, or something equally bad.

      This is considered to generate an equilibrium, biologically, with a small percentage of cheaters.

      1. Nathanael

        In most birds and fish, it’s generally believed that the propensity to cheat is genetic (though this has NOT been proven). If this is correct, then the evolutionary pressures would tend not to *eliminate* the “pro-cheating” genes, but they tend to prevent them from becoming *dominant*, because if they become dominant, the whole society dies. This is “balancing selection”.

        It’s easier to see this stuff in animals with short generation times.

        1. Nathanael

          If you knock out genes which are required for the “enforcement” behavior, however, the cheaters will destroy a society very quickly. (Those studies were kind of unethical IMHO… poor critters…)

  3. skippy

    Being a mother is the toughest job in the world – no matter how many helpers you have. Career? I’ve got one, I’m an Ascot mum.

    Career? I’ve got one, I’m an Ascot mum.

    June 19

    She saw it and just HAD to have it – another hump day parking triumph! xo

    Career? I’ve got one, I’m an Ascot mum.

    May 31

    Some inconsiderate blue collar worker has decided to cause utter havoc on Lancaster Road with an oil spill right after I sent my newly imported nanny to fetch some more Zoloft and Veuve. The bitch better be back ASAP because Charlotte’s science project isn’t going to make itself. xo


    skippy… Anywho… my personal Fav was sister in-laws SNOB friend blowing me up for drinking beer (decent Hefeweizen) out of the bottle whilst watching avro footy. Two weeks later she sign a contract with some Greek Magnate as In-House Stepford wife, pocket monie w/servicing rights contractually agreed upon…. CLASSY!!!

    PS. money is a behavior magnifier imo.

      1. skippy

        @AbyNormal and Ms G… Here’s the thingy…

        After 50+ years around the the orb block thingo… from wealthy to homelessness (2 times), vast vistas of humanity regionally (both USA and internationally), jobs from farm, military – merc, corporate – cubed [back to front – top to bottom+], niche, construction (all of it almost), education both formal and OJT – w/consultation (global contacts with in fields [other peoples opinions], and all of this observation boils down to one thesis… someone[s set out the ****Brass Ring***…. the why and what of that action is the “thing of all things” [motive].

        Be it religion, material wealth, ologys or isms… “at the end of the day”… a bar is set… a measure… an arbitrament to what one may ascertain in this experience ***We call Life***.

        Sadly much of this is built on an uninformed past… with behavioral brass rings that negate or corrupt actual new evidence formation into new and more empirical thesis [Fog BS eradicator].

        skippy… drive an Audi Q-7 3.0 TD with kindness… always give way… think of others on the road… just the right tool for driving 1000k round trip drives in a day thingy… yet it does not change who Myself is…. Seeker and Helper [when its conducive].

  4. Kevin Smith

    Wow Yves that’s great!

    Wish I was there to see you whack that troll’s Audi!

    You’re the best!

  5. profoundlogic

    Driving is certainly indicative. Just yesterday I was essentially cursed out (lady kept the windows up so I could only read her lips) for not yielding to an entitled driver of a luxury SUV who wanted to cut across lanes of traffic and get where she apparently needed to go. Even though I clearly had the right of way, this lady thought I should stop in the middle of moving traffic and let her cut through. I was surprised by her behavior, but then again, we’ve got plenty of entitled pricks driving luxury automobiles in our area toiling long, hard hours so they can make it to the shopping mall and Whole Foods in a single day.

    1. Ms G

      egad – the safety of otherpeople not high on suv-driver-lady’s list of priorities …

      see also, link to video of san francisco Mrs. Entitlement’s behavior at Apple store …

      if we had to map these incidents on a daily basis, just for the US you would need light-years’ worth of pindots!

    2. Nathanael

      I’ve been trying, as a hobby, to figure out if I can predict bad driving behavior from the type of car driven. These are my anecdotal observations.

      (1) Anyone in a red car is likely to drive a lot worse than average.
      (2) Anyone in a black car is likely to drive worse than average.
      (3) Someone in a pickup, SUV, or minivan is likely to drive much worse than average… unless they’re driving it for practical reasons. So workmen in pickups hauling tools and equipment are better drivers than average, but poseurs with pickups are worse drivers than average. A minivan driver with 8 people in the car is perfectly average, but a solo driver with a minivan is worse than average.
      (4) Anyone in a convertible less than 50 years old is likely to drive worse than average. (“Classic car” drivers seem to drive carefully, though.)

      When I see a single-occupant red pickup with nothing in the bed, I get the hell out of the way.

  6. David Lentini

    I was in Rockport, Maine, which if you’ve been there, is a tourist destination and has lots of pedestrian crosswalks on the major streets.

    I agree with the story, and have my own experiences to support your conclusion. But as to the example, did you check the license plate? If the car was from Massaschusetts, then, having lived and driven there for many years, I’d say all bets are off. There’s a reason we call them “Massholes” here in Maine.

    1. reslez

      As a transplant from the Midwest, I found Massachusetts drivers scarily aggressive. By contrast, Californians were so easygoing they put me to shame.

      1. Lambert Strether

        Yeah, that California thing where drivers stop their cars when a pedestrian steps off the curb onto the street is nuts. “I know where you’re going, and you’re not going to hit me. So why are you stopping?!”

      2. ChrisPacific

        Speaking from experience I would say this is because a large proportion of Massachusetts drivers are from Boston, and Boston driving encourages some bad habits that are often necessary for survival in that environment but inappropriate outside it. For example, one trick I learned fairly early on was what I called the ‘forcible merge,’ which is what you do when your lane is running out and nobody in the adjacent lane shows any sign of being willing to let you in.

        When I moved out west I had to unlearn all my habits again, as I discovered very quickly that they were unnecessary and frightened the locals.

  7. Walter Map

    Relevant G. K. Chesterton quotes:

    The rich are the scum of the earth in every country.

    The Flying Inn (1914)

    Among the rich you will never find a really generous man even by accident. They may give their money away, but they will never give themselves away; they are egotistic, secretive, dry as old bones. To be smart enough to get all that money you must be dull enough to want it.

    A Miscellany of Men (1912)

    The poor object to being governed badly, while the rich object to being governed at all.

    As quoted in Grace at the Table : Ending Hunger in God’s World (1999) by David M. Beckmann abd Arthur R. Simon

    Just an aside:

    It is terrible to contemplate how few politicians are hanged.

    The Cleveland Press (1 March 1921)

    1. from Mexico

      [T]he common people do not want to be commanded or oppressed by the nobles, whereas the nobles do want to command and oppress them… [I]t is impossible to satisfy the nobles fairly without injuring others, whereas it is indeed possible to do so with respect to the people, for their wishes have more right, since they seek to avoid oppression while the nobles seek to oppress. It should also be noted that a prince can never be secure against a hostile populace because it is numerous, whereas he can be secure against the nobles because they are few.


  8. profoundlogic

    No surprise in the study’s findings, but it helps to understand why inequality is still increasing during Obama’s tenure in office. Poor economic policies have exacerbated the established trend, and the absence of elite criminal prosecutions has compounded the effect even more, helping the entitled hold on to most of that ill-gotten wealth.

    But as Lloyd would say, They’re just making markets.

  9. Bob

    Even the Lord Almighty knows: broad is the way and wide is the gate for the market-makers.

  10. Banger

    This is no surprise, of course. Rich people and people who are well-connected politically don’t suffer the same consequences under our system of “justice.” If you have money it is unlikely you will suffer legal consequences for illegal acts unless you really push it. This is so obvious I’m embarrassed to say it. There is no such thing in the United States as “equal justice under law” and it isn’t even close. Theoretically, if you squint enough you can make a case if you assume all lawyers work for free and no lawyer knows the judge and prosecutor etc. but as a practical matter it isn’t even close.

    So rich people know this and are used to this idea. Since most rich folks have rich parents–they were brought up to privilege and know the score.

    What is impressive is that the rich are as honest as they are–they certainly don’t have to be either from a legal or a social POV.

    1. Walter Map

      What is impressive is that the rich are as honest as they are–they certainly don’t have to be either from a legal or a social POV.

      How fatuous. As if the avaricious make of point of informing the public of their rapacities.

      For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved.

      John 3:20

    1. Banger

      Legally, the rich suffer fewer consequences for illegal acts and internally in terms of morals the American upper classes are far less moral far less interested in virtue than, say, the average middle class person. That seems pretty obvious.

      I’ve observed that rich folks tend to surround themselves with servants and flatters (as corny as that sounds) who will tend to not provide a break on more extravagant impulses.

      So I don’t understand your POV. Perhaps you can expand.

    2. AbyNormal

      Arrogance is a creature. It does not have senses.
      It has only a sharp tongue and the pointing finger.
      toba beta

  11. peace

    Don’t be surprised that people critique this research. Some high status social scientists are extremely critical of any research that claims that power corrupts and these individuals often put the kibosh on studies that indicate that power corrupts by preventing publication during the peer review process. Piff cleverly countered the narrative that high status, power, and assertiveness are generally beneficial. This research promotes the alternative narrative – that “might makes right” is associated with moral turpitude.

    (little time to expound or proofread…running to a vacation off the grid)

    1. from Mexico

      It certainly is a dissident narrative.

      As Reinhold Niebuhr notes in The Irony of American History, in America the Puritan belief that regarded virtue to be the basis of prosperity soon got turned on its head. Prosperity was regarded to be the basis of virtue, and the descent from Puritanism to Yankeeism was a fairly rapid one.

  12. denim

    And here you have answered the reason why the wealthy hate regulations and, of course, why try to get deregulation enacted whenever possible. Free to cheat unpunished is the essence of the “free market.”

  13. Salieri82

    I recently spent a year working as a bicycle courier in Toronto. There were two types of vehicles I always rode especially carefully around: taxis and luxury cars. I would assume, for my own safety, that whoever was behind the wheel of that BMW simply didn’t care whether or not they hurt or killed me. That attitude saved me from serious injury many, many times.

    1. BondOfSteel

      Yep. I ride a Vespa in a large US city. The three vehicle types I really watch out for:

      1) Taxis. They really don’t wanna hit you, but they’re in a hurry and they’ll make crazy lane changes and not see you.

      2) Luxury cars… especially white ones. I don’t think they care if they hit you. They’ll see you and merge anyway.

      3) New, large Pickups. Beware the road rage.

      1. Nathanael

        I live in an area with few enough taxis that I can’t comment on that.

        Luxury cars are common enough here that I don’t see much difference between them and other cars.

        The “poseur pickup” effect is really, really obvious though. People driving pickups full of tools for business are extra-careful drivers, but people driving Penis Substitute Pickups tend to be *terrible*.

    2. Yves Smith Post author

      OMG I forgot an even better (older) fancy car asshole incident.

      I am in a cab going down 5th Avenue. Busy time of day and just below Empire State building. Normally traffic is jammed right above Empire State building due to tourist comings and goings @ Empire State, but today it’s busy below too. So cars are packed closely but moving in each lane. We are in the far right lane, and cars are parked on 5th.

      A guy in a white Mercedes pulls into traffic, no warning, no signal, no looking, nothing. There’s no space for him to do that, my cab brakes hard but he winds up hitting the Mercedes.

      Mercedes guy proceeds to have a fit and threaten the cab up one side and down the other, clearly plans to sue. I get out and tell him he was all in the wrong, he didn’t have the right of way and he didn’t begin to look and I’d be a witness to that if he tried suing.

      A woman traffic cop saw the whole thing and comes over and tells the Mercedes drive he was wrong and like me gives her info to the cab driver.

      The Mercedes guy looks like a pumped up angry gorilla who just got caught in a deluge. He’s still furious but also looking perplexed that no one is buying his story and worse he might not be able to get the cab driver to pay (as in I’m sure Mr. Mercedes’ insurance will pay for his damage BUT when they can’t recover from the cabbie, his rates will go up).

  14. Crazy Horse

    The tribes of the Pacific Northwest coast had a markedly different concept of wealth than Capitalist Man. The purpose of accumulating wealth was to be able to throw the biggest party (potlatch) and give away the most, thus increasing your prestige in the tribe.

    Adopting such a belief system would do wonders for the problem of wealth maldistribution that capitalism systemically creates. However I doubt if individuals like the Koch Brothers or Larry Ellison can be voluntarily convinced to join the potlatch system. Therefore I propose that the potlatch be mandated by law. Each year the richest 1000 individuals should be required to give away half of their net worth. If they fail to do so they should be lined up on the lawn of the White House and executed by bow and arrow.

    1. Michael Fiorillo

      Or better still, for it’s symbolic value, execute them by pressing (having heavy weights placed on their chests) gold bars on them, which would them be liquidated and distributed among the populace.

  15. F. Beard

    To beat F. Beard to the punch: Yves Smith


    A gracious woman attains honor, and ruthless men attain riches. Proverbs 11:16

  16. pebird

    So, the justification for regulation is not fairness, but to keep the psychopathic leadership : general population ratio low enough to avoid social collapse.

    I can work with that.

  17. Z

    In regards to this, I think there is a bit of perpetuation in the dynamic in that quite often the more that people can “get over” on others, the more contempt that they have for them … the less that they respect them … the more that they believe that they are better than the others … the more that they think the others deserves to be taken advantage of … and hence the even worse that they treat the others. That’s why incentives in a society are so important and part of the reason why our “greed is good” country is in such a mess.

    I’ve seen the dynamic play out in some marriages where one of the actors cheats on the other and gets away with it. Once they are done dealing with their intitial feelings of guilt, instead of continuing to feel guilty about it, they actually have less respect for their mate because they have “gotten over” on them (essentially their mate wasn’t able to figure out that they had been cheated on) and end up treating their mate worse and with less respect for the “sin” of essentially trusting them.

    If people are not brutally honest wtih themselves and don’t hold themselves to account, the human mind can come up with all kinds of rationalizations and damaging mechanisms to relieve its owner of negative feelings/distressing thoughts and basically toss away chunks of the owner’s morality and ethics in the process. A conscience is a terrible thing to lay to waste and when it is, it’s difficult to reclaim.


  18. clarence swinney

    The Republicans took control of the North Carolina Governorship and legislature.
    How? I believe the computer program was written whereby each straight Democratic vote became a Republican vote. I voted a straight D ticket and on review it was R. It is not hard to write a program
    to do that. Any others note same problem?

    1. Nathanael

      Which county are you in?

      Some counties in NC have real elections on paper ballots, others have electronic machines with “paper trails”. So enough complaints and you can get things counted….

      This is a lot better than Georgia, where everything is conducted on straight-up electronic fraud machines. Georgia’s elections have been stolen on those machines; the evidence is overwhelming, from elections which didn’t match the exit polls at all, to the mysterious “rob-georgia” file inserted on the machines shortly before the election.

  19. Dan Kervick

    I think studies like this show what is wrong with much of the liberal thinking of the past few decades. The trend in that thinking has been to argue that equality and inequality don’t matter in themselves very much. So long as the tide is raising all boats, it doesn’t matter if some boats are raised much higher than others.

    But it does matter. A society is not just a mere sum of its individuals. Inequalities of status and privilege cause behaviors and attitudes that undermine the social fabric.

    1. LifelongLib

      I don’t see equality as everyone being the same, but everyone being in the same boat. A kid starting out just needs a place to hang her hat. Someone who’s worked hard for 30 years or so should be able to buy the nice house by the lake. But both should be equal before the law, both should be able to access things like education and health care without fearing they can’t pay.

  20. Ms G

    I have not seen a better rendering of the Goldman Sachs Aluminum cheating story anywhere. Here it is (2 part video) care of John Oliver who is replacing Jon Stewart (for not long enough, alas).

    The bits about the new Monopoly game (without “Go to Jail”) are fabulous as well.

    Laugh-out-loud funny political-economic (class warfare) satire with lots of accurate information, to boot.

  21. Walter Map

    It is impossible to overestimate the sheer destructive rapaciousness of many Amerikan corporatists. They are quite determined to arrange for mass murder and genocide to enrich themselves.

    How bad can it get? Presently they are planning for nuclear war for fun and profit, which will no doubt result in the deaths of tens or hundreds or thousands of millions of people. To them, it’s all good. That’s how bad it can get.

    It’s one thing to anticipate the severe decline of civilization resulting from the deliberate failure to prevent economic and ecological collapse. But it’s another thing to know that current policy has been formulated to nuke quite a lot of it, if not all of it, right off the planet.

    After that, you can expect that things will start to turn ugly.

    “We’re not going to make it, are we? People, I mean.”
    “It is in your nature to destroy yourselves,” said The Machine.

    Amerika, bleiche Mutter!
    Wie haben deine Söhne dich zugerichtet
    Daß du unter den Völkern sitzest
    Ein Gespött oder eine Furcht!

  22. allcoppedout

    “Human nature is not a machine to be built after a model, and set to do exactly the work prescribed for it, but a tree, which requires to grow and develop itself on all sides, according to the tendency of the inward forces which make it a living thing.” “Such are the differences among human beings in their sources of pleasure, their susceptibilities of pain, and the operation on them of different physical and moral agencies, that unless there is a corresponding diversity in their modes of life, they neither obtain their fair share of happiness, nor grow up to the mental, moral, and aesthetic stature of which their nature is capable.”
    John Stuart Mill, On Liberty (1859)

    The classic paper on lying was probably this from 1996:

    What should be researched is how nearly everyone in a crimogenic situation lies and performs criminal acts such as selling PPI (and the rest). The classic experiment would be to close all banks and re-open them as utilities and then unwind the ‘assets’ while gathering explanations of how did what and why.

  23. Waking Up

    As Alexis de Tocqueville wrote to Madame de Swetchine, “we so soon become used to the thought of want that we do not feel that an evil which grows greater to the sufferer the longer it lasts becomes less to the observer by the very fact of its duration;”

  24. Dean

    Yves, I have truly enjoyed reading your work over the years and believe you have made a valuable contribution to the dialogue on markets and regulation. This post was absolutely shameful. It stokes the same uneducated prejudices that Sean Hannity stokes when he implies the poor have a broken moral compass.

    1. John

      I hate the rich now that my eyes have been opened to their crimes.

      I despise them. I want to choke when I am around them.

      They are all criminals.

    2. Charles LeSeau

      Maybe power seekers and the unambitious/disenfranchised will never see eye to eye, but I do question what goes on in the minds of the former group quite a bit, and there does appear to be a lot of cheating and collusion going on in their set – and through something like all recorded human history too.

      Yves does mention in her post that not all wealthy people act this way, if that’s any consolation. Unsure if Hannity would ever issue such a caveat, because I don’t watch him. But gut instinct says no.

      As an aside, not related to your complaint: In the first line Yves points out also that criticism of the wealthy is usually shrugged off as jealousy (and class warfare and sensationalism). The jealousy bit is absolutely common and cracks me up every time. It’s one of my favorite rentier class Molotovs, actually, because it’s so easily tossed back at them as long as we drop conventional wisdom that these people are to be worshiped. The whole assumption works on that level, but it shows a funny double standard. People by and large are not jealous of the morbidly obese for having more food than the rest of us, so why is there a tacit assumption that we should be jealous of wealth and property gluttony? Isn’t it just morbid wealth & power obesity?

  25. Lafayette

    When a country adopts so profoundly into its value system the primacy of money, one should expect such behaviour.

    All societal contexts are based upon values. Values with which we are inculcated first in the house and then in school and further on by adopting those “currently fashionable”

    As the saying goes in business, “Go along and get along” – so we learn to parrot the values of the business that provides our wages. Some do, in fact, get bothered with the degree of value-affiliation that is required; and they opt out.

    Others think it is a necessary facet of the “rat-race” and achieving success. Because success is obviously having obtained a great deal of money, regardless of your personal ethics or behaviour. It does not really matter how you made the money. It only matters that you did.

    You see, it’s a game – and the purpose of any game is to win. Who remembers losers?

    This is the society that America has built, particularly over the past 30-years since taxation has been lowered to such ridiculously low levels that entire fortunes are made overnight. The temptation is profound and the cultural recognition appreciated greatly as well.

    Some hold the (perhaps naive) view that higher taxation takes the incentive out making bundles of money, which will remedy this societal fault. After all, some of the highest taxed countries in Europe still manage to create millionaires, though perhaps not billionaires.

    And that seems important in America … that is, to enter into the exclusive valhalla of billionaires, way beyond millionaires, where ass-kissers abound and people will fawn about you offering servile displays of exaggerated flattery and affection.

    After all, you gotta lotta muney- and that’s the name of the game …

  26. Bobito

    Perhaps people are more likely to be rich if they are dishonest. This hypothesis seems to explain the observation as well as does any other.

    Certainly in many cultures such an explanation is taken for granted.

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