Category Archives: Social values

On the Meaningless of Contracts and the New Optionality

An old saying is that contracts are only as good as the parties that enter into them. And the evidence is growing that when there is a meaningful power disparity between two parties to an agreement, the odds are high that the bigger player will elect to behave badly. This blog is rife with examples: pervasive contractual and regulatory violations in securitizations and foreclosures, banks exploiting not just ordinary consumers with “tricks and traps” but even billionaire clients; debt collection abuses; routine raiding of employee pensions while CEO pay and perquisites remain sacrosanct; and, of course, the pilfering of customer accounts at MF Global.

And conditions on the ground are even worse. Hoisted from comments:

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Adam Davidson Presents the Trophy Nanny as 1% Status Symbol

In his role as the Lord Haw-Haw of yawning income disparity, Adam Davidson reports on the world of elite nannies in his latest New York Times piece, “The Best Nanny Money Can Buy.” Child caregivers perceived to be good enough for the superrich (which means they might need to possess other skills, like speaking Mandarin, cooking restaurnt-level meals, being able to ride and groom horses or sailing) make big bucks!

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Mark Ames: The One Percent’s Plan for the Rest of Us – Livestock to be Milked for “Rent”

Yves here. Mark Ames’ post discusses the institutionalization of a regressive policy, that of trying to eke more corporate growth out of extracting more and more out of workers rather than sharing the benefits of productivity gains with them.

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Yes, Virginia, Heads of Nonprofits Get Egregious Salaries Too

One of the side effects of increased income disparity is the assumption in some circles that anyone who has a “big” job deserves a lot of money, whether or not the circumstances or their performance warrants it. It wasn’t all that long ago that the prevailing assumptions were radically different: CEOs (except maybe in the auto industry) did not see themselves as near royalty, and most well run businesses recognized that firing staff in downturns and rehiring was costly (search time and training are bigger costs than most top brass admit to themselves).

A great piece at the Village Voice, “The Nonprofit 1 Percent” describes how this logic plays out in the not-for-profit sector.

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David Apgar: The Trouble With Jeff Sachs

Yves here. This post echoes some of the messages of Nassim Nicholas Taleb’s article The Fourth Quadrant and our piece Management’s Great Addiction

By David Apgar, the co-founder of GoalScreen LLC, which has a free cell phone app in testing at www.goalscreen.com that helps you test what you think drives results in your job, fitness program, love life, investments, and upcoming sports events in order to determine which assumptions are helping you succeed and which ones are undermining you

Jeff Sachs has always been the most outspoken advocate of development aid so it would be out of character if he were not outspoken about becoming the head of the World Bank. But there has always been a lingering concern about his projects and his approach to development. And it sheds a lot of light on where development, economics, and politics are heading even if it’s the wrong concern.

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US Air’s Consumer Fraud, or Yet Another Reminder Why We Need Regulation

As you might know, since I gave a wee plug, I was on a panel at The Atlantic’s Economy Summit on Wednesday. Even though NC readers know much Rubinite/Hamilton Project thinking dominates the Democratic party, it was a bit surreal to see how many of its core assumptions were pretty much unquestioned, such as the belief that Bernanke did a great job in the crisis (more on that in later posts) or that regulation needed to be done judiciously if it was to be done at all (note I was on the panel that had the most people urging bolder action, but the day was dominated by “pragmatists”.)

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Bill Black: (Re) Occupy Greece

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

While the Occupy Wall Street (OWS) movement set its sights on occupying a financial center, Germany has accomplished the vastly more impressive feat of occupying an entire nation – Greece. Germany has experience at occupying Greece having done so during World War II. The art of occupying another nation is to recruit a local puppet to do the dirty work required to repress the citizens. Germany used several puppets, most notoriously the murderous Ioannis Rallis, to (nominally) rule Greece and terrify the Greek people during World War II. (After Germany’s defeat, Rallis was executed for his treason.)

This time around, Germany has been far more successful in recruiting and using a puppet to (nominally) rule Greece and terrify the Greek people before the German occupation.

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We Speak on RT TV About Goldman’s Predatory Culture and the Latest Stress Tests

I ducked out of the Atlantic Economy Summit to see Lauren Lyster of RT TV. We talked about the hot story of the day, the New York Times op-ed by departing Goldman executive director Greg Smith that decried what he saw as a deterioration in the firm’s values over his 12 year career.

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Philip Pilkington: Falling for Behaviourism – The Neoclassicals Join a New Cult

By Philip Pilkington, a writer and journalist based in Dublin, Ireland. You can follow him on Twitter at @pilkingtonphil

The hedonistic conception of man is that of a lightning calculator of pleasures and pains who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him intact. He is an isolated definitive human datum, in stable equilibrium except for the buffets of the impinging forces that displace him in one direction or another.

– Thorstein Veblen

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Philip Pilkington: Student Debt in the US Continues to Blow Up

By Philip Pilkington, a writer and journalist based in Dublin, Ireland. You can follow him on Twitter at @pilkingtonphil

Perhaps the most obvious indicator that the US has become a society of debtors is the ever-expanding market for student loans.

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Video Demonstrates How to Circumvent TSA Body Scanners

This is a bit O/T for this blog, except I hate the body scanners, since they are security theater and looting all rolled into one. The few times I’ve had to deal with them, I’ve made the gate agents pat me down.

Jonathan Corbett, who filed a suit against the TSA, has just released this video to annoy them further and with any luck, get the ineffective, intrusive scanners shut down.

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Class Warfare, Darien Style: The Cabbie v. the Morgan Stanley Executive

Those of you who have any degree of contact with the financial blogosphere no doubt caught the news today that one William Byran Jennings, the co-head of fixed income for the Americas for Morgan Stanley, was arrested and charged with second-degree assault, theft of services and intimidation by bias or bigotry and released on bail of $9,500. He has been put on leave.

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Adam Davidson Praises Economic Exploitation

There has been so much news on the mortgage beat the last few weeks that I managed to neglect one of my missions, which is my personal Ben Stein watch on Adam Davidson, who operates as the Lord Haw Haw for the 1% in his column in the Sunday New York Times Magazine.

His latest piece, “Why Are Harvard Graduates in the Mailroom?” is more accurately titled “In Praise of Exploitation.”

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