GREETINGS
FROM BEYOND THE PALE
Dr
Dawg (sic) and Antonia
Zerbisias are shocked
beyond measure:
'The Bloggers Who Read KMG'
(With apologies to HM
Bateman)
Kevin
Michael Grace,
8.11
pm, 23 January 2008►
THOUGHT
FOR THE DAY
Last
week, this
story appeared buried inside the business
pages of the Washington Post. Why wasn't the story
on Page 1? The Post reports that the blue-blooded
five, Wall Street's five top investment banking houses,
awarded their management $39 billion in bonuses for 2007—a
period when those firms combined to earn investors about
$11 billion in profits. Merrill Lynch lost $8 billion in
2007, Morgan Stanley $3 billion and Bear Stearns $230
million, yet the executives of these companies were
showered with billions of dollars in bonuses. Otherwise,
they would refuse to do any work! Which, apparently, would
be in shareholders's interest. Merrill Lynch and Morgan
Stanley could have done better by their shareholders in
2007 by simply purchasing Treasury bills; a software
program designed to make simple conservative investment
decisions about market-following mutual funds would have
performed better in 2007 than the top management of most
investment banking houses. And the software program would
not have paid itself billions of dollars in bonuses for
screwing up!...
It's
one thing when profitable firms shower money on their CEOs
and other top brass; often the amounts are indecent, but
as long as shareholders come out ahead, the executives
have at least some justification for their windfalls. But
in the modern milieu of corporate kleptocracy, even when
the company does terribly and the CEO makes decisions that
blow up in the firm's face, the CEO awards himself
hundreds of millions of dollars, anyway. Why is this not
seen as white-collar crime?
Last
week's buried Post story included this priceless
quote: "'To many people, [the bonuses] will be
shocking and questionable,' said Jeanne Branthover,
managing director of Boyden Global Executive Search.
'People in New York in the world of investment banking
will understand it. It's critical that pay is still there
or you're going to lose really good people.'" Beyond
that executive headhunter firms such as Boyden
have a self-interest in running up CEO pay —this can
increase the search firms' headhunting commissions—consider
the reasoning: OMG, we can't lose the really good people
who cost our shareholders billions of dollars with
dim-witted decisions! The notion that top corporate
managers must be paid fantastic amounts because they
possess incredible, astonishing expertise often is used to
justify CEO pay, even when the managers who claim the
incredible, astonishing expertise make foolish decisions.
"We'll put billions of dollars of money entrusted to
our care into subprime gimmick mortgages backed by no
documentation of income; my incredible, astonishing
expertise tells me this is totally safe!"
If
corporate managers who screwed up received $5.85 an hour,
the federal minimum wage, for the year in which they
screwed up—that is, if their wallets were at risk when
they perform poorly—then they might fairly argue for
huge bonuses when they perform well. But there is no
evidence that the people who made the big investment calls
on Wall Street last year (except
at Goldman Sachs, which avoided the
subprime mess) are any better at what they do than people
chosen at random off a Brooklyn street. You bet
"people in New York in the world of investment
banking" will understand huge executive bonuses paid
in the same year as huge losses. What's happening is
basically a hustle, intended to enrich the executives
while separating the investors from their cash.
"People in New York in the world of investment
banking" understand that, all right!
—Gregg
Easterbrook
Adam Smith: The invisible
hand
is the pickpocket's best friend
Kevin
Michael Grace,
6.48
pm, 23 January 2008►
POUR LE CONNAISSEUR
I'd hoped that the boys from
FireJoeMorgan.com would take this on, but they
didn't. So here, for your delectation, is the
stupidest column ever written by
anyone on any subject at any time.
Patriots: What's perfect?
Well, I'll tell you what isn't:
anything less than winning every game Infinity-0
Kevin
Michael Grace,
6.39
pm, 23 January 2008►
PENSÉE
Stalin was wrong. Jews aren't
the real rootless cosmopolites; Canadians are.
Kevin
Michael Grace,
12.15
pm, 17 January 2008►
AND
HERE'S TO YOU, MRS WILKINSON, HEAVEN HOLDS A PLACE FOR
THOSE WHO BRAY, HEY, HEY, HEY
Stop
being a scold. Get over your pinched and neurotically
ideological notion of freedom, and start paying attention
to the further freedoms that matter much to people
actually trying to live their own singular lives.
No,
Dennis Rodman is not a worthy role model. Nor is a man,
such as Thomas Jefferson, who was so irresponsibly
prodigal that he allowed his self-imposed financial ruin
to override his acknowledged moral duty to release his
slaves from bondage. Yet despite a flaw far deeper and
more grievous than any Dennis Rodman could conceive in his
fevered dreams, we can see fit to give him his due.
Lord
knows it feels so good to be so right about so much. But
instead of rote, ham-handed, moralizing ideology why not
try a bit of actual moral discernment, instead? I think
you'll find it quite suitable for adults.
—Will
'As Mises And I Understand It' Wilkinson
Deplore this, you big
girl's blouse
Kevin
Michael Grace,
11.23
pm, 16 January 2008►
THE
PRICE OF RECTITUDE IS ETERNAL SANCTIMONY
One
of the embarrassments of the American libertarian movement
is its failure to sufficiently acknowledge how collective
bias against blacks, women, gays, immigrants etc. deprives
blacks, women, gays, immigrants, etc. of their freedom. To
my mind, serious forms of structural discrimination are
much worse for liberty than certain kinds of coercion.
Libertarians make themselves look ridiculous when they
claim that everyone is fully and equally free as long as
no one is coercing anyone. Now, this isn’t obvious. At
least it wasn’t to me. It took me a good while to come
around to this view—to see just how much structural bias
does deprive people of their freedom or of the value of
their freedom. But I am embarrassed that it took me as
long as it did.
—Will
'As Mises And I Understand It' Wilkinson
Wilkinson: Oh, the pain,
the pain!
Kevin
Michael Grace,
11.23
pm, 16 January 2008►
