Irony: Down With Evil Corporations
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Friday, October 07, 2011
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- Today's Employment Report: Since Jan. 2010, -500k ...
- Steve Jobs vs. Ted Kennedy
- Intermodal Rail Traffic Highest in Four Years
- Historic Low: 30-Yr. Mortgage Rates Drop Below 4%
- 1984 Apple's Macintosh Commercial
- Even with Fees, The Miracle of Flight Still a Bargain
- George Will on Elizabeth Warren's Collectivism
- Steve Jobs: American Manufacturing Icon at One of ...
- Markets in Everything: Variable Parking Rates
- Steve Jobs' 2005 Stanford Commencement Address
44 Comments:
If government was a restaurant, someone like Methinks would order the breakfast. She'd receive half cooked scrambled eggs, bacon fat, rubbery hash browns, burnt toast, and cold coffee. If she complained, she'd get a grapefruit squeezed in her face. The check would be $25 :)
That is hilarious.
The picture also describes why communes, which is what the protesters imply our society should become, always fail. IOW, the folks at Corning are fractured from their self-organizing specialty; they are too busy talking to Elizabeth Warren.
I just finished writing that ! Or something fairly close anyway.
The mostly young crowd packing into NYC to protest against capitalism is all over the news now. There is a certain irony to their declarations against “Big Corporations” henceforth referred to as (BC)
They arrived in their cars, (BC) in airplane(BC)s, and on busses(BC) They alert each other to gatherings over Twitter(BC) and the Internet(BC) using their IPhones(BC) and Ipads (BC)They stay tuned into the latest music(BC) with earphones(BC) plugged into their Ipods. (BC) They wear Nikes, (BC) Reeboks(BC) and Earth shoes(BC), Levis, (BC) Gap (BC)and Old Navy(BC) clothes and smoke cigarettes made by “Big tobacco”. (BC)
They hold signs printed on paper(BC) with markers (BC), beat drums(BC) and use megaphones(BC) to shout out their anti-business slogans. They use the toilets(BC) at McDonalds(BC) and eat food (BC) at any handy eatery(BC). When they use the bathroom they wipe with toilet paper(BC) while sitting on a toilet (BC) and washing their hands in a sink (BC) using soap. (BC)
In short, every single need, want or desire of their lives has been supplied every step of the way by Big Corporations. Were it not for Big corporations they would have had to have heard about the protest from smoke signals from fires lit by flints and burning wood cut with stone axes. They would be dressed in animal skins and would have walked barefooted on dirt paths to get to NYC. They would be doing their business behind trees and wiping with their bare hands. At night they‘d be snuggled up under a homespun blanket made from the fleece of their own sheep.
I’m going to go out on a limb and say that without Big Corporations no one would be there at all. Everyone would be too busy just trying to stay warm and fed.
Like Glenn Greenwald said, the argument here is that if you don't put your money under your mattress and communicate by carrier pigeon you should have no say in potential abuses by corporations.
We live in a corporate world. We can't help that. Does this mean we shouldn't notice it when Wall St plunders? Should we fail to notice when Shell Oil dumps oil all over Nigerians because we drive cars? Should we fail to notice that virtually all productivity gains over the last 30 years have funneled their way into the pockets of the super rich and almost none of the gains have gone to the rest? Should we fail to notice that politicians are almost completely unresponsive to the wants of the public at large and are entirely responsive to the needs of the largest corporate backers? Should we fail to notice that this is not democracy?
That's like saying you shouldn't accept a Social Security check since you oppose the program in principle. It's nonsense.
Jon,
"..the argument here is that if you don't put your money under your mattress and communicate by carrier pigeon you should have no say in potential abuses by corporations."
There is no coherent argument amongst this human debris, other than "give me someone else's stuff, or else!"
Wall Street, not Silicon Valley, is the archenemy of the Obamanites, although Wall Street helped build the most efficient economy the world has ever seen, created and captured trillions of dollars of real wealth in the global economy, distributed that wealth to America's masses, and diversified the risk globally.
Wall St absorbed 40% of ALL CORPORATE PROFITS in this country and there is little evidence they do anything that improves things. Prior to financialization (that is prior to dismantling the Bretton Woods regulatory apparatus) economic growth was more rapid and more egalitarian. Not just in the US. The world over. Dismantling the regulatory apparatus has slowed economic growth, funneled the smaller growth into the pockets of Wall St financiers, and generated a bunch of young people with crushing student loan debt (which is not dischargeable) and no prospects besides burger flipping, which is not enough to repay the debt.
And they have plenty of arguments. You're just not listening to them.
"Should we fail to notice when Shell Oil dumps oil all over Nigerians because we drive cars?"...
What the hell do you care about a bunch of Nigerians?
Or are you showing us in your narcissistic and bigoted way that the Nigerians can't make their own decisions so you should stick your oar in it for them?
"Should we fail to notice that virtually all productivity gains over the last 30 years have funneled their way into the pockets of the super rich and almost none of the gains have gone to the rest?"...
So now we have the nub of it, eh?
You're jealous that others that are smarter than you took the chance, gambled with their money and made it big but there you sit with the same two dimes in your pocket wanting some of their money instead...
"Should we fail to notice that politicians are almost completely unresponsive to the wants of the public at large and are entirely responsive to the needs of the largest corporate backers?"...
Apparently little jon didn't pay attention to the 2010 voting booth results...
Politicos are unresponsive in inverse proportion to the laziness of their electorate....
"That's like saying you shouldn't accept a Social Security check since you oppose the program in principle"...
That depends little jon on whether accepting the ill gotten gains of that massive federal ponzi scheme are made before or after money has been extorted from your paycheck...
Jon, in the 2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).
The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up.
Wall Street vastly improved the lives of America's masses.
"And they have plenty of arguments. You're just not listening to them."
I've heard some of those filthy creatures complain that they are "college grads who can't find jobs and now have a mountain of debt, man!" And then you ask the creatures "what was your major?"...to which they respond "modern art history, man!".
To which I say...serves you right. Why is it my problem to pay for your tuition? I went to engineering and MBA. I got 5 times the amount of debt you have. I ain't complaining. I'm saying I paid too little, actually.
They are looser. Nothing else. Society should be pointing at these freaks in the park there, and saying "kids, don't become like this!"
Some other mutant was even more amusing. He/she was complaining that he/she was going through a sex-change and couldn't afford the hormone treatment. So...I...had to pay for it. Yeah. Some arguments they have.
Most ridiculous thing ever said on this blog.
In the world of right wingers facts are ridiculous.
You're jealous that others that are smarter than you took the chance, gambled with their money and made it big but there you sit with the same two dimes in your pocket wanting some of their money instead...
That's not true. I'm doing well financially. Not amazing, but decent.
Wall Street vastly improved the lives of America's masses.
Isolate 20 consecutive quarters and ignore the catastrophic crash and you can find periods where financialization worked. In the sense that while a bubble was inflated things looked good. But then the bubble burst. And disaster followed. Look at the overall picture over a longer period and it's obvious that the 50's and 60's were much better. The 70's, as bad as they were, look a lot better than the 2000's overall.
Some arguments they have.
The fact that you focus on the freaks and ignore substantive sources, such as Nobel Prize winning economist Joseph Stiglitz or economist John Quiggon, or another Nobel Prize winner (Paul Krugman) goes to show that you have made a choice not to hear the arguments from the other side. Don't pretend they don't have arguments. You just don't want to hear them.
Jon, the financial crisis was caused by a giant government unfunded social program that the government assumed it didn't have to fund.
It created so much "moral hazard" that the entire U.S. financial system was on the verge of collapse.
Bush Administration Tried to Reform Freddie and Fannie Five Years Ago
CBS News
February 19, 2009
Karl Rove, “We were briefed as far back as 2001 about the problems with Fannie and Freddie; in fact, we moved aggressively in 2004 to regulate Fannie and Freddie, actually got a bill through the Senate Banking and Finance Committee only to have it filibustered by [Sen.] Chris Dodd.”
Rove said Fannie Mae and Freddie Mac “accelerated their imprudent behavior after we attempted to regulate them. They bought almost as much mortgage debt from 2005 through 2008” as they bought in their first 30 years of their existence.
“In fact, in 2003, when we sent our first members of the Cabinet up to talk about this on Capitol Hill, Barney Frank had a hearing in which they basically beat up everybody we sent up there in pretty vociferous language.
Current account deficits subtract from GDP, i.e. Y = C + I + G + NX.
Negative net exports have a negative effect on GDP.
The U.S. had up to $800 billion a year trade deficits in the 2000s (up to 6% of GDP).
It's remarkable U.S. real GDP expanded in the 2000s, given those huge trade deficits.
The U.S. was more than the engine of global growth.
It was a "Black Hole" in the global economy, attracting imports and capital, and even attracting the owners of that capital themselves.
So, U.S. living standards improved at a steeper rate in the 2000s (in the 1970s, the U.S. was basically a closed economy).
Are you saying that it isn't possible to have these products without crony capitalism, massive wealth inequality, and bubble/bust cycles leading to high unemployment? I think these are the features of corporations that are being protested. None of them are advocating abolishing corporations. In effect, this whole post amounts to little more than a strawman.
Successful does not mean they are not evil, at least in some respects.
Lets face it, being "good" is not in a corporations job description: their job is to make money.
All that is necessary for evil to triumph is for good corporations to do nothing.
"In the world of right wingers facts are ridiculous"...
So to prove your point jon you reference a left-wing propaganda rag for your supposed 'facts'?!?!
Well why not?
"Look at the overall picture over a longer period and it's obvious that the 50's and 60's were much better."...
Guess what the fifties and sixties weren't doing yet jon?
The full measure of pandering to parasites had quite got started yet...
What the Wall Street Protesters Want: An Economic Commentary on the “Contract for the American Dream.”
a one-page, ten-point program that claims to be the result of a grass roots, bottom-up drafting process...
http://www.economonitor.com/dolanecon/2011/10/06/what-the-wall-street-protesters-want-an-economic-commentary-on-the-contract-for-the-american-dream/
Don't forget the Working Families Party (a corporation), the SEIU (a corporation), the AFL-CIO (a corporation), the Democratic Socialists of America (a corporation) and the Democratic Party (a corporation). And most any university and non-profit in the United States (a corporation).
Oh, and isn't the United States Government a municipal or other form of a corporation? Would that make Obama one of the corporate elite insiders?
Woah. You know, Radiohead, Pink Floyd, The Cardigans and Coldplay may be corporations too. Sure would be interesting to know.
As for the more obvious, one has to be reeeeely ignorant to not see all those tricky corporations getting the 99-percenters to do all that hard work for free. The Mexicans are smart enough to get paid. Let’s hear it for the irony of social justice.
How difficult it must be to go thorough life as a malcontent paranoid and miss the irony of your prepackaged, provided identity being just a product of just another predator corporation.
Rat bastards they are. All of them. No -- not the corporations -- the ignoratti who work for them -- for free.
Simply simply, but brilliant!
Come on guys, clam down, and let these people speak for themselves.
College should be "free", you should be able to retire to Cancun when you're 65 and broccoli should be cheaper. Did I miss anything?
Window at the CBOE
The Ongoing Occupation of America
Somebody buy this chick a Mercedes.
Yep, just your average hardworkin', middle class Americunnss
But, hey, what do they want? Really?: Proposed List Of Demands For Occupy Wall St Movement!
Rick: "When they use the bathroom they wipe with toilet paper(BC) while sitting on a toilet (BC) and washing their hands in a sink (BC) using soap. (BC) "
Wow! People in New York are really efficient. They don't like to waste time, do they.
AIG: "Most ridiculous thing ever said on this blog. "
Now that's a bold statement, if I ever heard one. The competition for that honor is fierce.
Peak Trader: Jon, the financial crisis was caused by a giant government unfunded social program that the government assumed it didn't have to fund.
Well, no. The problem, like all such bubbles, was demand side. The rise of the market in toxic securities originated on Wall Street, and resulted in a shadow market that was global in scope.
Peak Trader: Bush Administration Tried to Reform Freddie and Fannie Five Years Ago
Freddie and Fannie weren't the cause of the problem. They were the "greater fools."
Stephen: In effect, this whole post amounts to little more than a strawman.
Yes. A case of black-and-white thinking: You're either with the corporations or you're against them.
This comment has been removed by the author.
Not to totally sidetrack the discussion, but just some food for thought in response to the claim from Juandos, who thinks Time Magazine is liberal. The mainstream media is not liberal.
Here's a few stories that maybe you've heard of maybe you haven't. But if the media was liberal you might think they'd be discussed. Who has heard of these stories?
1-Who knows that the Taliban repeatedly offered to hand Osama bin Laden over both prior to and after the US invasion of Afghanistan?
2-Who knows that in order to persuade the US Senate to support Gulf War I a girl was brought in who testified that Iraqi soldiers were killing babies in hospitals. This testimony was decisive for a few Senators and made the difference in the vote. It turned out the story was fabricated. She was the daughter of the Kuwait ambassador and had been coached by a PR firm. Foreign press covered the story, but there's was a total blackout in the US.
3-How many know that Saddam Hussein repeatedly offered to withdraw from Kuwait peacefully, but those offers were ignored?
4-How many know that Iran offered full cooperation on nuclear programs, the willingness to recognize Israel, and a willingness to stop funding Palestinian terrorist groups in 2003 and the US response was to censure the Swiss diplomat that brought the offer?
5-You've heard of Watergate. Have you heard of COINTELPRO? Watergate was a break in of a hotel for unknown reasons that harmed nobody and caused no damage. COINTELPRO was exposed about the same time. A multiple decades long program directed by various Presidents that involved infiltrating political organizations, planting evidence on innocent people and imprisoning them, subverting grass roots democratic activity, and in fact included murder. The FBI had a charismatic leader of the Blank Panther party murdered in his bed while he slept. If the media is so liberal why do they ignore the far greater crimes of COINTELPRO and focus on the virtually irrelevant crime that was Watergate?
6-You've heard of Pol Pot. Who has heard of East Timor?
7-Do you know when the war in Vietnam started? Who was President when it started? Do you know who was attacked? Was it North or South Vietnam? There is so much pro war propaganda in the media that people don't even know when the war began or who we were fighting?
The media is not liberal. But they do tend to favor Democrats. That's a different claim. Not only are they not liberal, but we shouldn't expect them to be liberal based solely on who they are and who their customers are. Remember, like Mark says, if you aren't paying for it you aren't the customer. Who are the customers? And what kind of a view of the world would we expect they would want to see? That's what you see in the media.
Zachriel, you're scratching the surface.
The government not only approved, but encouraged risky behavior by financial firms.
The government believed it could help lower income Americans without paying for it.
Those politicians must have thought they were pretty smart, until reality crashed upon them.
Of course, they've been successful shifting blame on someone else.
PeakTrader: The government not only approved, but encouraged risky behavior by financial firms.
If there was no demand for the securities, the mortgages wouldn't have been made. There was a rush to originate the loans, package them and sell them off as quickly as possible. There was a shadow market outside of regulatory oversight, and though the U.S. was the epicenter, it was global in scope.
“The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of the crisis) would have been far smaller and defaults accordingly far lower.” — Alan Greenspan
Zachriel, so, Wall Street was successful selling mortgage backed securities, "recycling dollars," to make more loans, and make more money, while buyers made lots of money.
What's your point?
The government created and promoted the economic conditions for that to happen.
"Freddie and Fannie weren't the cause of the problem. They were the "greater fools.""...
LMAO!
Good one zach!
ROFLMAO!
PeakTrader: The government created and promoted the economic conditions for that to happen.
Well, the government certainly had a role in allowing a bubble in the shadow banking system, but the toxic assets at the root of the problem were an invention of Wall Street.
Zachriel, the reactions and adaptations to government policies, which spun out of control, was not the root cause of the financial crisis.
What Caused the Financial Crisis
November 16, 2010
"Starting in the late 1990s, the government, as a social policy to boost homeownership, required Fannie Mae and Freddie Mac to acquire increasing numbers of "affordable" housing loans. (An "affordable loan" is made to people who normally would not qualify.)
By 2007, 55 percent of all loans made by Fannie and Freddie had to be "affordable." By June 2008, there were 27 million subprime housing loans outstanding (19.2 million of them directly owed by government or government-sponsored agencies), with an unpaid principal amount of $4.6 trillion."
"What we know is that almost 50 percent of all mortgages outstanding in the United States in 2008 were subprime or otherwise deficient and high-risk loans.
The fact that two-thirds of these mortgages were on the balance sheets of government agencies, or firms required to buy them by government regulations, is irrefutable evidence that the government's housing policies were responsible for most of the weak mortgages that became delinquent and defaulted in unprecedented numbers when the housing bubble collapsed.
The tragedy is that the financial crisis continues because Congress misdiagnosed the problem and came up with a 2,000-page "solution" that will only make matters worse."
PeakTrader: The fact that two-thirds of these mortgages were on the balance sheets of government agencies, or firms required to buy them by government regulations, is irrefutable evidence that the government's housing policies were responsible for most of the weak mortgages that became delinquent and defaulted in unprecedented numbers when the housing bubble collapsed.
Quoting a blog that quotes an article that cites Peter J. Wallison doesn't constitute "irrefutable evidence." The article itself points out there are other proposed explanations.
The toxic securities were designed and marketed by Wall Street. Freddie and Fannie were late players to the game. They were the "greater fools." Just because you got holding the bag doesn't mean you engineered the scam (though it doesn't mean you're innocent either).
The majority of subprime loans were made by private lenders, and the vast majority of firms making subprime loans were not covered by CRA. The problem was a weakening in underwriting standards, in response to the huge demand for PMBS. The runup was a classic bubble, with people buying only in order to sell to the next sucker in line, with the public left holding the bag.
The protesters may be uneducated in terms of economics, misguided, and hopeless leftists, but they are upset about certain corporate behaviors.
If enough of them are upset, and vocal about it, corporate behaviors will change, just as the Tea Party has changed Republican behavior.
I still believe that the securitizaion that resulted in the mortgage collapse wich so damaged the economy would not have been possible without basically fraudulent risk ratings.
Without those, the securities ould not have been sold, mortgage originators could not have originated bad mortgages, etc. etc.
There is plenty of blame to go around, and hanging it all on "government interference" in a purely benevolent and free marketplace is sheer fantasy.
Mortgage crash aside, I am not so sure that there are not structural economic problems that would have caused the collapse. How many iPhones do we need, anyway?
I know it will be a very long time before some corporation sells me another television, whether it be an eveil corporation or a benevolent one.
my guess is that most people protesting are angry or worried about the influence that money (and the people that control the money) have on our political system and are not against many of the products and services these institutions provide. they are against corruption and the excessive influence of big business and the top 1 percent of Americans on U.S. laws and policies. I am not personally intrinsically against large amounts of inequality in wealth but i can imagine if it had more negative outcomes then positive outcomes (something the protesters believe and I do not have enough data on) it would be rational to use these products and still try and stop the negative aspects of institutions power. I do not personally know all of the positives and negatives of the way things are set up but it is not crazy to think that the incentives of the corporations do not align with the good of society in all or most cases. the incentives are set up to maximize profit and that can be good or bad for different individuals and aspects of society and the impact will change over time.
Hydra, financial firms wouldn't make so many bad loans without "government interference."
And investors bought those securities, that later became "toxic," because they made them a lot of money, not because of excuses like "fraudulent risk ratings.
The government created the bubble, not only because of its policies on the way up, but also because of its policies on the way down.
"...fraudulent risk ratings."
What, exactly, is "fraudulent risk taking?
"How many iPhones do we need, anyway? "
Gee, I guess as many as "we" wish to buy. Is there some other number you know of?
Your statist leanings are showing.
Isn't the whole point of the protest that wall street, and their captured political masters, are creating an environment where benefits are private, but risks are social? Big corporations benefit from this environment, and the results is that even the protesters are wearing their products.
Jon said... at 10/07/2011 3:29 PM
“That's like saying you shouldn't accept a Social Security check since you oppose the program in principle. It's nonsense.”
Wait a minute, many Amish did in fact take the above position mentioned above and got thrown in jail.
Post a Comment
<< Home