Joseph Stiglitz on Capitalist Fools

Cropped picture of Joseph Stiglitz, U.S. econo...
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As long as we are putting corporate American under the microscope (with a view toward fixing it, not tearing it down), we may as well take a look at some of the other viruses plaguing the institution of the joint-stock company. One such institution, suggests Nobel Laureate Joseph E. Stiglitz, is the stock option:

Stock options have been defended as providing healthy incentives toward good management, but in fact they are “incentive pay” in name only. If a company does well, the C.E.O. gets great rewards in the form of stock options; if a company does poorly, the compensation is almost as substantial but is bestowed in other ways. This is bad enough. But a collateral problem with stock options is that they provide incentives for bad accounting: top management has every incentive to provide distorted information in order to pump up share prices.

This is not the sort of thing, I would imagine, that is compelling the Occupy Wall Streeters to set up their tents. But as we grope toward a series of polices that will kill the maladies afflicting our institutions, this is one that could use some attention.

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David Brooks Sees Our Problem

The Lost Decade? – NYTimes.com.

I don’t always agree with David Brooks, and in particular he and I part ways when it comes to his somewhat superficial understanding of China. I agree with him more often than not, however, and I can forgive him his ignorance of China if he will forgive me my similarly thin understanding of New York.

In what was possibly one of his best editorials yet, Brooks was motivated by the prospect of a “disastrous double-dip recession” to call out both Republicans and Democrats for their singular failures and, to borrow a phrase from Star Trek II: The Wrath of Khan, their “two-dimensional thinking.”

The prognosis for the next few years is bad with a chance of worse. And the economic conditions are not even the scary part. The scary part is the political class’s inability to think about the economy in a realistic way.

He really gets to the heart of the matter a few grafs further down when he notes:

Yet the ideologues who dominate the political conversation are unable to think in holistic, emergent ways. They pick out the one factor that best conforms to their preformed prejudices and, like blind men grabbing a piece of the elephant, they persuade themselves they understand the whole thing.

It is a balanced, intelligent essay, and one that should be read, digested, and internalized by everyone who cares about the future of the United States.

Bravo, David.

The Problem with “Occupy Wall Street”

Wall Street Welfare Checks.
Image by eyewash via Flickr

Occupy Wall Street: A Story without Heroes – Anthony Gregory – Mises Daily.

In an Anthony Gregory of the Independent Institute captures the real problem with Occupy Wall Street in spare paragraph stripped of partisanship or ideology:

But overall the protesters’ message is too vague and heterogeneous — at best — to elicit much enthusiasm. As in the tea parties to which it has been compared, many in this movement are condemning a nebulous conception of the status quo without much of an inspiring alternative vision.

Even Karl Marx understood that you cannot have a better future unless you clearly and truthfully describe the current system and its faults, provide an alternative, and then stand back and let the two sides have at it. It was a problem that afflicted the radical end of the student movement in the 1960s, and it afflicts the radical left and reactionary right today.

And, sad to say, most of the rhetoric that suffuses our current electoral process suffers the same malady.

The Occupy Wall Street protesters make some good points. The collusion between rampant banks and those charged with regulating their activities have, in part, led us to the current financial crisis. But the answer is not to pull the plug on Wall Street. The answer begins with an intelligent debate about the proper role of the financial sector in our economy, and the best way to ensure it is no longer given the opportunity to endanger the nation and the world at paltry personal risk to those set to benefit the most.

Adultery and Double Standards « Commentary Magazine

One of the most difficult magazines for me to read every month is Commentary. While I, like most of its editors, am both Jewish and conservative, the magazine’s decidedly neocon bent strikes a tone of disharmony with the times.

But a recent editorial by Peter Wehner proved to me once again the worth of my subscriptions. Contrasting the conservative opprobrium heaped on Bill Clinton for his infidelities with the defense waged by the same conservatives of Newt Gingrich, Wehner barely hid his disgust:

The examples of sanctimonious hypocrisy are almost endless. And truth be told, we all engage in it to one degree or another. None of us come at these things from a position of perfect objectivity. Our personal histories, dispositions, and preferences in all kinds of areas—from politics to faith to our favorite foods and athletic teams—cause us to view the same set of facts through different lenses. The question isn’t whether hypocrisy occurs; the question, I think, is how much we strive to minimize it. Do we even try to employ a single standard, or are facts and events simply tools to be used in a larger ideological battle?

via Adultery and Double Standards « Commentary Magazine.

Moral and ethical standards are not relative, and where the American political system is failing is where partisans of one side or the other apply their standards only to the enemy.

The sweetest fruits of party loyalty are sour poison if they are attained via relativization of our values. It is time we all articulated those moral and ethical standards that ring to us most true, then stood by them. To do less is naked hypocrisy, political prostitution of the basest kind.

Maureen Dowd Gets It

The Republicans are now the “How great is it to be stupid?” party. In perpetrating the idea that there’s no intellectual requirement for the office of the presidency, the right wing of the party offers a Farrelly Brothers “Dumb and Dumber” primary in which evolution is avant-garde.

Having grown up with a crush on William F. Buckley Jr. for his sesquipedalian facility, it’s hard for me to watch the right wing of the G.O.P. revel in anti-intellectualism and anti-science cant.

via Egghead and Blockheads – NYTimes.com.

Perhaps better than I have or could, Maureen Dowd has captured the very raison d’ etre of Bull Moose conservatism: a determination to bestow upon American conservatism both a cerebrum and the moral courage to use it.

An American Ambassador

The new Ambassador of the United States in China, Gary Locke, has by dint of personal example begun to force ordinary Chinese to question the elitist manner in which many of the nation’s public servants conduct themselves. Locke has acted with humility, spoken with warmth and generosity, and has been unflappable in confrontational situations.

His behavior reminds me of a quote from Rabbi Menachem M. Schneerson, a late 20th-Century American Jewish leader, who wrote as America became the world’s sole superpower:

The world waits to see if our message is to pursue the easy gratification promoted by our pop culture, or to abide by the basic principles that have built our nation’s character. Simply put, is all that we are selling Coca-Cola and Rock music. America was founded on principles of justice, freedom, tolerance, generosity and hard work. [From In G-d We Trust: A Handbook of Values for Americans, 1996]

Locke’s predecessor as ambassador, Jon Huntsman, seemed to be the first US ambassador in a long time to realize that a high-ranking emissary is not just the de jure representative of his home government, but a de facto representative of his people and his culture, and made a conscious effort to be that American everyman. Locke has, intentionally or otherwise, taken that approach far enough to capture the imagination of ordinary Chinese.

I hope this is the beginning of a trend, and I hope it extends beyond Beijing. We need ambassadors who are not only politically acceptable and professionally capable, but who also represent those things we cherish the most in our country.

In the Name of the Gipper

Bronze statue of former President Ronald Reaga...
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While our focus here at the Moose is on ideas rather than campaigns, the buzz out of the Presidential Debates in our U.S. backyard of Simi Valley makes us wonder.

If Ronald Reagan were alive and engaged today, what would he think about the current crop of candidates invoking his name and legacy as a justification for his own?

Though it may discomfit many conservatives to say so, Ronald Reagan, his principles, and his policies were as much a product of immediate challenges as an expression of timeless principles. Before we go invoking his name to justify all manner of political choices, we have to understand where the line between the two lies.