A Defense of the Banker

[peter grimes]

What I don't understand about these incredibly rich people is that surely there must come a time when they think to themsleves "actually I have enough money now." Personally I see money as a means to end so if I ever aquired enough that meant I could live the rest of my life pursuing topics of interest whilst living in relative comfort I would. But these people whos life is devoted to accumulating pennies just seems rather pointless.

What I'm saying is that beyond a certain point money stops being tangible and becomes abstract. If someone gave me £1,000 I could think of lots of things to do with it. Whereas if that amount were to be replaced with £1,000,000 then suddenly it becomes an unreal amount and I have no idea what to do with it. I guess people who naturally deal in such large amounts aren't handicapped by such things.

I used to think the same way, but over time my views have changed.

I remember when I first got out of college a $10/hour job was my goal. It took me 4 years to get, and I thought that I'd finally be able to get my financial house in order (this was in the mid 1990's, when $10 was worth a bit more than it is now). Yes, I was somewhat naive, but I also didn't have many expenses. I was single, had student loan and credit card debt, but that was it.

But over time, as I adjusted to this new normal, my expectations for 'just getting by' included more and more. A playstation. Internet. apartment in a nicer neighborhood. Fast forward through my career and I now can't imagine how I can go back to earning even 75% of what I'm making now - even though that's where I was just 7 years ago.

I can easily imagine that the people who want to make 100,000,000 more than they already have are subconsciously motivated in the same way I am.

In fact, I'd be surprised if there weren't some sort of evolutionarily advantageous algorithm kicking around in our behavior circuits that predispose us to consume & horde when we can, for the future is anything but certain.

 

[Ziggy Stardust]

The defence of the banker is that they're human beings thrown in an environment that stimulates being a bastard and ruthlessly punishes weaknesses like being a considerate moral person. There's immense pressure that few would be able to withstand, and those that do get chewed up and spit out.

Bankers are merely the personification of the dark side of capitalism.

 

[Ziggy Stardust]

http://www.thedailyshow.com/watch/thu-june-7-2012/exclusive---edward-conard-extended-interview-pt--1
http://www.thedailyshow.com/watch/thu-june-7-2012/exclusive---edward-conard-extended-interview-pt--2
http://www.thedailyshow.com/watch/thu-june-7-2012/exclusive---edward-conard-extended-interview-pt--3

This guy repeatedly states what makes America so great for innovation and then draws a completely trumped up conclusion.

Silicon Valley just being able to be there is what got America the lead. He talks about risk taking as if the guys who already made it take the risks. It's the starters on Silicon Valley getting the opportunity to chase after their ideas and being better taken care of than those in the Netherlands (and I suspect Europe, but I only know the Netherlands's situation) who are struggling to even get started and not only get little help, but are punished severely when their high risk ideas don't pay off.

Those are the risk takers, not Steve Jobs. He was an ex-risk taker. He was someone who's ideas already paid off. The pay-off differential in tax percentage is not what's stopping them. The lack of opportunities to realise their ideas does. I personally know a couple of guys who's ideas for mobile phone apps lost them their houses because they couldn't pay pack the loan, specifically meant to incentivise innovation ironically enough, the government gave them which was limited to 3 months by which time this brand new company was expected to make enough profit to start paying them back. And our new govvie geniuses even more limit their potential is the name of balancing the budget.

That's why we are behind. That's what makes America such a front-runner.

Not the 15%

 

[ParkCungHee]

I also notice all this has very little to do with banking. Banking is not a risk taking enterprise (when it's well run). Banks naturally are adverse to risk, and America has made them incredibly good at avoiding it. Given this, it seems that if bankers need an apologia, it should also cover the topic of "Why they are not usurers." Which, given that he has heroicized the risk taking entrepreneur, should be a serious accusation.

If his idea of a federal organization to bail out banks is actually implemented, I can't see how American bankers wouldn't qualify as userers.

 

[Ziggy Stardust]

Indeed. He's very good at not answering questions, ignoring them all-together in fact.

edit: wahey, in 3 Jon Stewart has read my post in some weird matrix kind of timetravel way and now is now making that argument to dumbass.

 

[Cutlass]

I saw part of the Stawart show the other night. The thing is, the innovations and risks the guys is talking about have nothing to do with the financial looseness that he is advocating. They are unrelated. And on top of that, he has no case that the innovations will not take place with safer financial regulations, or even that more won't happen.

What he and others like him are arguing for is not actually the conditions for a highly innovative economy benefiting risk takers. What they are really advocating is rent seeking so that people can accrue ever greater wealth concentrations without taking on risk at all. They want the government to work with them to redistribute wealth rather than having to work for it. And in the long run, that will end innovation, not create it.

 

[Ziggy Stardust]

Just to set the record, I really honestly am completely lost with regard to everything that was said which was not about innovation.

There he might be right, he might be wrong. I couldn't follow.

 

[Old Hippy]

edit: wahey, in 3 Jon Stewart has read my post in some weird matrix kind of timetravel way and now is now making that argument to dumbass.

this probably also explains why, the video is unavailable from my location...

 

[Defiant47]

It's funny how nobody who has wealth truly understands what it means to generate and accumulate "wealth". They all envision somebody sitting on piles of money, with nothing to do with it, bored out of their minds.

In reality, people can be wealthy, but typically do not actually have access to the massive sums that they are claimed to be "worth". A successful corporation could technically be said to have a great deal of wealth, but most of that is already invested in profitable assets.

Excess returns are typically given back to the people who invested money in the first place, or reinvested into further profitable projects.

 

[bender19]

Economically its a perverse theory. Essentially he wants the government to subsidise risk for the wealthy by bailing out banks. When poor investors lose money its not going to improve the economy by replacing the capital they lost. Essentially what he is arguing is the funds from successful investments should be used to subsidise the unsuccessful investments. So we'll get an overinvestment in bad ideas and an underinvestment in good ideas.