Is Wall Street Killing America?

Wall Street’s relentless drive for short-term profit is ruining corporate America and the consumer experience, according to John Bogle, founder of the Vanguard Group. The overseer of one of the world’s largest mutual funds appeared on Bill Moyers Journal to discuss a New York Times investigation that revealed substandard care at nursing homes owned by investment firms. According to Bogle, the trend is not contained, and has dire long-term consequences:

The financial sector of our economy is the largest profit-making sector in America. Our financial services companies make more money than our energy companies — no mean profitable business in this day and age. Plus, our healthcare companies. They make almost twice as much as our technology companies, twice as much as our manufacturing companies. We’ve become a financial economy which has overwhelmed the productive economy to the detriment of investors and the detriment ultimately of our society.

From the transcript:

JOHN BOGLE: Well, let me say it very simply. The rewards of the growth in our economy comes from corporate, largely – from corporations who are a very important measure, from corporations that are providing goods and services at a fair price innovating and bringing in new technology — providing a higher quality of life for our society and they make money doing it. I mean, and the returns in business in the long run are 100 percent the dividends a corporation pays and the rate at which its earnings grow.

That still exists. But, it’s been overwhelmed by a financial economy. The financial economy, which is the way you package all these ways of financing corporations, more and more complex, more and more expensive. The financial sector of our economy is the largest profit-making sector in America. Our financial services companies make more money than our energy companies — no mean profitable business in this day and age. Plus, our healthcare companies. They make almost twice as much as our technology companies, twice as much as our manufacturing companies. We’ve become a financial economy which has overwhelmed the productive economy to the detriment of investors and the detriment ultimately of our society.

BILL MOYERS: By the financial sector, you mean?

JOHN BOGLE:Banks, money managers, insurance companies, certainly annuity providers. They’re all subtracting value from the economy. They have to subtract. To be clear on this now — I don’t want to overstate it. To be clear on this, they have to subtract some value. But, the question is–

BILL MOYERS: What do you mean they subtract some value?

JOHN BOGLE:In other words, — you’ve go to pay somebody something to provide a service. It’s just gotten totally out of hand. My estimate is that the financial sector takes $560 billion a year out of society. Five hundred and sixty billion.

BILL MOYERS: Where does it go?

JOHN BOGLE:It goes into the pockets of hedge fund managers, mutual fund managers, bankers, insurance companies. Let me give you this just one little example. If you didn’t make a $129 million last year — I’m presuming that you didn’t. You don’t rank among the highest paid 25 hedge fund managers. A $129 million doesn’t get you into the upper echelon.

Half a trillion dollars is no chump change, representing almost a quarter of the government’s entire annual operating budget.

BILL MOYERS: This seems to me to be your great concern, that this self correcting faculty that is built into both democracy and capitalism is in jeopardy?

JOHN BOGLE:Actually, I think it’s fair to say it’s in jeopardy. But there’s one sense that it’s not in jeopardy. And that is, ultimately, the system will correct. The bigger the boom, I fear, the bigger the bust. In other words, you pay the price. It’s not a self sustaining system at this kind of a level.

BILL MOYERS: Do we need new rules?

JOHN BOGLE: One thing is, I believe, to have a federal standard of fiduciary duty for money managers. They’ve come from eight percent ownership of American business to 74 percent ownership of American business. It’s staggering, over unbelievable change. Without any rules as to how they’re supposed to behave. We have state laws of proven investing and fiduciary duty and things of that nature. But they don’t seem to be working. And our founding fathers actually thought about having a federal statute– a federal corporate chartering statute. I think we probably need one because if some of the states step up and say improve their governance provisions, corporations will move to another state. So the state system I don’t think can prevail.

So a federal standard of fiduciary duty which demands that our pension trustees and our mutual fund directors make sure that those pension funds and mutual funds are operated in the prime interest of those who have entrusted their money to them. And that includes responsibility for corporate governance. And it will ultimately turn to be focused more on long term investing.

When I came into this business in the 1950’s, it was a business focused on the wisdom of long term investing. We changed in that period to a business that is focused on the folly of short term speculation. And think about this for a minute. If you’re a true investor holding a company for the long term, you’re well aware that the value in that company is company’s earnings compounded over time, developing new products and services, developing efficiencies– trying to size up the proper corporate strategy, you know, making the company more valuable. But, in the folly of short term speculation, you’re just thinking will that stock be worth more or less six months from now or a year from now?

Give you a very specific example. In the first 15 years I was in this business, the average mutual fund held the average stock for seven years. Call that long term investing. Now, the average mutual fund holds the average stock for one year. That’s short term speculation. So, if you’re a speculator, you don’t care much about ownership interest. You don’t care so much about corporate governance. Why vote a proxy, for example, if you’ll not even be holding a stock in three months?

The other part of it is,and this is really makes it a very difficult problem to solve. And that is a little about of — I guess it’s Pogo — we have met the enemy and they are us. These mutual fund companies– these management companies are now owned largely by corporate America. Or international corporations — Deutsche Bank — AXA, big international companies who have bought their way into the US financial system, which is– don’t mean to demean that. But, they own these public corporations– giant public corporations like insurance companies, big banks– foreign insurance companies and banks own 41 of the 50 largest mutual fund managers.

Now, what is the job of a corporation when they buy into a mutual fund management company? It’s to earn a return on the capital they invest in that company. It’s not to earn a return on the capital of the investors who invested with that mutual fund. Now, in fairness, they want to earn as much money as they can for the fund shareholders. But, not at their own expense.

What we’ve done is have you know, what I call in the book, a pathological mutation of capitalism from that old traditional owners’ capitalism to a new form of capitalism, which is manager’s capitalism. The evidence is quite compelling that today corporations are run in a very important way to maximize the returns of its managers at the expense of its stockholders.

BILL MOYERS: Its CEOs.

JOHN BOGLE:Its CEOs, well, the upper level of five or six top officers. And they get enormous amounts of pay for actually doing very little. I’m a businessman. Listen, we all– we chief executives get an awful lot of credit that we don’t deserve. Real work in companies is done by the people who are getting themselves together and doing the hard work of making companies grow–

BILL MOYERS: And, yet, these–

JOHN BOGLE: every day.

BILL MOYERS: These are the people who most often get laid off, right?

JOHN BOGLE:They get laid off. And, of course, the ironic part of that is they often get laid off — used to be called downsizing. But, of course, in today’s America, it’s called right sizing. They get laid off. That reduces expenses. That increases earnings and that means the CEO gets more.

Just think about the country for a minute. For an agricultural economy, 95 percent, 98 percent agricultural when this country came into existence. And even by 1850, half agricultural. Now it’s about, they moved from agricultural economy, to a manufacturing economy, to a service economy. And now to a financial service economy. And the financial service economy is what troubles me. Because it’s diverting resources from the investors to the capitalists. To the entrepreneurs. To Wall Street. To the investment bankers. The hedge fund managers. To mutual fund managers. And that is a negative to our societal values.

Where agriculture and manufacturing and services, I mean, I’m perfectly willing to give a high value, for example, to art and poetry and literature. They add value to society. It may not be easy to measure it in a society that measures too much of what’s not important. And not enough of what is important. As the sign in Einstein’s office says– “There are some things that count that can’t be counted. And some things that can be counted that don’t count.”

Straight from a pillar of the financial sector: a relentless focus on profit ultimately erodes value. We have long argued that improving the customer experience benefits the bottom line. Apparently, it also benefits society.

Transcript – September 28, 2007 [PBS]
Watch The Interview [PBS]

Comments

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  1. Jean Naimard says:

    Anglo-saxons, having been sired on a poor little island that was soon stripped of natural ressource had no choice but to venture overseas to get the ressources it needed to live.

    Eventually, the merchant class subverted the whole society (by having a huge military naval organization to protect the trading ships from their competition, or simply to bludgeon unwilling trade partners – opium wars, anyone?).

    The net result was that, for an anglo-saxon bourgeois, the ONLY measure of success was not how much he improved society, but simply how much money and power he was able to muster in order to improve his own lot.

    The ultimate conclusion of this mindset is a company that does nothing but shuffles paper (or increasingly binary bits on wires and in computers) and makes a lot of money.

    We have seen the future, and it is now.

  2. Nighthawke says:

    We’ve had problems like this before. The junk bonds and Miliken’s manipulations of them. It put a nice ding in alot of people’s wallets, but we recovered, smarter for the lesson.
    [en.wikipedia.org]

    Then the S&L blowout we had, lotta folks lost money over that. Sure it was a disaster, but we recovered with no permanent damage.
    [en.wikipedia.org]

    Now with this credit issue, this is affecting how many Joes and Janes? Not many, only the ones that let their cards take over their wallets.

    And this mortgage ordeal? Same thing, lotta folks let their spending get out of control and it dug them a nice hole.

    Look at it on the bright side folks, right now it’s a buyer’s market for homes, foreclosures or otherwise. You can make any real estate broker sweat blood over a deal if you play your cards right.

  3. humphrmi says:

    It goes into the pockets of hedge fund managers, mutual fund managers, bankers, insurance companies.

    .

    This is what every argument along the lines of “The man is pocketing your money” boils down to, and even more so today: We are the man. It’s like that mobile phone commercial a few years ago, “But sir, aren’t you the man?”

    Financial Service companies are, for the most part, publicly held companies just like the rest of the economy. My point is, that 560 billion isn’t taken out of the economy, it’s profits for publicly held companies that are redistributed to their shareholders, and it’s quite likely if you have a retirement plan or mutual fund you are one of those shareholders.

  4. axiomatic says:

    Honestly, I see this as a problem with the colleges and business schools. They are turning out “cookie cutter” employees that ONLY know how to effect the “short term.”

    America builds “yes men” not “entrepreneurs.”

  5. yikz says:

    Bernie Ebbers, Ken Lay, Joe Nacchio, along with John Rigas & sons all tried “creative” accounting in the past 7 years to enhance their balance sheets. Bill Moyers might say that Wall Street drove those men to do what they did.
    I don’t think Wall Street is the issue as much as society in general. Wall Street is responding to public demand.

    People have lost patience. They don’t have respect for long term investment. They don’t save money.
    People live paycheck to paycheck, heavily in debt. They are doing anything possible to keep the lifestyle they’ve become accustomed. They borrow against their homes. They roll debt into second mortgages.

    I think you’ll see a change in the coming years. It’s harder to file bankruptcy. The housing bubble is bursting. People are finding it harder to hide debt. They’ll soon start borrowing from their 401K’s. Identity theft is on the increase. Soon, more and more people will turn to crime to keep their lifestyle.
    There is a real lack of ethics in society today.

  6. I agree with the interviewee, and I’ll take it one step further – we, as consumers, have given up hope of NOT getting screwed by companies.

    When I invest, I’m resigned to knowing some paper pusher is going to be earning more off of my money than I am. When I buy a car, I know the company that built it plans on it collapsing within 8-10 years. When I buy insurance, I know the company that issues it, from that day forward, is looking for a way to cancel my policy the second I make a claim. I know that if I ever have to admit my parents into a nursing home, I’ll have to spend every afternoon there making sure medications have been administered and daily procedures done because there won’t be enough staff. Don’t even get me started on cell phones and cable providers.

    These fund managers, etc., are TAKING from the economy. But not just money – also the incentive to do ANYTHING that doesn’t immediately show as a gain on that quarter’s financial report. Little things like providing contracted services, customer service, or even just sheer honest, ethical behavior.

    EVERYONE is out to screw us in America now. It’s just that, after 30 years of it, we’re all reigned to it.

  7. I need an editor. That’s “It’s just that, after 30 years of it, we’re all RESIGNED to it.”

  8. Adam291 says:

    Capitalism is about long term interests, not short term profits. Most corporations, especially the multinationals, are neocolonials and merchantilists and do not have any vision past the upcoming fiscal year. They don’t care about their customers, workers, country or environment.

  9. Dan-Gilbert says:

    Don’t you think it’s only a matter of time before some corporation (a big bank, a retailer, an insurance company, etc.) comes along and makes customer satisfaction, customer service, honesty, and transparency (everything that is good) their primary concern, and use this as the basis of their advertising? I imagine that before long this behavior will actually prove profitable as everyone is so fed up with the bullshit from everyone else that they’ll be willing to pay a high premium for a legitimate product and honest experience. I don’t know if the endeavor would be successful, but if I were running a business, it’s what I’d try, and I go all-out with it too; the only way it’d work is if you took it all the way and really made your company stand apart from the rest. I think people would flock to it. Might be wishful, optimistic thinking though.

  10. VidaLondres says:

    Digg it!

    [digg.com]

  11. InThrees says:

    Many people think the ‘beginning of the end’ for the American auto industry was when CEOs who were more worried about stock prices and profits became common. (50s and 60s specifically, and the decline in quality became incredibly obvious from that point on.)

    Contrast that with I forget which executive at Toyota said something like (paraphrased) “I never worry about Toyota’s stock price. I don’t plan to sell it.”

    I totally agree with the gist of the article – too many companies are worried solely about the bottom line, to the exclusion of delivering a competent quality product with competitive customer service. You know, qualities that tend to drive long term profits and return visits from consumers.

    I’ve been a partner in a small business before, and the correct attitude isn’t “how can I wring as much profit out of the next week as possible?”

    It is “how can I act in a way that reflects that I will be in business 10, 20, 50 years from now?”

  12. taka2k7 says:

    I’m not sure if Moyers should be getting a Nobel prize, Sainted or the Congressional Medal of Freedom… he rocks!

    Seriously, I can’t think of too many other reporters who are leaning as far forward as he is to point out the bull$h1t know as our collective governments and corporations. Yes there are some socially responsible corporations out there, but they are far outnumbered by the money grubbing CEOs of the land. (Seriously over $129M for managing OTHER PEOPLE’S MONEY? WTF? Pay them 1% that and they’re still comfortable. The other $128M+ needs to go back to the investors and financial firms worker bees.)

  13. Die_Fledermaus says:

    @ HUMPHRMI

    The article is arguing for limits on executive pay, focus on long term profits and greater payments to share holders. I am not “The Man” as i am not one of the mulitmillionaire CEO’s of the finanical mangement companies.

    The reason all the focus is on the short term, is these CEO’s are grabbing as much money as they can, knowing that this situation can not last for ever. Then they stockpile it away. Taking the money OUT of the economy.

    From the article “The evidence is quite compelling that today corporations are run in a very important way to maximize the returns of its managers at the expense of its stockholders.

    Its CEOs, well, the upper level of five or six top officers.” and

    “If you didn’t make a $129 million last year — I’m presuming that you didn’t. You don’t rank among the highest paid 25 hedge fund managers. A $129 million doesn’t get you into the upper echelon.”

  14. olegna says:

    >> My point is, that 560 billion isn’t taken out of the economy, it’s profits for publicly held companies that are redistributed to their shareholders, and it’s quite likely if you have a retirement plan or mutual fund you are one of those shareholders. <<

    Sort of like saying your FICA deductions on your paycheck isn’t really a “tax” becaus eyou’ll get it back when your 65.

    I see your point, but if the money is being “redistributed” into mutual funds and retirement funds it’s money that is not currently in the economy except inside the capital gains system.

    Good analogy: My family have owned a business for 25 years. Sales peaked in 1996 at seven million. Today the company barely breaks even. (I’m not involved in it.)

    My parents are not re-investing past profits into the company. They took the profits and invested it in their retirement and capital gains. Today they earn money off capital gains, and they only keep the business around to keep the employers employed and to be part of the group health plan. They did this because they wanted to retire early, not devote their entire lives to the growth of the business. That was their rightful choice. The company could close tomorrow and they have their money divested from it.

    I think more business owners (not to mention corporations) are doing this now than ever before.

    I think what Bogle is saying is that in the 1950s people like my parents would have continued to reinvest the profits back into the company and created a larger company with more employees and longer term goals.

    Today, a lot of entrepreneurs ad executives simply take the profits of their enterprises and invest them in capital gains mechanisms. As soon as they have enough money to hire money managers, and as soon as they have enough money to live off the capital gains, they don’t reinvest in growth. They only invest in growth in shorter terms until they have enough capital to live off their portfolios or other non-business-related investments.

    The analogy is good, I think. Think of the employers of this company as “the American people”. If my parents had decided to reinvest past profits the company would probably be larger, with more employers. (At the same time they would have had to work longer and possibly risked their retirement fund.) Instead at some point they chose to take the profits and invest them in other things than the long-term growth of the business itself.

    So in essense, they “took money out” of the company and put that money in capital gains, benefiting neither the company nor the employers but rather providing them with the means to retire early and shed their dependence on the company’s growth.

    In any case, I don’t buy the argument that just because more people are “encouraged” to tie their retirements to private capital gains mechanisms that this makes it a “democratic” system from which all benefit.

    The statistics on the increasing concentration of wealth in the top tier undermines that entire argument. When are people going to let go of supply side economics; trickle down doesn’t work, unless by trickle down you mean “trickle between butt cheeks of the wealthy and invested down to the rest of us, so we can fight over the droplets.”

    But I suppose that just makes me a un-American commie.

  15. TechnoDestructo says:

    @axiomatic:

    Short term vs. long term: GM vs. Toyota.

  16. SOhp101 says:

    I think it’s funny that everyone’s getting angry at financial managers when it’s really the stockholders who are constantly bickering with silly demands like “make double digit growth every quarter!”

    CEOs do get paid too much in most cases, but if you think that’s the case, why not hire members on the board that will actually pay them accordingly?

    People in finance are only responding to the demands of stockholders for ridiculous amounts of short term growth because if they don’t then they’ll be out of a job. Stop shooting the messenger.

  17. bohemian says:

    Not only are investors, but corporate management acting like looters. They stick around as long as they are able to siphon as much money as possible and when the money runs out the run to the next source of money.

    The investors profits in Sally Mae in the past few years were huge. Had I sunk some money into that I could have had my student loans paid off.

  18. Mr. Gunn says:

    Hey, it’s human nature to be profit-seeking. Everyone says that socialism doesn’t work because of human nature, so it’s likewise unrealistic to expect those aspects of capitalism that depend on people acting contrary to their short-term interest to work.

    It takes educated and intelligent people to sacrifice short-term gains for long-term rewards, and we as a population are getting stupider by the day.

  19. ogman says:

    It’s about time these fools figured out what’s going on. Now, how long before they do something about it?

  20. humphrmi says:

    @Die_Fledermaus: Do you own stock? Then you are the man. Shareholders determine executive pay. If you don’t like the executive salaries of the companies you hold, buy more stock, get on the board, and fire the CEO.

  21. Keter says:

    @Adam 291 – “Most corporations, especially the multinationals…don’t care about their customers, workers, country or environment.” — Multinationals are above countries, patriotism, responsibility, and even above the law…once you have enough money, fines and lawyer fees just don’t matter; they cannot be meaningfully sanctioned for their abuses.

    The answer is simple: outlaw corporations-as-persons; require everyone who has a financial interest in an organization to be individually responsible for the actions of their company. Require companies doing business (of a certain $ magnitude or greater) in the United States to be headquartered here, to employ a high percentage of US citizens at all pay scales, and to pay local property taxes like every homeowner.

    @Ogman – who is “they”? The “they” who are in a position to be able to do something are the ones benefiting from it. They aren’t going to do this willingly! The “they” (meaning “us”) who object don’t have the power to effect change unless we organize and consistently use our spending (or lack thereof) to destroy the abusers. Let’s say we’ve identified XYZ, Inc. as a huge abuser of their corporate power. Could we make it so shameful to do business with them or with anyone who does business with them that they were forced to shut down?

  22. Die_Fledermaus says:

    Buy more stock! I never realized it was so simple. How exactly would I get the money to do this? As if anyone reading these posts could gain enough stock in a company to fire the CEO. Great idea!! I guess i should invest all those millions i have sitting under my mattress.

    Thanks for your brilliant statment!!!

  23. Imaginary_Friend says:

    This is the most bone-chilling article I’ve ever read on the Consumerist. America is in deep shit.

  24. Anonymous says:

    Warren Buffett pointed out in a recent letter to shareholders that as much as 20% of all the wealth produced in the US each year goes to Wall Street middlemen, who mostly just facilitate other people’s transactions.

    I see the whole thing as a war between people’s greed for money and status, and the more fundamental urge to make something cool and valuable. The financial services industry is very good at sucking in people who are hardworking and ambitious without being too smart or scrupulous (I was a finance major and saw this firsthand in college; the really smart people I knew steered clear of it because they didn’t want to spend their 20’s working 100-hour weeks doing spreadsheets for The Man). Part of the problem is that people unconsciously assume that just because you’re being paid a lot of money you must be doing something valuable, which is like assuming that just because Enron is reporting record profits they must be on a tear.

    There’s a difference between making money and getting money.

  25. Rusted says:

    I’m glad I got Vanguard funds at least.

  26. TickedOff says:

    There’s a reason for this problem. From Solow’s equation there are only 2 contributing inputs to sustainable GDP growth: population growth and added efficiency. Population because every additional head has a lifetime of incremental needs and contributions to the economy. Efficiency because using resources better has a multiplicative effect on everything else. The primary component of efficiency is technology.

    On the other hand, inputs like “services” and “service industries” are zero-sum economic activities which could be called “parasitic” because they don’t actual contribute to GDP growth in a true sense but rather “take a cut” from true growth in exchange for some “overhead” value to the whole. Normally when done in moderation this provides a useful contribution because there are many overhead activities that must occur simply to “make” more population or efficiency growth happen.

    For those from a corporate world-view: there are only two profit-centers and all the rest are cost-centers. The financial industry is a cost-center just like a corporate finance department. Some finance departments discover they can make more money with leasing that with : think GMAC vs. GM. This attempts to make a cost-center a profit-center. The problem is that the cost-center services tend to be the first to go (they’re inefficient) so now the profit-centers suffer (so maybe R&D profit centers get outsourced). Ultimately if no one is making cars, the car financing isn’t going make any difference because now your economy isn’t based on efficiency anymore but instead is based only labor-limited businesses in a society that has no labor surpluses (compared to India or China or other developing nations). More outsourcing occurs and more inefficiency follows. The problem is that efficiency always pays better in the long term than services.

    Between outsourcing and financial “robbing-Peter-to-pay-Paul”, the core economic infrastructure of the US is being liquidated to maintain a faux growth. It’s akin to relying on anorexia to look lean-and-mean – ultimately the internal organs and bones are eaten away to supply the nutritional needs that remain despite the mixed up intent. Another analogy: bacteria are parasites to larger animals. These bacteria either coexist as an ecosystem player normally or they “get too greedy”, “too virulent” and they create pathological diseases or even kill the host despite themselves. This is exactly what’s happening in the USA today.

  27. Jordan Lund says:

    I’ve said for years the problem isn’t for profit companies. The problem is Wall Street driving the idea that if you don’t make a bigger profit than you did last year that you are somehow “losing” money.

    Under Wall Street rules it doesn’t matter if your company is profitable. You have to be more profitable than you were at the same time last year, you have to be more profitable than the week before, the month before, the quarter before.

    This unhealthy attachment to growth is the problem. If it were simply a matter of “Hey, did you make more money than you spent? You did? AWESOME!” the world would be much better off.

  28. doormat says:

    He targets the financial services industry and mentions the insurance industry by name.

    The goal of the insurance industry has transformed, from proviing a service for people in need (car accident, death, etc) to a mechanism to take peoples’ money and then deliver as little as possible when there is a claim.

    Its all about taking in as much money as you can with a big smile on your face, and then when people expect that money back, delivering as little as possible.

  29. andrewsmash says:

    I think part of the problem is that a large part of this country has been dealing with PTSD since the great depression. We have all of these people running around, convinced that some nebulous boogie man will take all of their stuff, and the only defense is to have as much as possible. Combine that with the fact that we have a news media that pushes fear like a drug, and you have, at this point, four generations of Americans who are not only convinced that they have to have as much stuff as possible, but also that since the world is going to end tomorrow anyway, it doesn’t really matter how they get it. And of course the inherent contradiction of why have so much stuff if the world is ending doesn’t occur to them, so the cycle just continues. Of course, when wealth becomes too consolidated at the top, the people at the bottom inevitably revolt, so in the end, I guess it becomes a self-fulfilling prophecy.

  30. Christan_Eff says:

    @Mr. Gunn: This is economally wrong. Human nature, from an economic standpoint, is to maximise utility, not to seek profit, per se. Yes, they are different.

    Now that being said, economists also tend to premise theory on the notion that man is a “rational actor,” aka “homo economicus,” and foundation for such a premise is flimsy… at best.

    But back to the original point, I don’t know who the “everyone” is that says socialism fails because of human nature. Both socialists and capitalists, generally speaking, are interested in maximising their utility. A capitalist would often tie this concept to short term profit. We can see how that is going. Socialists would argue that the individual maximises utility when society maximises utility, i.e. “if nobody’s starving then the chances of my being mugged are greatly reduced, and thus my well-being rises with everyone elses’.” Unfortunately, few have made any wholehearted efforts to enact such a system. Maybe that is changing or will change soon. In any event, both systems live and die on the corruption of the individuals therein, not, as you claim, by way of human nature writ large. The vast majourity of people are likely well-intentioned (and, not coincidentally, virtually powerless in the grand scheme of things).

    Your point about education is well-taken: compare U.S. education and social welfare structures (not to mention happiness and quality of life statistics) to those of Northern Europe, and your point becomes incredibly well illustrated.

  31. Christan_Eff says:

    @Jordan Lund: Can’t it be both?

  32. “Wall Street’s relentless drive for short-term profit is ruining America”

    No duh.

  33. IRSistherootofallevil says:

    Here’s the thing….American companies, from my experience, don’t invest in long-term growth and only do what is necessary to churn out profits for the next quarters (most of them anyway) and then bitch and moan about how such and such a company is more successful than them 10-20 years later because such and such a company invested in long-term growth and they didn’t. And then they go create some government lobby and and lobby the government to severely hinder the innovation of such and such a company so they can remain “profitable.” Or they just straight up ask for bailout money.

    And the more fucked up thing is, the government GIVES them bailout money. If I were in government I’d tell them to go fuck themselves. And those CEO’s, they never officially get canned, the CEO of ford made $28 million in ONE QUARTER while Ford lost $12 BILLION. And when the board fired him, I bet they gave him another $25 million.

    At some point, enough is enough. And when the CEO of a company that’s bleeding red ink year after year is making 8 figures and is getting paid another 8 figures when he gets fired, enough is enough.