5 ms·

I've always assumed they're basically legalised bribery, but I'd be interested to hear the best non-cynical explanation. Off the top of my head, I guess it coul

I've always assumed they're basically legalised bribery, but I'd be interested to hear the best non-cynical explanation. Off the top of my head, I guess it could be a way of buying status-by-association, showing prospective clients and employees that you're a serious player with money to splash around and connections to power. (Which I admit is still a fairly cynical explanation.)

thedudeabides5 6y ago
Imagine a world where you, personally, pay $300mm a year to financial professionals in your employ to help you manage say ...$10bn Let’s say you take that $10bn and manage a portfolio with ~30% a year volatility. So you pay $300m to manage a bunch of assets that move around by ~$3bn a year. All of a sudden paying $500k for a speech, a dinner, and a the start of a relationship with a top 10 government policymaker, seems like a bargain. Same reason Clinton and Obama can do the same after the leave office. Part wisdom, part networking. Doesn’t have to be nefarious to be a good investment when your business is that scale.
- byecomputer 6y ago
  Some might argue that public officials being paid extraordinary sums by private investment firms in exchange for access and influence is nefarious in itself.
  - travmatt 6y ago
    Some might argue that you should provide evidence and arguments that support your allegation that’s she’s selling influence.
    - tor11 6y ago
      influence is the product sold by politicians
    - testrun 6y ago
      If you cannot see the conflict interest here then there is a big problem. You cannot have people responsible for policy also being paid by organisations that they are meant to oversee. The biggest thing that keeps a democracy a democracy is trust in institutions. The last two decades we have lost an immense amount of trust in our institutions, and it is going to be very difficult to get it back. Speaking fees of $800 000 for former public servants and public servants to be anointed does not help.
aneemzic 6y ago
Why does comic-con pay famous actors to appear? I assume because it attracts the type of audience they see as their customers. Hedge fund billionaires, bankers and policy makers on the other hand aren't going to show up to listen to what johnny depp has to say. So you have to pay for someone who will be draw for them. The higher the status of the customers you want, the more you'll find yourself paying.
- nanis 6y ago
  > Why does comic-con pay famous actors to appear? In the case of Comic-Con, they do that because their audience who pay for their tickets are more likely to pay if the actors they like are part of the experience. In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess. Even "networking" in this context is geared towards signaling to friend & foe that you now have inside reach to people whose actions or even mere words can move mountains of money in one direction or another. Totally different. By the way, this is standard textbook economic analysis and it would not be different if the names and political parties were switched.
  - aneemzic 6y ago
    > Totally different. I don't see how they are different at all. The talker is used to bring in a certain type of person they're looking for. How they convert that persons attendance in to a return for their business is irrelevant. Comic-on doesn't just make money on tickets, bringing those customers in also leads to them making more transactions inside > In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess. That's conjecture and no we aren't. We were specifically discussing “wall street speaking fees” and why they demand such a high rate. Which there are clearly other valid business incentives other than the one you've landed on. As to whether this specific case had nefarious motives. I don't know enough to have a strong opinion either way.
  - travmatt 6y ago
    I have a hard time reconciling the fact you claim to be making a dispassionate analysis, and yet cannot find a single accomplishment of Janet Yellen that would merit her being an in-demand speaker, except her ability to ‘direct government largesse’. If you were trying to make a sincere argument, I suspect you’d find a few reasons people would value her ideas.
nonameiguess 6y ago
Maybe sometimes this is it, but it clearly isn't always legalized bribery. Celebrities command huge speaking fees even though you almost certainly aren't getting any out of them other than the thrill of personal time with a celebrity. You may as well ask why some prostitutes can command $10,000 an hour rates. They're not hundreds of times better at sex. The purchase is just being made by some entity with way more money than anyone should have and not enough good uses for it. It's like when Bobby Axelrod in Billions buys a private performance from Metallica. He isn't gaining any investing edge, but what's the point in being that rich if you can't blow huge amounts of money to be close to famous people you admire? If you're in finance, Janet Yellen is a celebrity. If I had enough money that ten million could get lost in my couch without noticing, I'd probably pay her to talk to me.

thedudeabides5 6y ago

Imagine a world where you, personally, pay $300mm a year to financial professionals in your employ to help you manage say ...$10bn Let’s say you take that $10bn and manage a portfolio with ~30% a year volatility. So you pay $300m to manage a bunch of assets that move around by ~$3bn a year. All of a sudden paying $500k for a speech, a dinner, and a the start of a relationship with a top 10 government policymaker, seems like a bargain. Same reason Clinton and Obama can do the same after the leave office. Part wisdom, part networking. Doesn’t have to be nefarious to be a good investment when your business is that scale.

byecomputer 6y ago
Some might argue that public officials being paid extraordinary sums by private investment firms in exchange for access and influence is nefarious in itself.
- travmatt 6y ago
  Some might argue that you should provide evidence and arguments that support your allegation that’s she’s selling influence.
  - tor11 6y ago
    influence is the product sold by politicians
  - testrun 6y ago
    If you cannot see the conflict interest here then there is a big problem. You cannot have people responsible for policy also being paid by organisations that they are meant to oversee. The biggest thing that keeps a democracy a democracy is trust in institutions. The last two decades we have lost an immense amount of trust in our institutions, and it is going to be very difficult to get it back. Speaking fees of $800 000 for former public servants and public servants to be anointed does not help.

aneemzic 6y ago

Why does comic-con pay famous actors to appear? I assume because it attracts the type of audience they see as their customers. Hedge fund billionaires, bankers and policy makers on the other hand aren't going to show up to listen to what johnny depp has to say. So you have to pay for someone who will be draw for them. The higher the status of the customers you want, the more you'll find yourself paying.

nanis 6y ago
> Why does comic-con pay famous actors to appear? In the case of Comic-Con, they do that because their audience who pay for their tickets are more likely to pay if the actors they like are part of the experience. In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess. Even "networking" in this context is geared towards signaling to friend & foe that you now have inside reach to people whose actions or even mere words can move mountains of money in one direction or another. Totally different. By the way, this is standard textbook economic analysis and it would not be different if the names and political parties were switched.
- aneemzic 6y ago
  > Totally different. I don't see how they are different at all. The talker is used to bring in a certain type of person they're looking for. How they convert that persons attendance in to a return for their business is irrelevant. Comic-on doesn't just make money on tickets, bringing those customers in also leads to them making more transactions inside > In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess. That's conjecture and no we aren't. We were specifically discussing “wall street speaking fees” and why they demand such a high rate. Which there are clearly other valid business incentives other than the one you've landed on. As to whether this specific case had nefarious motives. I don't know enough to have a strong opinion either way.
- travmatt 6y ago
  I have a hard time reconciling the fact you claim to be making a dispassionate analysis, and yet cannot find a single accomplishment of Janet Yellen that would merit her being an in-demand speaker, except her ability to ‘direct government largesse’. If you were trying to make a sincere argument, I suspect you’d find a few reasons people would value her ideas.

nonameiguess 6y ago

Maybe sometimes this is it, but it clearly isn't always legalized bribery. Celebrities command huge speaking fees even though you almost certainly aren't getting any out of them other than the thrill of personal time with a celebrity. You may as well ask why some prostitutes can command $10,000 an hour rates. They're not hundreds of times better at sex. The purchase is just being made by some entity with way more money than anyone should have and not enough good uses for it. It's like when Bobby Axelrod in Billions buys a private performance from Metallica. He isn't gaining any investing edge, but what's the point in being that rich if you can't blow huge amounts of money to be close to famous people you admire? If you're in finance, Janet Yellen is a celebrity. If I had enough money that ten million could get lost in my couch without noticing, I'd probably pay her to talk to me.