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The article starts with a magnificent exercise in false equivalence: "We have no problem taking Wall Street executives to task for decisions that leave America

by geebee 12y ago

The article starts with a magnificent exercise in false equivalence: "We have no problem taking Wall Street executives to task for decisions that leave American families financially devastated, yet we give Silicon Valley billionaires a pass when they do the same thing". No, they don't do the same thing. If I automate in 5 minutes with software a process that used to take three people with pencils and erasers four months, I have not done the same thing as taking out insurance policies against bad mortgage securities that only I know are bad because I'm the one who took the good mortgages out and replaced them with bad mortgages because the fine print allowed me to do this. Yes, both do eliminate some jobs. One because those jobs can now be done more efficiently by machines. The other, because massive amounts of wealth was destroyed by financial trickery. It's so hard to get past that point that I almost didn't read the more sensationalistic presented but nonetheless worthy of consideration issues that followed. Yes, social media and other internet behemoths are doing alarming things to privacy. Yes, we need to be concerned if we send millions out of work, with no clear path to employment. Yes, we should be concerned about the intense concentration of wealth in a winner-take-all economy. All kinds of interesting ideas have been presented (minimum basic income, for instance). But you won't find any discussion of them in this article.

balabaster 12y ago
Yes, but if you dig a bit deeper, the wealth was created by massive amounts of financial trickery too. Most of the paper that supports the stock market is really just a fabrication of an illusion - people mostly selling virtual pieces of paper that suggests you own a right to buy and/or sell something if a hypothetical scenario ever occurs. So to say that the wealth was destroyed by financial trickery isn't the whole story... it was created by that same trickery. All the wealth you see in the real world (the big mansions, flashy cars, accumulation of stuff, that nice secure feeling you have because of all the money you have in your bank account, your ability to purchase stuff) is built upon an illusion that only exists in a virtual reality. While companies are allowed to fabricate wealth pretty much out of thin air, what can you expect? Not that I'm disagreeing with your larger point. In comparison to Silicon Valley, Wall Street is a city of charlatans.
- geebee 12y ago
  I completely agree with you that when measuring losses, you have to consider the fact that much of the wealth lost never existed in the first place. There is still a tremendous amount of collateral damage, but a proper accounting is important. I remember thinking along similar lines during the enron scandal. Evidently, employees moved all their retirement account money into Enron stock, and lost everything when the company tanked. There was an article about a couple who had lost $500,000. At the time, I do remember thinking - did they contribute $500k in principle, or was 500K the peak value of their 100% enron portfolio before it all fell apart? If it's the latter (and it probably was), then it's entirely possible that they contributed no more than 50k (perhaps even considerably less) to the account.
  - balabaster 12y ago
    ...and that's probably the same for 90% of everyone's retirement portfolio. The "we lost everything we had" line could be as meaningless as having someone say "well, I put all my life savings in this slot machine because the guy at the casino said he'd been keeping track of it and it's been paying out over the odds for months, and at first, it seemed to be true... until I put in my last dollar and it blew up." Not that this makes anyone feel any better about losing their life savings - but risk is risk... and betting all your life savings on something as fickle as an illusion carefully sculpted by financial giants to pad their coffers, protected by bills carefully designed by lobbyists to protect what might as well be fraud, all buoyed up by public opinion of those chasing the dream of endless wealth [which about sums up the entire financial market], is a gamble no matter how you look at it. What did we learn about gambling in school? The odds always favour the house... and unless you're the house [which you're not, because the house is the conglomerate of banks that propagate this mess], you're extremely unlikely to win.

by geebee 12y ago

balabaster 12y ago

Yes, but if you dig a bit deeper, the wealth was created by massive amounts of financial trickery too. Most of the paper that supports the stock market is really just a fabrication of an illusion - people mostly selling virtual pieces of paper that suggests you own a right to buy and/or sell something if a hypothetical scenario ever occurs. So to say that the wealth was destroyed by financial trickery isn't the whole story... it was created by that same trickery. All the wealth you see in the real world (the big mansions, flashy cars, accumulation of stuff, that nice secure feeling you have because of all the money you have in your bank account, your ability to purchase stuff) is built upon an illusion that only exists in a virtual reality. While companies are allowed to fabricate wealth pretty much out of thin air, what can you expect? Not that I'm disagreeing with your larger point. In comparison to Silicon Valley, Wall Street is a city of charlatans.

geebee 12y ago
I completely agree with you that when measuring losses, you have to consider the fact that much of the wealth lost never existed in the first place. There is still a tremendous amount of collateral damage, but a proper accounting is important. I remember thinking along similar lines during the enron scandal. Evidently, employees moved all their retirement account money into Enron stock, and lost everything when the company tanked. There was an article about a couple who had lost $500,000. At the time, I do remember thinking - did they contribute $500k in principle, or was 500K the peak value of their 100% enron portfolio before it all fell apart? If it's the latter (and it probably was), then it's entirely possible that they contributed no more than 50k (perhaps even considerably less) to the account.
- balabaster 12y ago
  ...and that's probably the same for 90% of everyone's retirement portfolio. The "we lost everything we had" line could be as meaningless as having someone say "well, I put all my life savings in this slot machine because the guy at the casino said he'd been keeping track of it and it's been paying out over the odds for months, and at first, it seemed to be true... until I put in my last dollar and it blew up." Not that this makes anyone feel any better about losing their life savings - but risk is risk... and betting all your life savings on something as fickle as an illusion carefully sculpted by financial giants to pad their coffers, protected by bills carefully designed by lobbyists to protect what might as well be fraud, all buoyed up by public opinion of those chasing the dream of endless wealth [which about sums up the entire financial market], is a gamble no matter how you look at it. What did we learn about gambling in school? The odds always favour the house... and unless you're the house [which you're not, because the house is the conglomerate of banks that propagate this mess], you're extremely unlikely to win.