The Distinctly American Ethos of the Grifter

09/23/19 | by david2 [mail] | Categories: General

Link: https://www.nytimes.com/2019/09/12/t-magazine/the-distinctly-american-ethos-of-the-grifter.html

GRIFTING IS ARGUABLY a natural, even inevitable byproduct of American democracy. The French diplomat Alexis de Tocqueville, casting a gimlet eye on the brash young nation in “Democracy in America” (1835-40), wrote, “When all the prerogatives of birth and fortune have been abolished, when all professions are open to all and a man’s own energies may bring him to the top of any of them, an ambitious man may think it easy to launch on a great career and feel that he has been called to no common destiny.” But this is a delusion; with the expansion of opportunity comes a corresponding flattening of hopes, as ever more people compete for the same limited number of spots. And because nothing appears to stand in the way of success in this brave new world (at least the utopian vision of it), no acknowledged social or systemic bias, we are expected — nay, mandated — to rise, our worth measured not only by the height but the speed of our ascent. Failure is wholly individual; we are allowed to blame no one but ourselves if we fumble. No wonder de Tocqueville sensed despair in even the wealthiest Americans he met: “It is odd to watch with what feverish ardor the Americans pursue prosperity and how they are ever tormented by the shadowy suspicion that they may not have chosen the shortest route to get it.”
Failure is built into grift; after all, if you get away with it, you’re no longer on the outside — you’re part of the system. What is the ultimate grift but to make good on your unlawful rewards and prove that you deserved them all along? We call that an American success story. We call that leaning in.

 

Starting in 1970

08/10/19 | by david2 [mail] | Categories: General

Jensen agreed with Berle’s starting point: Corporate managers were unaccountable because shareholders could not restrain them. But rather than seeing a remedy in checks exerted by regulators and organized labor, Jensen proposed to overhaul the firm so that ownership and control were reunited. Executives should be rewarded more with stock and less with salary, so that they would think like shareholders and focus on the profits that shareholders wanted. Managers who failed to generate a good return would see their stock prices languish, which would create tempting takeover targets. A market for corporate control would redouble the pressure on bosses to behave like owners. Successful takeovers, in turn, would shift corporations into the hands of single, all-powerful proprietors, capable of overseeing management more effectively than scattered stockholders could. In sum, Jensen’s prescriptions inverted Berle’s. The market could be made to solve the problem of the firm. Government could pull back from regulation.

 

Yet a large cost eluded Jensen’s calculations. The social contract of the Berle era was gone: the unstated assumption of lifetime employment, the promise of retirement benefits, the sense of community and stability and shared purpose that gave millions of lives their meaning. Berle had viewed the corporation as a social and political institution as much as an economic one, and the dismembering of corporations on purely economic grounds was bound to generate fallout that had not been accounted for. Meanwhile, Jensen’s market-centric mind-set permeated finance, enabling opaque risks to build up in banks and other trading houses. As the collapse of Enron and other corporate darlings revealed, a good deal of non-market-related accounting fraud compounded the fragility. Even before the 2008 crash, Jensen disavowed the transactional culture he had helped to legitimize. Holy shit, Jensen remembers saying to himself. Anything can be corrupted.

prestidigitation, double shuffling, honey-fugling, hornswaggling, and skullduggery

08/10/19 | by david2 [mail] | Categories: General

Link: https://www.theatlantic.com/magazine/archive/2019/09/nicolas-lemann-binyamin-appelbaum-economics/594718/

A little more than a generation ago, a stealthy revolution swept America. It was a dual changing of the guard: Two tribes, two attitudes, two approaches to a good society were simultaneously displaced by upstart rivals. In the world of business, the manufacturing bosses gave way to Wall Street dealmakers, bent on breaking up their empires. “Organization Man,” as the journalist William H. Whyte had christened the corporate archetype in his 1956 book, was ousted by “Transaction Man,” to cite Nicholas Lemann’s latest work of social history. In the world of public policy, lawyers who counted on large institutions to deliver prosperity and social harmony lost influence. In their place rose quantitative thinkers who put their faith in markets. It was The Economists’ Hour, as the title of the New York Times editorial writer Binyamin Appelbaum’s debut book has it.

 ...

The first section of Lemann’s elegant history conjures up the corporatist order that preceded Transaction Man’s arrival. The story is shaped around Adolf Berle, a lawyer who, with the statistician Gardiner Means, wrote The Modern Corporation and Private Property, a classic study of the concentration of power in the hands of company managers. Before the publication of that masterpiece, in 1932, other authors had drawn attention to what one of them called the “prestidigitation, double shuffling, honey-fugling, hornswaggling, and skullduggery” employed by corporate executives to dupe their supposed masters, the shareholders. Berle went further. He laid out in detail how shareholders, being so dispersed and numerous, could not hope to restrain bosses—indeed, how nobody could do so. Enormous powers to shape society belonged to company chieftains who answered to no one. Hence Berle’s prescription: The government should regulate them.

A history of socialism in America as compared with Europe -

08/01/19 | by david2 [mail] | Categories: General

Link: https://www.nytimes.com/2019/08/01/opinion/social-democracy.html

The Social Democratic movement first emerged in Germany in the late 1800s under Otto von Bismarck, the country’s first chancellor. It proliferated and flourished in Western Europe as an antidote to the violence of the Russian Revolution, the emergence of totalitarian Communism and the destruction wrought by two world wars. In Europe, and later in Latin America, governments placed a greater emphasis on the role of the state in regulating market economies, protecting the weakest sectors of society, seeking to reduce poverty and inequality as much as possible under a capitalist model, defending the environment and strengthening labor unions, workers’ parties and progressive institutions. The United States missed that train, largely because it didn’t face the same challenges. The American, more deregulated, everyone-for-himself, free-market model delivered the goods for years, without labor parties or strong unions, with a distant and reduced role for the state in the market and society, and with the exclusion of important sectors of its inhabitants from that society. Franklin Delano Roosevelt’s New Deal was a semi-Social Democratic response to the Great Depression, but it didn’t stick. Until Ronald Reagan’s election in 1980, the economy’s steady growth kept inequality down, and the middle class thrived. Americans could afford the luxury of a smaller, less expensive welfare state because of its rich middle class. After the 80s, that began to change.

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