The populist outrage over the AIG bonuses seems to illustrate the confusion about what capitalism is now.
At one point, capitalism was a contest between the worker and the capitalist. And the capitalist was a rich and powerful INDIVIDUAL. Carnegie or Rockefeller, for example, had power to dictate wages and prices. Investment depended on capitalist elites; work depended on the alienated proletariat.
But people angry about the AIG bonuses are not angry at the rich and powerful individuals. They are angry at knowledge workers and professionals who they suspect have abused their positions.
In today's world, it is the pension funds that direct investments. Powerful individuals have very little power compared with what they had decades ago.
The populist outrage against AIG is, oddly, the outrage of workers against workers. The AIG bonuses were given to knowledge workers – management and analysts – who manage the investments of (and insure) knowledge workers.
This whole mess is no longer a matter of class warfare between Marx's capitalists and workers. Class warfare that might be described by Marx has been replaced by the split personality of schizophrenia that might better be predicted by Freud. What was once fought in the social arena has become a battle over identity. Are these investments made on behalf of capitalists or labor?
The real lesson of Keynesian economics is to subordinate the goals of capital markets to the goals of the broader economy. Returns to capital - for instance - are made lower in order to stimulate employment and consumption. Obama and his advisers are of this school.
But it could be that once pension funds realize that they are themselves the tools of workers, they would do this themselves. It is one thing to run a pension fund in order to maximize returns to capital. It is another to run a pension fund to maximize returns to the workers that depend on the investment of capital to keep jobs and to become more productive. Once pension funds operate from this insight, they may well begin to manage their investments differently.
The problem may not be economic. It may simply be a matter of identity. It seems time that pension funds realized who they were and whose interests they really ought to take seriously.
R World (Ron Davison muses aloud)
Showing posts with label AIG. Show all posts
Showing posts with label AIG. Show all posts
16 March 2009
Skewed News (my attempt to reassure the former readers of the Seattle PI that blogs are able to step into the void and provide trustworthy coverage)
It's an American tradition at least as predictable as airport congestion around Thanksgiving: horror films released on the Friday the 13th weekend featuring someone like Freddie or Jason coming back yet again. On a probably unrelated note, Dick Cheney appeared on "State of the Union" Sunday.
400 AIG employees will split about $165 million in bonus money. The word bonus is from the Latin for bonehead, as in, "in a series of boneheaded moves, AIG nearly took down the economy, then single-handed created a deficit the size that once required a Reagan-era tax cut, and then rewarded their deciders."
50 years ago, the Barbie doll debuted. 50 years ago, the Dali Lama fled Tibet. Had he been following trends, might have realized that even the young had become so precocious that they were unlikely to back anything that sounded so unsophisticated as "dollie." In order to get more support for the Tibetans, the Dali Lama is planning to be reincarnated as a 5' 10" blonde with double-D's. He expects that this will help to create more outrage should the Chinese government again invade. At that point, taking his lead from the popularity of Barbie, "she" will go by the name Lama Dal.
Airlines lost 40 million bags in 2007. Records just released indicate that this was not accidental. As part of the 2007 bailout plan, airlines were required to lose this much baggage as part of a subtle but quite effective stimulus plan: people forced to buy new wardrobes, luggage, and toiletries actually delayed the recession by over a year.
Obama has announced his intention to stimulate small businesses. This will be easier as we go further into the recession. Between layoffs and shrinking revenues, projections indicate that half of the Fortune 500 will soon become "small businesses."
400 AIG employees will split about $165 million in bonus money. The word bonus is from the Latin for bonehead, as in, "in a series of boneheaded moves, AIG nearly took down the economy, then single-handed created a deficit the size that once required a Reagan-era tax cut, and then rewarded their deciders."
50 years ago, the Barbie doll debuted. 50 years ago, the Dali Lama fled Tibet. Had he been following trends, might have realized that even the young had become so precocious that they were unlikely to back anything that sounded so unsophisticated as "dollie." In order to get more support for the Tibetans, the Dali Lama is planning to be reincarnated as a 5' 10" blonde with double-D's. He expects that this will help to create more outrage should the Chinese government again invade. At that point, taking his lead from the popularity of Barbie, "she" will go by the name Lama Dal.
Airlines lost 40 million bags in 2007. Records just released indicate that this was not accidental. As part of the 2007 bailout plan, airlines were required to lose this much baggage as part of a subtle but quite effective stimulus plan: people forced to buy new wardrobes, luggage, and toiletries actually delayed the recession by over a year.
Obama has announced his intention to stimulate small businesses. This will be easier as we go further into the recession. Between layoffs and shrinking revenues, projections indicate that half of the Fortune 500 will soon become "small businesses."
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