Couple of thoughts:
The only justification that today’s Wall Street can make for its economic existence is that it provides some kind of efficiency in allocation of investing. First — most obvious — question might be whether a hedge fund manager can possibly provide so much extra allocation efficiency as to be personally worth a billion dollars a year for his “service” to the economy? Second — most damning — observation is that today’s Wall Street casino (using Wall Street as cover for the financial industry all across the country) has resulted in finance (A.K.A., PAPER WORK) growing from 10% of GDP during the Great Compression era to 20% of GDP today — that doesn’t sound very efficient, does it? 🙂 Not to mention the secondary harm (rot) of attracting many of the most able to the high paying — doing nothing productive — “industry.”
* * * * * *
I just did a sleep apnea related sleep study last night under Merit Sleep — highest, first tier outfit. Merit lost the MEDICARE contract to deliver supplies for CPAP machines (continuous positive air pressure — forces your airway to stay open when sleepy muscles relax and let the tongue fall back in the airway in my case) like masks, hoses, rubber nose pieces, to competitive bidding.
I had to call Medicare for a new supplier — Medicare info worked like a charm (think FedEx). They gave me three possible suppliers (to start with — that didn’t sound promising). The name of the first one I calles was Alfa spelled with an “f” (wondered about that :-]); was told that the rubber nose pieces were handled by the boss who wouldn’t be in for about two weeks. The second firm’s robo answer began with some kind of digital quiz you were supposed to go through to determine if you were eligible for some kind of special offer — when I skipped over the questionnaire I was told I was not eligible for the offer (or whatever) and cut off.
Finally I found a place that I could order from straight forward; they had it in stock — only they didn’t ship (!); you had to drive down (over 7 miles!) to get it. When I got there they wanted me to sign a receipt that listed every possible supply for my machine — but only the price for the two (I would only have ordered one) nose pieces was included the final tally. Why list everything else on the receipt? The employee (owner?) circled the nose piece price and tally numbers for me — I crossed out and initialed everything else. For some odd reason the nose piece prices had been written over white out. ???
Wonder if I got three more suppliers from the “Medicare Durable Medical Equipment Competitive Bidding Program” what kind of adventures I would be going on?
PS. My sleep study technician told me (she is a knowledgeable professional) she tried to get her brother on Obamacare (or whatever she called it) and they made a mistake and he was supposed to be covered in February but he wasn’t — and she has spent 20 hours on the phone trying to straighten it out but so far hasn’t been able to.
Elizabeth Warren for president! — even if she doesn’t want to; if only to push our Democratic deck chair rearrangers some ways to the left.
Today’s NY Times has an article, “$80 Million for 6 Weeks for Cable Chief” by David Gelles, that is of interest for two reasons. The first is straight forward, it discusses outsized severance for CEOs when a corporate combination takes place. The second is in what is not said. Read through the article. What’s missing? The first paragraph makes the omission starkly clear. Who’s in charge of a public corporation? Who decides the best interest of the share holders of a public corporation? From the Times article you would think that only the CEO has those responsibilities.
Strange that this article regarding corporate executive compensation and corporate mergers or acquisitions makes no mention of a Board of Directors or the Board’s Chairperson. Note the opening paragraph, “Robert D. Marcus became chief executive of Time Warner Cable at the start of the year. Less than two months later, he agreed to sell the company to its largest rival, Comcast, for $45 billion.”
When did the CEO of a corporation become the determinant of such a transaction? How does an article about corporate governance not include a single reference to the Board of Directors and its responsibilities to the share holders?
Jack,
CROSS-POSTED FROM CAROLA BINDER’S POST TO BRAD DELONG’S (lazy, lazy me; hey, I’m 70 now) — Piketty, I have have read, sees world-wide confiscatory (my word) taxation as a necessary component of undoing mushrooming income inequality — I’m reading the book now (which means a month for me).
One almost always unmentioned aspect of the post WWII “Great Compression” is confiscatory taxation. I am only becoming aware of this as a possible NECESSITY recently. I always thought it would be harmless (CEOs and baseball players and
TV news anchors will work just as hard for what they USED TO earn — or we’ll find someone who will!) and just sort of nice if we ever get around to it. But, I am beginning to understand that constant leveling down may be an essential ingredient of real democracy.
The best argument for confiscatory taxation — both income and estate — is that it went on for decades after the war WITHOUT ANYBODY THINKING ABOUT IT — IOW, with no conscious ideological support. Nobody (but maybe the taxed — and maybe not them) was railing against any tradeoffs — presumably because there wasn’t any noticeable harm. PS. 5 star Republican President Eisenhower was fine with it.
[Come to think; my first job in downtown NYC in 1962 was as a pageboy in the executive offices of Nation Dairy Corporation (the GM of the dairy industry) in just another office building on Madison around 40th Street. The CEO rode the same elevator as everyone else and his office door was right off the elevator behind his secretary. I worked one floor down outside the treasurer’s office — same basic setup — who I remember for his scatological jokes in the same bathroom everyone else used.]
i would guess that the most beneficial aspect of very high tax rates on the very top margins would have the effect of reducing absurd compensation agreements. There would be little value to a $10 million annual if $9.5 million of it were taxed at or above 75%. Of course it would also require a tax structure that eliminated spurious tax planning schemes.
Timothy Egan joins the chorus of those dismayed by Nate Silver’s new FiveThirtyEight. I sorry, but I have to agree: so far it looks like something between a disappointment and a disaster.
But I’d argue that many of the critics are getting the problem wrong. It’s not the reliance on data; numbers can be good, and can even be revelatory. But data never tell a story on their own. They need to be viewed through the lens of some kind of model, and it’s very important to do your best to get a good model. And that usually means turning to experts in whatever field you’re addressing.
Unfortunately, Silver seems to have taken the wrong lesson from his election-forecasting success. In that case, he pitted his statistical approach against campaign-narrative pundits, who turned out to know approximately nothing. What he seems to have concluded is that there are no experts anywhere, that a smart data analyst can and should ignore all that.
But not all fields are like that — in fact, even political analysis isn’t like that, if you talk to political scientists instead of political reporters. So, for example, before glancing at some correlation and asserting causation, you really should talk to the researchers.
Similarly, climate science has been developed by many careful researchers who are every bit as good at data analysis as Silver, and know the physics too, so ignoring them and hiring a known irresponsible skeptic to cover the field is a very good way to discredit your enterprise. Economists work hard on the data; on the whole you’re going to do better by tracking their research than by trying to roll your own, and you should be very wary if your analysis runs counter to what a lot of professionals say.
Basically, it looks as if Silver is working from the premise that the supposed experts in every field are just like the political analysts at Politico, and that there is no real expertise he needs to take on board. If he doesn’t change that premise, his enterprise is going to run aground very fast.
Couple of thoughts:
The only justification that today’s Wall Street can make for its economic existence is that it provides some kind of efficiency in allocation of investing. First — most obvious — question might be whether a hedge fund manager can possibly provide so much extra allocation efficiency as to be personally worth a billion dollars a year for his “service” to the economy? Second — most damning — observation is that today’s Wall Street casino (using Wall Street as cover for the financial industry all across the country) has resulted in finance (A.K.A., PAPER WORK) growing from 10% of GDP during the Great Compression era to 20% of GDP today — that doesn’t sound very efficient, does it? 🙂 Not to mention the secondary harm (rot) of attracting many of the most able to the high paying — doing nothing productive — “industry.”
* * * * * *
I just did a sleep apnea related sleep study last night under Merit Sleep — highest, first tier outfit. Merit lost the MEDICARE contract to deliver supplies for CPAP machines (continuous positive air pressure — forces your airway to stay open when sleepy muscles relax and let the tongue fall back in the airway in my case) like masks, hoses, rubber nose pieces, to competitive bidding.
I had to call Medicare for a new supplier — Medicare info worked like a charm (think FedEx). They gave me three possible suppliers (to start with — that didn’t sound promising). The name of the first one I calles was Alfa spelled with an “f” (wondered about that :-]); was told that the rubber nose pieces were handled by the boss who wouldn’t be in for about two weeks. The second firm’s robo answer began with some kind of digital quiz you were supposed to go through to determine if you were eligible for some kind of special offer — when I skipped over the questionnaire I was told I was not eligible for the offer (or whatever) and cut off.
Finally I found a place that I could order from straight forward; they had it in stock — only they didn’t ship (!); you had to drive down (over 7 miles!) to get it. When I got there they wanted me to sign a receipt that listed every possible supply for my machine — but only the price for the two (I would only have ordered one) nose pieces was included the final tally. Why list everything else on the receipt? The employee (owner?) circled the nose piece price and tally numbers for me — I crossed out and initialed everything else. For some odd reason the nose piece prices had been written over white out. ???
Wonder if I got three more suppliers from the “Medicare Durable Medical Equipment Competitive Bidding Program” what kind of adventures I would be going on?
PS. My sleep study technician told me (she is a knowledgeable professional) she tried to get her brother on Obamacare (or whatever she called it) and they made a mistake and he was supposed to be covered in February but he wasn’t — and she has spent 20 hours on the phone trying to straighten it out but so far hasn’t been able to.
Elizabeth Warren for president! — even if she doesn’t want to; if only to push our Democratic deck chair rearrangers some ways to the left.
Today’s NY Times has an article, “$80 Million for 6 Weeks for Cable Chief” by David Gelles, that is of interest for two reasons. The first is straight forward, it discusses outsized severance for CEOs when a corporate combination takes place. The second is in what is not said. Read through the article. What’s missing? The first paragraph makes the omission starkly clear. Who’s in charge of a public corporation? Who decides the best interest of the share holders of a public corporation? From the Times article you would think that only the CEO has those responsibilities.
Strange that this article regarding corporate executive compensation and corporate mergers or acquisitions makes no mention of a Board of Directors or the Board’s Chairperson. Note the opening paragraph, “Robert D. Marcus became chief executive of Time Warner Cable at the start of the year. Less than two months later, he agreed to sell the company to its largest rival, Comcast, for $45 billion.”
When did the CEO of a corporation become the determinant of such a transaction? How does an article about corporate governance not include a single reference to the Board of Directors and its responsibilities to the share holders?
Jack,
CROSS-POSTED FROM CAROLA BINDER’S POST TO BRAD DELONG’S (lazy, lazy me; hey, I’m 70 now) — Piketty, I have have read, sees world-wide confiscatory (my word) taxation as a necessary component of undoing mushrooming income inequality — I’m reading the book now (which means a month for me).
One almost always unmentioned aspect of the post WWII “Great Compression” is confiscatory taxation. I am only becoming aware of this as a possible NECESSITY recently. I always thought it would be harmless (CEOs and baseball players and
TV news anchors will work just as hard for what they USED TO earn — or we’ll find someone who will!) and just sort of nice if we ever get around to it. But, I am beginning to understand that constant leveling down may be an essential ingredient of real democracy.
The best argument for confiscatory taxation — both income and estate — is that it went on for decades after the war WITHOUT ANYBODY THINKING ABOUT IT — IOW, with no conscious ideological support. Nobody (but maybe the taxed — and maybe not them) was railing against any tradeoffs — presumably because there wasn’t any noticeable harm. PS. 5 star Republican President Eisenhower was fine with it.
[Come to think; my first job in downtown NYC in 1962 was as a pageboy in the executive offices of Nation Dairy Corporation (the GM of the dairy industry) in just another office building on Madison around 40th Street. The CEO rode the same elevator as everyone else and his office door was right off the elevator behind his secretary. I worked one floor down outside the treasurer’s office — same basic setup — who I remember for his scatological jokes in the same bathroom everyone else used.]
i would guess that the most beneficial aspect of very high tax rates on the very top margins would have the effect of reducing absurd compensation agreements. There would be little value to a $10 million annual if $9.5 million of it were taxed at or above 75%. Of course it would also require a tax structure that eliminated spurious tax planning schemes.
Timothy Egan joins the chorus of those dismayed by Nate Silver’s new FiveThirtyEight. I sorry, but I have to agree: so far it looks like something between a disappointment and a disaster.
But I’d argue that many of the critics are getting the problem wrong. It’s not the reliance on data; numbers can be good, and can even be revelatory. But data never tell a story on their own. They need to be viewed through the lens of some kind of model, and it’s very important to do your best to get a good model. And that usually means turning to experts in whatever field you’re addressing.
Unfortunately, Silver seems to have taken the wrong lesson from his election-forecasting success. In that case, he pitted his statistical approach against campaign-narrative pundits, who turned out to know approximately nothing. What he seems to have concluded is that there are no experts anywhere, that a smart data analyst can and should ignore all that.
But not all fields are like that — in fact, even political analysis isn’t like that, if you talk to political scientists instead of political reporters. So, for example, before glancing at some correlation and asserting causation, you really should talk to the researchers.
Similarly, climate science has been developed by many careful researchers who are every bit as good at data analysis as Silver, and know the physics too, so ignoring them and hiring a known irresponsible skeptic to cover the field is a very good way to discredit your enterprise. Economists work hard on the data; on the whole you’re going to do better by tracking their research than by trying to roll your own, and you should be very wary if your analysis runs counter to what a lot of professionals say.
Basically, it looks as if Silver is working from the premise that the supposed experts in every field are just like the political analysts at Politico, and that there is no real expertise he needs to take on board. If he doesn’t change that premise, his enterprise is going to run aground very fast.
http://krugman.blogs.nytimes.com/2014/03/23/tarnished-silver/