In The USA: the Next Revolution

[JarodParker]

I feel compelled to respond since I was named in your post.

2. There is no evidence whatsoever that credit agencies improperly rated any MBS derived from subprime origination. Bill and Jarod confuse MBS rating with CDO rating.

The senate investigations clearly states that both were improperly rated. Here's a link to a press release summary. And the actual 600+pg report.

1) Inaccurate Rating Models. From 2004 to 2007, Moody’s and Standard & Poor’s used credit rating models with data that was inadequate to predict how high risk residential mortgages, such as subprime, interest only, and option adjustable rate mortgages, would perform.

2) Competitive Pressures. Competitive pressures, including the drive for market share and need to accommodate investment bankers bringing in business, affected the credit ratings issued by Moody’s and Standard & Poor’s.

3) Failure to Re-evaluate. By 2006, Moody’s and Standard & Poor’s knew their ratings of residential mortgage backed securities (RMBS) and collateralized debt obligations (CDOs) were inaccurate, revised their rating models to produce more accurate ratings, but then failed to use the revised model to re-evaluate existing RMBS and CDO securities, delaying thousands of rating downgrades and allowing those securities to carry inflated ratings that could mislead investors.

4) Failure to Factor In Fraud, Laxity, or Housing Bubble. From 2004 to 2007, Moody’s and Standard & Poor’s knew of increased credit risks due to mortgage fraud, lax underwriting standards, and unsustainable housing price appreciation, but failed adequately to incorporate those factors into their credit rating models.

5) Inadequate Resources. Despite record profits from 2004 to 2007, Moody’s and Standard & Poor’s failed to assign sufficient resources to adequately rate new products and test the accuracy of existing ratings.

Inaccurate AAA credit ratings introduced risk into the U.S. financial system and constituted a key cause of the financial crisis.

[JarodParker]

Somehow I can't convince myself that the economic problems in the US come down to insufficient regulation. Possibly this comes a bit from my 3rd world perspective, but the American populace at large seems to me less exploited than soft, pampered, overprotected, overentitled. Individually and institutionally, Americans seem to have forgotten that they need to compete. Reducing executive salaries or regulating deal-making isn't going to change that.

When asked about the corruption in his country, an Afghan once commented that their politicians were no more crooked than US politicians. The difference was that US politicians had found ways to legalize their corruption.
The American people get exploited enough even with all the regulation and protection. That's not to say that there aren't over regulated areas where the legislative fat need to be trimmed.
Reducing executive salaries will definitely go a long way in making the country more competitive. More money for share holders to re-invest, R&D, operations, etc. I also believe re-balancing the pay gap between employees and executives will make employees more productive. Now I'm not sure how this all would be done or even if the government should be involved but it needs to happen.
I agree with you in that there's a strong sense of entitlement in the US (from students, employees, executives and politicians) but hopefully that will be one of the things that gets adjusted as a result of the crisis.

As an investor, if you're holding shares in a company you don't think is managed well, you have two options. One is to go to a shareholder's meeting and make your opinion known, which is realistically pretty pointless. Another is to pull your money out and put it somewhere you think is better... no shortage of options. Demanding that the government do something about it... why bother, really?

For a long time I was frustrated by the futility of option1 especially for retail investors. Even the big mutual funds are impotent. That's why I took option2 and voted with my feet. But even then the stock market as well as the overall national and global economies can still be taken hostage by these institution. And that's why stricter regulation is necessary.

Again, this is admittedly from a 3rd world perspective, but the idea of a nurse or a cop making 100k+ a year makes the rage seem a bit superfluous. Have you any idea what people in most of the world think of that? Or of the idea of a country where people statistically classified as "poor" own cars, refrigerators, TV sets, etc...

Yea, most people would like to have a piece of it whether through immigration or by developing their nation.
But you also have to keep in mind things like cost of living. Just a couple of years ago, the starting salary of a rookie cop in SF was $70,000 but you need like a gajillion dollars to rent a tiny apartment there. Somebody making $10,000/year which is well below the US poverty line can live like a king in most places around the world. In fact that person is in the top 13% globally (Calculator). But that stat is meaningless when you have to live in the US.
And usually when you pay your cops well they tend to not do things like take bribes. When armies are paid reasonable wages, they have one less reason to mutiny, etc. At one time, FBI agents in NY used to qualify for food stamps and a return to those days would probably be a bad idea in terms of national security.

They also aren't hurting because executives are overpaid, or even because of "Wall Street", or "the bankers". Not that part of the responsibility doesn't lie there, but it's only part, and you don't get a clear handle of the problem without looking at the other parts.

I agree with you in that "wall street" and "bankers" are only part of the problem. And not everyone on "wall street" and not all "bankers" are part of the problem. But the system needs an overhaul and that's what I think the protestors are asking for.

Bill Moore expressed my sentiments in better ways than I can ever hope to...

... America will continue to be great as long as its people continue to be great... While I can't mathematically prove that base line character of our people, or at least many of those leading major corporations, has declined, it seems to be the case (that also includes the character of those who expect hand outs, so it is not limited to one end of the spectrum). There are numerous examples throughout history of corrupt, self-centered, shortsighted business leaders, but now due to the consolidation of the financial sector it is easier to be the norm, because the market no longer controls their behavior. They can collaborate to protect common interests and act together instead of truly competing. That is only a suspicion, but some business analysts believe it is happening.

I think an argument could be made that this same type of dishonesty is also prevalent in the U.S. Government... The take away is that our current cultural norm of white washing problems away with lies prevents us from solving them. In response, and rightfully so, the people have rose up to challenge the madness, whether they belong to the Tea Party, the 99%, or just individually are fed up. Getting back to the topic of this thread the next American Revolution is unfolding.

[Dayuhan]

Reducing executive salaries will definitely go a long way in making the country more competitive. More money for share holders to re-invest, R&D, operations, etc.

You'd think so, but it generally doesn't work out that way. When you work out the actual money paid to the very small number of executives, per company, cutting it by half or two thirds would give you but a drop in the bucket. The actual impact on the Company's balance sheet or operations would be pretty minimal.

For a long time I was frustrated by the futility of option1 especially for retail investors. Even the big mutual funds are impotent. That's why I took option2 and voted with my feet. But even then the stock market as well as the overall national and global economies can still be taken hostage by these institution. And that's why stricter regulation is necessary.

I didn't mean to suggest that dissatisfied investors should take money out of the markets, but that they should shift it to companies they feel are better managed. There are thousands of options, many of which (the ones you never read about in the news) are just doing business and getting on with it.

Institutional investors (mutual funds, pension funds, etc) aren't exactly impotent. They don't apply their leverage by voting at shareholder meetings or trying to change management, because they recognize that they haven't the expertise and they'd rather not bother trying to get it. If they don't like the results a company is getting, they don't try to change management, they sell the shares and buy something else.

I think a lot of the less savory trends in modern corporate management were actually boosted by the rise of individual retail investors in the mid 90s. Before then almost everybody invested through institutions. The institutions were a lot more patient: they were well diversified and had a longer horizon. The analysts who advised them actually understood the businesses, read every word of the SEC filings. They were less concerned with quarterly results than with medium to long term company and industry trends.

When the boom in individual investment hit a lot of that changed. The guys who were trading on their own didn't read a 10Q, they just looked straight to the revenues and EPS. They were impatient. They didn't want to hit singles, they wanted home runs. By 98 or 99 even home runs weren't good enough, they wanted grand slams. They weren't huge, but there were lots of them, and they traded a lot, way more than most institutions. Executives were under a whole lot of pressure to deliver short term results... those that did got big rewards, those that didn't got the axe. Don't just look at how much they are paid, look at how executive turnover has spiked up and tenure has dropped. Company has 2 bad quarters, shares are diving, have to show the investors something... show them the head of the CEO and spend big bucks to bring in some new star who's going to turn everything around.

The whole 90s psychosis, the trade-it-yourself attitude and the perception of investing as a way to make the one killer deal that will set you up forever, rather than a way to gradually build value over a period of time... it's had a really nasty impact on the financial scene, and a lot of people who weren't watching in those days don't realize the extent to which it was driven from the bottom up. I remember in those days discussing "the barber rule": if your barber is talking to you about dot com IPOs (or, in retrospect, real estate deals) it's time to sell everything quick.

I can think of no more consummately boring field of study than "modern portfolio theory" - the prevailing wisdom in the financial word circa 1990 - but these days we could use a bit more of it. Of course now we'd have to call it ancient portfolio theory.

But you also have to keep in mind things like cost of living. Just a couple of years ago, the starting salary of a rookie cop in SF was $70,000 but you need like a gajillion dollars to rent a tiny apartment there. Somebody making $10,000/year which is well below the US poverty line can live like a king in most places around the world. In fact that person is in the top 13% globally (Calculator). But that stat is meaningless when you have to live in the US.

You also have to keep in mind the quite exorbitant standard of what Americans call "living". It's probably not so obvious to people who are there all the time, but it's just flat out shocking when you live outside and you go back once in a while to visit. It's one of the things that doesn't add up to me. Everyone talks about how much worse off Americans are, but to someone who left in the late 70s the amount of stuff, the level of luxury, the stuff Americans take for granted is absolutely astounding.

A wee illustrative anecdote:

There's an American couple that spends a third of the year in my little town, a third in India, a third in the US. They're retired teachers, living very frugally; "aging hippies" would not be an unreasonable description. They pulled in from the US a few weeks ago. Les told me that he'd taken a Greyhound bus (not a place where you meet the upper class) from Idaho to Mississippi to see relatives. He recounted with complete astonishment that every seat on the bus had an electrical outlet, the bus was wi-fi enabled, and that practically everyone on the bus was logged in on one gadget or another. Terri, his wife, who is a bit earthy by nature, interjected something like "and every one of them was on Facebook whining about being oppressed and exploited".

Anecdotal evidence, to be sure... but I wonder how many of America's enraged realize what the system they loathe has done for them, and how much they've actually got. I see it all the time in my extreme sport buddies... visiting kayakers, young guys, basically cool but very much of the idealistic left, speaking of the exploitive system and how they're among the oppressed masses while bopping around the world with thousands of dollars in high-tech gear... just for the fun of it. Of course I don't say a word, but the incongruity of it does stick out just a bit.

I don't hate the OWS protestors, I just think they're pretty much irrelevant. They barely know what they're against and they haven't a clue about what they're for, beyond a lame litany of left mantras. They demonstrate no understanding of the problems for which they demand solutions, and they've no idea what solutions they want... not all that different from a cute appealing baby wailing for his teat.

We all have an issue, usually several... but I see no point in listening to people who can't be bothered to learn something about the issue and articulate reasonable solutions.

Nobody has "the solution". There isn't one. Solutions emerge through discussion and conflict among people who have varied opinions, all of them reasonable and well informed. Unfortunately that debate gets drowned out by the pointless polarized partisan shrieking.

[JarodParker]

Originally Posted by JarodParker View Post
Reducing executive salaries will definitely go a long way in making the country more competitive. More money for share holders to re-invest, R&D, operations, etc.

You'd think so, but it generally doesn't work out that way. When you work out the actual money paid to the very small number of executives, per company, cutting it by half or two thirds would give you but a drop in the bucket. The actual impact on the Company's balance sheet or operations would be pretty minimal.

We're gonna have to agree to disagree on this one. I think executives are being compensated in disproportionate amounts relative to their contributions, at the cost of investors and employees. Banks were and still are setting aside 50%+ of their revenue for bonuses with a majority going to top management.

Here's an interesting chart about the CEO/employee pay gap...

According to the EPI figures, the average CEO received $8,917,000 in compensation in 2009, while the average production worker got $48,130.

That is a ratio of 185.3 which has ballooned by more than 7 times since the 1965 ratio of 24.2. I really don't see anything that justifies such an increase. According to the Military Pay chart for 2012 (which I hope I'm reading right) an E1 with less than 4-months of service gets $1,379/month while a four-star general with 38-years of service makes $19,239/month. That's a ratio of 13.95. Even if you factor in things like BAH/BAS, I don't think the ratio will go past 20. Now, I don't expect Corporate America to adopt an "officers eat last" mentality and narrow the gap to such levels but they should at least eat together.

Originally Posted by JarodParker View Post
For a long time I was frustrated by the futility of option1 especially for retail investors. Even the big mutual funds are impotent. That's why I took option2 and voted with my feet. But even then the stock market as well as the overall national and global economies can still be taken hostage by these institution. And that's why stricter regulation is necessary.

I didn't mean to suggest that dissatisfied investors should take money out of the markets, but that they should shift it to companies they feel are better managed. There are thousands of options, many of which (the ones you never read about in the news) are just doing business and getting on with it.

I think you misunderstood my statement. I was agreeing with you that one should find other companies to invest in.

You also have to keep in mind the quite exorbitant standard of what Americans call "living". It's probably not so obvious to people who are there all the time, but it's just flat out shocking when you live outside and you go back once in a while to visit. It's one of the things that doesn't add up to me. Everyone talks about how much worse off Americans are, but to someone who left in the late 70s the amount of stuff, the level of luxury, the stuff Americans take for granted is absolutely astounding.

I assure you I'm aware how the other half lives as I've spent quite a bit of time in East Africa. It is what it is. The American middle class cannot downsize to a Thai standard of living, just like Thais wouldn't want to live at Somalia's standard of living. Everyone wants to be upward mobile. Otherwise the CEO's would forgo the high pay, bonuses and everything that comes along with it and just live like their employees. Just because somebody somewhere around the world is doing worse than you doesn't mean that you don't have a legitimate gripe.
It's also the American way to speak up against perceived injustice. The abuses Asians, Africans, Arabs etc accept by saying things like "insh Allah", Americans would never stand for. That's why our official motto should've been "Don't Tread On Me."

[Dayuhan]

Banks were and still are setting aside 50%+ of their revenue for bonuses with a majority going to top management.

Source on that? Seems unlikely.

I really don't see anything that justifies such an increase.

How much of that is actual cash paid by the company, how much is stock options... and how are the stock options valued? n Break the actual cash component down and compare it to the overall company budget and it stops looking so big.

Neither executives nor workers are paid according to anyone's perceptions of how productive they are or how much they "deserve". A rather strange cult of the celebrity CEO has emerged, with companies competing to get "stars" whose record will impress the shareholders. It's almost like rock star or athlete pay in that sense. You've also got a trend of CEOs not lasting long... a few bad quarters and they get the sack, a few good quarters and they want to trade that "success" into a big package elsewhere... likely as a replacement for the guy who got the sack. Again, it's up to the boards of directors and the shareholders to change that, if indeed they want to. Not a terribly positive trend IMO but I really don't see what to do about it that wouldn't be worse.

I assure you I'm aware how the other half lives as I've spent quite a bit of time in East Africa. It is what it is. The American middle class cannot downsize to a Filipino standard of living, just like Filipinos wouldn't want to live like Somalis. Everyone wants to be upward mobile. Otherwise the CEO's would forgo the high pay, bonuses and everything that comes along with it and just live like their employees.

I didn't mean to compare the American middle class to Filipinos or Somalis, but to compare them to the American middle class of 30 years ago. Again, the change is only noticeable if you've been away a long time.

Of course Americans want to be upwardly mobile. I think the American habit of blaming the restrictions on their upward mobility on "wall street" generically, or on overpaid CEOs, or similar internal matters misses the point. The US walked out of WW2 with a staggering economic advantage. Every other industrial power in the world was shattered. Many powers and potential powers spent most of the next half-century either in the grip of a totally self-defeating economic system or being kicked around by the cold war. Americans didn't prosper because they were smarter or better or more efficient, they prospered because they had a huge head start.

The head start is gone. The rest of the world is in play, and they're hungry. That won't be changed by paying CEOs less or regulating banks more. It needs a retooling of American education and a completely new approach on all levels: that's on the part of small institutions and individuals and government as much as on the part of wall street and CEOs. Trying to lay the blame on the latter is satisfying (and advantageous to politicians who would rather have the electorate pissed off at wall street than at them) but it won't solve the problem.

[motorfirebox]

You'd think so, but it generally doesn't work out that way. When you work out the actual money paid to the very small number of executives, per company, cutting it by half or two thirds would give you but a drop in the bucket. The actual impact on the Company's balance sheet or operations would be pretty minimal.

I don't think the money saved from reducing executive pay is the point. The point is to realign pay with output. An executive who runs his corporation into the ground and costs hundreds of thousands of jobs should not get a bonus. Reducing the pay of an executive who fails that badly is not a goal in and of itself, it's a means to disincentivize that sort of failure and to incentivize, or reincentivize, success.

[slapout9]

Link to last nights 60 minutes interview of Jack Abramoff and how Rich People Infilltrate and Subvert the US Government....like the man says they own it!

http://www.cbsnews.com/video/watch/?...in;cbsCarousel

[Ken White]

And this differs from every other nation and era just how?

[Fuchs]

And this differs from every other nation and era just how?

Ken, the world isn't everywhere alike, nor everytime.

Many countries have had phases in which the influence of the upper class got thoroughly demolished (even though usually it was either rebuilt or a new upper class created).

There are also countries in which the rich haven't so much influence even in normal times.
I don't claim that the rich have no above-average influence in these countries, but they certainly don't "own" the government/state in Switzerland or Scandinavian countries.

[Dayuhan]

If I had to choose among having the country owned by the tea party, the OWS protestors, and the rich... I think I'd go for the rich. Least of 3 evils. t least they've a clue how it works.

I don't think the money saved from reducing executive pay is the point. The point is to realign pay with output. An executive who runs his corporation into the ground and costs hundreds of thousands of jobs should not get a bonus. Reducing the pay of an executive who fails that badly is not a goal in and of itself, it's a means to disincentivize that sort of failure and to incentivize, or reincentivize, success.

An executive that cost hundreds of thousands of jobs? Where do you find one of those.

Who do you want to do the realigning? The government? We're talking about a miniscule minority of corporations anyway, so your overall impact on the economy is likely to be close to zero. Of course if you buy into the nonsense that "the banks" caused the crisis, it might look like there's sense in it... but lots of things look sensible if you buy into nonsense. They just don't seem to work out sensibly in practice.

Hasn't it ever struck you how eager politicians are to ride a bubble, cultivate it, urge its expansion, take credit for the pleasures of the upside... think of the Clintonites boasting of their balanced budget, the low unemployment, the soaring stock market, or the Bushies and their record home ownership rates... then when the bubble bursts it's all somebody else's fault? Doesn't that tell you something?

[Fuchs]

An executive that cost hundreds of thousands of jobs? Where do you find one of those.

I'd look at Goldman Sachs.

There are plenty CEOs who wasted ten thousands of good jobs, too.

[motorfirebox]

If I had to choose among having the country owned by the tea party, the OWS protestors, and the rich... I think I'd go for the rich. Least of 3 evils. t least they've a clue how it works.

I don't think I'd pick any of them. As much as I support OWS, there are large parts of the movement that go way too far. I wouldn't pick the Tea Party because I have a number of Mexican friends and because I think it's pretty silly to pay down your debts when you can't put food on the table. And I wouldn't pick the rich because I'm not particularly pleased with the job they've been doing thus far. If I absolutely had to choose... I suppose I'd go with OWS, mainly because I side with them on social issues. I think OWS is in the right place, directing anger at the right people, but I have doubts that any good solution is going to come from the movement directly.

An executive that cost hundreds of thousands of jobs? Where do you find one of those.

With almost 8 million jobs lost to the crisis, I don't think you'd have to look very hard.

Who do you want to do the realigning? The government? We're talking about a miniscule minority of corporations anyway, so your overall impact on the economy is likely to be close to zero. Of course if you buy into the nonsense that "the banks" caused the crisis, it might look like there's sense in it... but lots of things look sensible if you buy into nonsense. They just don't seem to work out sensibly in practice.

Of course I buy into the idea that the corporations who offered loans they knew would not be repaid, then lied about the value of those loans in order to sell them to investors, caused the crisis. I honestly didn't think that was up for debate.

Hasn't it ever struck you how eager politicians are to ride a bubble, cultivate it, urge its expansion, take credit for the pleasures of the upside... think of the Clintonites boasting of their balanced budget, the low unemployment, the soaring stock market, or the Bushies and their record home ownership rates... then when the bubble bursts it's all somebody else's fault? Doesn't that tell you something?

It tells me we need to vote out incumbents on both sides of the aisle. Beyond that, I don't really see anything to choose from between the behavior of politicians and the behavior of corporate officers.

[Dayuhan]

I suppose I'd go with OWS, mainly because I side with them on social issues. I think OWS is in the right place, directing anger at the right people, but I have doubts that any good solution is going to come from the movement directly.

I don't think they have a clue, and they're directing all of the anger at 1/3 of the problem. They also have no idea what they want, beyond a vague laundry list of left mantras. Certainly not likely that any good solution will emerge from there... to the extent that the Democratic arty feels they have to pander to them in the same way that the Republicans feel they have to pander to the tea party, they could actually increase the polarization that'x creating so much of the trouble... as usual, good solutions won't come from the extremes.

With almost 8 million jobs lost to the crisis, I don't think you'd have to look very hard...

Of course I buy into the idea that the corporations who offered loans they knew would not be repaid, then lied about the value of those loans in order to sell them to investors, caused the crisis. I honestly didn't think that was up for debate.

Surely you don't think that's all there was to it, or that these events emerged from some sort of vacuum...

It tells me we need to vote out incumbents on both sides of the aisle. Beyond that, I don't really see anything to choose from between the behavior of politicians and the behavior of corporate officers.

What makes you think the new incumbents are going to be any better, as long as Americans keep voting for whoever's best at propping up scapegoats and doling out feelgood promises? That includes people like OWS and the tea party... it's all their fault, get them under control and everything will be ok...

[Presley Cannady]

An executive who runs his corporation into the ground and costs hundreds of thousands of jobs should not get a bonus.

Why not? It's the company's money. And why should a bunch of crappy workers get a cut?

[motorfirebox]

Edit: never mind. I don't see the point in engaging with such an obvious troll.

[Presley Cannady]

Edit: never mind. I don't see the point in engaging with such an obvious troll.

I imagine you were going to extol the virtues of the poor, weary worker laboring under the onerous incompetence of management. It's a remarkably self-serving story, isn't it?

[Steve Blair]

Why not? It's the company's money. And why should a bunch of crappy workers get a cut?

And why should a crappy manager get a cut simply because he/she is a manager? Just as not everything is not necessarily the fault of management, it can't all be laid at the feet of workers. Accountability should go both ways...but it quite often doesn't.

[Kiwigrunt]

It seems to me that this conversation is losing value rapidly due to the fact that ad hominems and generalisations are creeping in. Buttons pushed and stuff like that. I think that two main questions / themes are being blurred somewhat.
1). To what extent are some CEOs and other top players guilty of criminal conduct?
2). To what extent is a huge differentiation in income (something like 500 fold) morally / ethically / legally / economically / social fabrically / what-ever-ly, justifiable or useful or sustainable?

Me? I am a self employed builder. I guess that puts me at least pretty close to the crappy workers class.
I have no problems whatsoever with the fact that a brain surgeon pulls in more than I do. I’d be concerned if that was not the case. But how much above the median or mean should the top few be? An order of 5 to 10 or so, I’d have no issues with at all. An order of 20 to 50 or so….my eyebrows are starting to gravitate in a Northerly direction. An order of 500 or so…..I think that is beyond silly!

I don’t agree with all that John Rawls puts on the table, but I think me makes some good points. The reason the top few can achieve the levels they do is because of the existence of hordes of crappy workers. These form the physical backbone of the social fabric. That same social fabric that the top few can enjoy to extents that go way beyond their individual contribution and worth to that social fabric. The businesses that these CEOs in question lead, and to which they deliver their value, are also agents within this same social fabric. Any individual or business that puts him/her/itself (too far) above this social fabric is delusional. But they can afford to disassociate themselves, financially at least. Beyond that…..well, we’ll see what the future has in store.

[Presley Cannady]

And why should a crappy manager get a cut simply because he/she is a manager?

Why should a crappy worker get a severance package? Or his last paycheck? Or his last hourly wages? Short answer, because that's what both parties agreed to when they contracted with one another.

Just as not everything is not necessarily the fault of management, it can't all be laid at the feet of workers. Accountability should go both ways...but it quite often doesn't.

Except some folks seem to want more accountability going one way on top of that agreed to at the time of hire, for no better reason than the form and degree of compensation is way the hell out of their experience.

[Bill Moore]

Posts by Dayuhan,

Somehow I can't convince myself that the economic problems in the US come down to insufficient regulation. Possibly this comes a bit from my 3rd world perspective, but the American populace at large seems to me less exploited than soft, pampered, overprotected, overentitled. Individually and institutionally, Americans seem to have forgotten that they need to compete. Reducing executive salaries or regulating deal-making isn't going to change that.

That is the great myth we tend to perpetuate. First you can't accurately classify the American populace at large, but there is a large segment of our population that is far from soft. Both adults work to make ends meet (the reality is they choose a lifestyle that requires this). Many adults have two or more jobs and work well over 60 hours a week. That isn't the norm in most parts of the world. In many parts of the world people have a culture that still values quality of life as defined by time spent with family and friends, not how many toys one has. Is there a soft and over entitled element of our society? Obviously the answer is yes, but they don't define our society. Forgetting the need to compete? I think our inability to compete in some areas is due to government regulations and in some cases lack of government incentatives (some will decry this as socialism, but we're competing in a world where other countries enable their businesses to be competitive globally, if we don't we'll continue to lose jobs), and of course it is a fact that our public schools have failed at least three generations (again government policies driven by political corrrectness).

As an investor, if you're holding shares in a company you don't think is managed well, you have two options. One is to go to a shareholder's meeting and make your opinion known, which is realistically pretty pointless. Another is to pull your money out and put it somewhere you think is better... no shortage of options. Demanding that the government do something about it... why bother, really?

So you're making an argument that only the big boys with automated investing tools that move money from one stock to another based on algorithyms (which sure as hell isn't investing, its gambling) is O.K.? The individual investor should quit whinning and accept a 1-2% return on his savings to prepare for retirement? There is also a considerable lack of transparency due to the lack of oversight, which frankly I don't think can be fixed without forming a large government bureaucracy that will only make things worse. It can only be fixed by corporations and the financial sectors embracing business ethics as the norm, versus the exception.

Again, this is admittedly from a 3rd world perspective, but the idea of a nurse or a cop making 100k+ a year makes the rage seem a bit superfluous. Have you any idea what people in most of the world think of that? Or of the idea of a country where people statistically classified as "poor" own cars, refrigerators, TV sets, etc...

Having been to the Philippines many times over the past 30 years, we both know a $100,000.00 goes a lot further in there than in the U.S., so even comparing our situation to the Philippines is an exercise in futility. I sure as heck hope we don't think it is O.K. to allow our society to get reduced to that level. Of course poverty in Africa, South Asia, Latin America and Southeast Asia is much more extreme than it is in the U.S., so what? We built a better system that is now in danger of collapsing due to some structural issues, ethical issues, and a failure to adapt to modern realities. We have thousands of American families who are homeless now, and while you may not see that from your seat, I see them camping under highways, crammed into cheap hotel rooms, or just parked on the street living out of their car. Their kids will be trapped in the poverty cycle if we don't fix our schools, and then soon enough we'll be able to draw parallels between the Philippines and the U.S. which will be pretty darn sad if we let this happen.

They also aren't hurting because executives are overpaid, or even because of "Wall Street", or "the bankers". Not that part of the responsibility doesn't lie there, but it's only part, and you don't get a clear handle of the problem without looking at the other parts.

You're wrong about this, it goes back to the culture of corruption where CEOs are rewarding for non-performance and those who had value to the company are punished with salary reductions or layoffs to increase the bottom line. I have listened to numerous interviews with CEOs, and some of them are quite frank about this. One example was a furniture company in NC that is doing well, but due to the challenging times everyone including the CEO agreed to pay reductions. The CEO is loyal to his employees and shares the profits and losses. They interviewed another CEO about how he is doing business, and he said if he could run the company he would lay off up to 30% of the work force so he could increase the profit margin and drive up the stock price, making money is the name of game. There was at least one study that stated these CEOs who get hired to reduce costs (reduce the workforce) to increase the bottom line were effective in the short term, but over the long term (and they never stayed for more than 3 years) the Company actually produced less value because the work force was decimated. Technology also plays a role, but it isn't just technology that is leading to these layoffs. It is about the big dogs who own 51% or more of company's stock that are driving these decisions. Does this system really serve America's best interests?