When I was a junior, I had to take Contemporary Civilization with Professor Malefakis. Evil Twin #2 and I used to joke around that his name sounded evil. (Mal = Bad) Truth be told, he was an ass. He was the worst kind of bully, as he knew every possible way to get under the skin of his students. He called people names. He made one girl cry. He made one boy want to punch his face. He even tried to weird out Evil Twin #2 by asking her if she wanted a penis, when discussing Freud. Evil Twin #2, having not said more than five words all semester, was caught off guard, which is exactly what this guy wanted.
Every class he would draw a nonsensical diagram of the thought of the day. A switchback funnel was a diagram of political ideologies. Sticks was a Hobbesian view on a society. If you discount my weirdly eidetic memory for lectures, one diagram stood above the rest. It was a bunch of rectangles and the need to get rid of feudalism. The fundamental idea was this: the consolidation of goods under the control of a few makes little room for the exchange of goods, and the lack of movement of people throughout the society.
I think Malefakis and I have a lot in common. I draw terrible pictures and cannot always convey what I am thinking to those around me. My friend, who is against the Occupy movement, has been particularly snarky about it, so I desperately have been trying to explain why I think they have a point. But I might as well be drawing a bunch of rectangles for all she cares. Most statuses on Facebook have been "Occupy my bed" or "Occupy France." However, like Malefakis, I will be oblivious to the naysayers continue to spew my ideas.
Fundamentally, I love the idea of Wall Street. A company or a person with a great idea, product, or service, sells shares of itself. The company gets increased capital and they get to expand and sell their widgets to a broader audience. Fabulous.
Somehow this beautiful thing went off the rails. Only a fraction of the companies listed in the NYSE participate in giving investors dividends. At some point, all stocks became entirely based on its potential to grow. According to Morning Star, a company that is in the red but has the potential to be 4 times bigger in 2 years is worth more than one that will have a steady profit margin of 17% every year. For a company to even stay afloat in the stock market, they have to do something extraordinary every quarter. Stock prices seem to fluctuate more on rumor than fact. Also, this phenomenon meant short term solutions started having a large impact. Google can shift one of its headquarters to Ireland and for those first few quarters profits went up immensely. This increase was not a result of making a better search engine, but finding a loopholes in existing rules.
But what is the true added value for all these things? Does the actuary, who discovers they can move all their jobs to India and save the company 20% truly add value? The new class of CEOs remind me a lot of the corporate raiders of the 80's. Does that add value? According to Wall Street right now, the answer is yes. The bottom line is those changes made the company more profitable for a few quarters. Our excuse is they deserved it for being clever and ruthless. Really? We are now rewarding people for excessive greed and short-sightedness. And that does not create a better environment for innovation, which I propose is the true value we are all seeking.
But let's take a more Machiavellian approach to this problem. Not everyone can be immensely rich, nor is it bad to be immensely rich. No one wants to squash that drive and ambition. By keeping the disparity between wealthy and the rest of the population to a manageable limit, the wealthy can still enjoy their moneys without a bunch of un-showered protesters. Listen, let's aim to be more German than Greek. Just sayin'.
This morning, I went down to Occupy San Diego. The participants looked homeless. They were a lot punk kids talking about how disillusioned they were. They seemed lazy and obnoxious. I brought coffee and donuts, as it was cold and foggy today. They were totally ungrateful. But here is the biggest lesson I learned. Sometimes the biggest assholes, like Malefakis and the protesters, have a point. Wall street sucks right now, and something has to change.
I am Evil Twin #1, and I am part of the 99%.
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