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Other People’s Money
Nil nisi bonum and all that, but when I read of the passing of Senator Robert Byrd all I could think was, “There goes one of the GREAT spenders of other people’s money of all time.” Possibly the greatest ever — is there a Guinness record for this?
And this brought to mind another observation: One of the great gulfs in the modern developed world is that between people who have to make do on what they earn or accumulate themselves — their own money — and those who derive their power or wealth from making use of other people’s money. The latter increasingly view themselves as the “elite;” the former, whether part-time fry-cooks or well-to-do neurosurgeons, are the “other people.” Politicians accumulate power and influence by spending other people’s money; i-bankers, hedge fund managers, and the like accumulate wealth by taking risks with other people’s money. No wonder they’re so cozy. I think you could take a good deal of what’s happened over the past 12-18 months — the Tea Party, the anger at Wall Street, the political upsets — and call it the Revolt of the “Other People.”
Published in General
May I offer a heartfelt word of thanks to Mr. Manacek? My thoughts on the death of Sen. Robert Byrd were precisely his–but I didn’t have the guts to say so until I read his post.
Ricochet Quote of the Week.
My gut reaction to the death of Senator Byrd was to wonder why Americans are alright with any politician “serving” for 50 years.
A great (but unfinished) series of fantasy novels called A Song of Ice and Fire — a story that captures politics exceptionally well — includes a throne made of old swords. Each king, though he might be clad in armor, cannot help but be cut by it occasionally. The throne is, by design, uncomfortable.
Part of the reason politicians find it easy to perceive taxpayer money as a free and unending line of credit is that they’re so comfortable and secure in their positions. Senators and Representatives need term limits. Career politics is a plague. If someone wants to stay in the game, let him act as an advisor.
Steve, do you think that the “elite” group you so accurately described view themselves as superior in the same way that a pick pocket or con artist would view himself as compared to the “sucker” he just hoodwinked? Granted, the people you have in mind would likely dress their superiority complex in the finery of credentials or public office, or the prefix “Honorable” in their titles. But on an almost primal level, I wonder if theirs is the same feeling of satisfaction as a common criminal?
As for the rest of us, I think you nailed it.
This never ceases to remind me of the president, who forwent such a lucrative career in Wall Street to become a public servant: or (as they say in English), who quit his low-paying private sector job in order to galvanize mobs of impoverished wretches to bleed more money from Chicago’s public fisc.
But this divide between the public sector overlords and private sector schlubs is becoming a bit foreboding. It seems obvious that this high level of public spending and public employment (with public benefits!) is unsustainable, yet the president and congress adamantly increase the public role. They even preach the virtues of serving the public [heh] rather than seeking profit. Notwithstanding elf-kingdom inhabitants like Paul Krugman, does anyone at all envision a way for this to end well?
If only I could get some investors for my oil spill nuking project…
I’m not in financial services, but have friends who are — investment bankers, hedge fund managers, and the like. They work hard, take risks, and generally (though not always) do OK. I don’t get the sense that they feel superior to the people who willingly hand them assets to invest, except to the extent that (a) they’re usually pretty smart, and (b) can make a mint — each of which probably contributes to that Masters of the Universe sort of feeling. But I certainly don’t think there’s anything innate in it, and I wouldn’t suggest that they’re hoodwinking their clientele.
If someone buys a house, they typically take out a loan to do so. Isn’t this using Other People’s Money? In other words, isn’t Capitalism predicated on the free flow of Capital, which involves Other People’s Money? We’re not talking about transaction costs here — say the fees earned by lawyers and bankers in M&A. We’re talking about people who engage in activities of varying risk at the behest of people who have money they’d like to see grow.
The problem I have with government is that it’s a combination of vast coercive power, low expertise, uncertain intentions and zero skin in the game.