(Not The Onion) Forbe's Gangster Capitalist Apologist would make Adam Smith VOMIT.

[Faryn Balyncd]

Last edited Sat Sep 21, 2013, 05:01 PM - Edit history (3)

From Harry Binswanger's Forbes.com Op Ed:

Give Back? Yes, It's Time For The 99% To Give Back To The 1%


"...Here’s a modest proposal. Anyone who earns a million dollars or more should be exempt from all income taxes. Yes, it’s too little. And the real issue is not financial, but moral. So to augment the tax-exemption, in an annual public ceremony, the year’s top earner should be awarded the Congressional Medal of Honor.

"Imagine the effect on our culture, particularly on the young, if the kind of fame and adulation bathing Lady Gaga attached to the more notable achievements of say, Warren Buffett. Or if the moral praise showered on Mother Teresa went to someone like Lloyd Blankfein, who, in guiding Goldman Sachs toward billions in profits, has done infinitely more for mankind. (Since profit is the market value of the product minus the market value of factors used, profit represents the value created.)"




Harry Binswanger, "objectivist"

Interesting, that Forbes (who employ the slogan "Information for the World's Business Leaders", and who bill their web site as "among the most trusted resources for senior business executives, providing them the real-time reporting, uncompromising commentary, concise analysis, relevant tools and community they need to succeed at work, profit from investing and have fun with the rewards of winning.&quot would publish, with an apparent straight face, not simply the rantings of an "objectivist" "philosopher" former sidekick of Ayn Rand herself. . . . . but one who sees no irony in presenting the poster-child CEO of of a company from the Gangster Capitalism Hall of Fame, as the centerpiece of his adoration.


...A company that, according to "objectivist philosopher" Binswanger "creates value" ("Since profit is the market value of the product minus the market value of factors used, profit represents the value created." - Harry Binswanger) by such innovative techniques as betting against the bonds it fraudulently peddled to clients, and pioneering "in the area of securing completely underserved public bailouts, including the collection of nearly $17 billion in public money for speculative trades with bailed-out AIG and the outrageous receipt of a Commercial Bank Holding Company charter in late September of 2008, allowing it to borrow billions in lifesaving money from the Federal Reserve discount window at a time when Goldman execs were already selling their beach houses for cash in anticipation of the firm's collapse."



Lloyd Blankfein






Matt Taibbi describes a few of Goldman's innovations:

• In the infamous "Abacus" case, Goldman teamed up with a hedge-fund billionaire named John Paulson to create a born-to-lose portfolio of mortgage derivatives, which were then marketed by Goldman to a pair of sucker European banks, IKB and ABN-Amro. When the instruments crashed, Paulson made bank on bets he made against his own loser portfolio. Goldman's peculiar role was in "renting the platform," i.e. allowing IKB and ABN-Amro to think that neutral Goldman, not a hedge funder like Paulson massively betting against the product, had created the portfolio. Goldman only made $15 million in the deal that ended up causing over a billion in losses, meaning this wasn't even just about money – they were just trying to curry favor with a hedge fund client out to screw a bunch of Euros. They were fined $550 million.

• In the even more absurd Hudson deal, Goldman unloaded a billion-plus sized chunk of toxic mortgage-backed crap on Morgan Stanley during a time when Lloyd "Mother Teresa" Blankfein was telling his minions to unload as much of the firm's 'cats and dogs' as possible, ie. its soon-to-explode subprime holdings. In its marketing materials, Goldman represented to Morgan Stanley that its interests were aligned with Morgan, because Goldman owned a $6 million slice of the Hudson deal. It didn't disclose that it had a $2 billion bet against it. Morgan Stanley, which was subsequently bailed out by taxpayers like Harry Binswanger, lost $960 million.

• Goldman bought a series of aluminum warehouses and has apparently been serially delaying the delivery of aluminum in order to artificially inflate the price. Even Binswanger might have heard of this one. The CFTC sent a wave of subpoenas on this score just last month. . . . Earlier this year, Goldman and Chase agreed to pay a combined $557 million to settle government claims that the banks and/or their mortgage servicing arms engaged in wholesale abuses in the real estate markets, including (but not limited to) robosigning, the practice of mass-producing fictitious, perjured affidavits for the courts for the purposes of foreclosing on homeowners. . . . . . In 2009, a Goldman programmer named Sergey Aleynikov left his office in possession of a code that contained Goldman's high-frequency trading algorithms. Goldman promptly called the FBI – which up until that point had done exactly zero to prevent crime on Wall Street – to help Mother Teresa's bank recapture its valuable trading code. In court, a federal prosecutor admitted that the code Aleynikov had in his possession could, "in the wrong hands," be used to manipulate markets. Aleynikov just pulled an eight-year sentence. Goldman, incidentally, has gone entire quarters without posting a single day of trading loss – in Q1 2010, the bank made at least $25 million every single day, somehow never once betting wrong in 63 trading days. Imagine that! What foresight! What skill! One can see how Mr. Binswanger could believe that the bank's CEO should be exempt from income taxes.


http://www.rollingstone.com/politics/blogs/taibblog/forbes-calls-goldman-ceo-holier-than-mother-teresa-20130920#ixzz2fWmw9uea

So what would defenders of capitalism from ages past think of "philosopher" Binswanger and "value creator" Blankfein, andtheir ilk?

Well, we don't have to go very far back to ask Paul Volcker (the former Fed Chairman who has been harshly critical of purported "innovations", and of compensation trends, in the financial service sector over the last 2 decades) and who has “berated bankers for their failure to acknowledge a problem with personal rewards and questioned their claims for financial innovation.” Here's a sample of his views on the :

“I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence.”

"...the only useful banking innovation was the invention of the ATM."
- Paul Volcker, Former Fed Chairman (1979-1987) interview February 5, 2010



Former Carter & Reagan Fed Chairman Paul Volcker

But, while we're asking old school capitalists what they think of corporate apologist Binswanger & Blankfein's Goldman-Sachs, and of today's Gangster Capitalism in general, why stop with Ronald Reagan's Fed Chief?

Why not ask the granddaddy of free market capitalism Adam Smith himself?






Emma Rothschild, director of the Center for History and Economics at King's College, Cambridge, in her study ''Economic Sentiments: Adam Smith, Condorcet and the Enlightenment'' portrays an Adam Smith far, far different from the "philosophy" of today's right wing corporate apologists. Rothschild discusses how, despite the fact that Smith has been "reinvented" & misrepresented as "a narrow, unyielding defender of unfettered free enterprise", the real Adam Smith was much more complex.

The real Adam Smith:
- - - "railed against monopolies and the political influence that accompanies economic power",
- - - "worried about the encroachment of government on economic activity, but his concerns were directed at least as much toward parish councils, church wardens, big corporations, guilds and religious institutions as to the national government",
- - - "was sometimes tolerant of government intervention, especially when the object is to reduce poverty'',
- - - "supported universal government-financed education because he believed the division of labor destined people to perform monotonous, mind-numbing tasks that eroded their intelligence, not because education led to economic gain."




So let's listen, for a while, to Adam Smith himself:

"The interest of the dealers [referring to stock owners, manufacturers, and merchants], however, in any particular branch of trade or manufacture, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, and absurd tax upon the rest of their fellow-citizens."

(Adam Smith, Wealth of Nations (Amherst, New York: Prometheus Books, 1991), pages 219-220)

"This monopoly has so much increased the number of some particular tribes of [manufacturers], that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and destruction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists."

(Adam Smith, Wealth of Nations, page 368)

"The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

(Adam Smith, Wealth of Nations, page 220)

"But though the interest of the labourer is strictly connected with that of the society, he is incapable either of comprehending that interest, or of understanding its connexion with his own. His condition leaves him no time to receive the necessary information, and his education and habits are commonly such as to render him unfit to judge even though he was fully informed. In the public deliberations, therefore, his voice is little heard and less regarded, except upon some particular occasions, when his clamour is animated, set on, and supported by his employers, not for his, but for their own particular purposes."

(Adam Smith, Wealth of Nations, page 218)

''When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.''

- Adam Smith, The Wealth of Nations

''No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.''

Adam Smith
http://www.nytimes.com/2001/08/16/business/economic-scene-the-many-faces-of-adam-smith-rediscovering-the-wealth-of-nations.html?sec=&spon=&pagewanted=print

The reality is, that the "philosophical" porn that Harry Binswanger espouses on the pages of Forbes, is not only a philosophy totally rejected by none other that Ronald Reagan's Fed Chief, but it is not even a philosophy that the "father of capitalism" would recognize.

If Adam Smith could know what corrupt, monopolistic, & exploitative practices would come to be defended in the 21st century as "free market capitalism", Adam Smith would VOMIT.

[snagglepuss]

1. It's a hard to take this all in at one sitting without feeling sick.

Bookmarked to consume bits at a time.

[TNNurse]

15. Nausea

overwhelmed me.....I do not think I can go back and finish.

[Demeter]

2. I saw that in disbelief

[JEB]

3. Talk about your class warfare.

These bastards are out to kill as many of us working schmucks as they can.

[Egalitarian Thug]

4. A system developed to facilitate easy transactions among equals has been perverted into

a means of subjecting the majority to indentured servitude. Mr. Smith would indeed be sickened by what's been done with his theory.
& R

[LuvNewcastle]

5. I'm especially interested in his views on education.

I love the idea of learning for learning's sake, not solely for capital gain or advancement in work. There's really no reason why any of us should have to pay to receive the knowledge that is part of humanity's shared heritage and the result of the long process of our collective evolution.

We humans are not summed up by our work. We shouldn't be learning things just so we can use them to benefit our employers. Our curiosity leads us to learn about our interests. If those interests lead us to a particular occupation, that's well and good, but we shouldn't only learn so that we can turn our knowledge into money. We spend so much of our lives learning the things that are absolutely necessary to do our jobs well and by the time we're done with that, we're too tired and miserable to learn the things that interest us. We focus our attention from childhood until well into adulthood figuring out ways to make money and then wonder why we feel so empty inside.

Thanks for the post. I've heard Adam Smith quoted by RWers for so many years that I just figured he was one of their asshole gurus, like an early version of Ayn Rand or something. I'm going to find out more about his work. I think that probably any of the people who first envisioned the systems that brought us the one we have today in the U.S. would be appalled. I know I'm more shocked by it every day.

[Faryn Balyncd]

6. His rationale is most interesting.

:

[Egalitarian Thug]

9. If you just read An Inquiry into the Nature and Causes of the Wealth of Nations, you'll be miles

ahead of most of the idiots that defend organized parasitism as a viable social model.

It's like the Bible, most of it's most vocal advocates only know a few select misinterpretations that they use to rationalize their misdeeds.

[LuvNewcastle]

10. Thanks for the tip, I'll remember that.

[BlueJazz]

17. ....And my thanks also.

[RevStPatrick]

7. I find it interesting that...

..."Binswanger's disease" is a form of dementia.
This man is certain suffering from something.

http://en.wikipedia.org/wiki/Binswanger%27s_disease

[Faryn Balyncd]

8. Perhaps the editors at Forbes caught the same dementia.

[BillyRibs]

12. He suffers from an abundance of wealth.

We should cure him of this affliction.

[BillyRibs]

11. When the Boot Heel of the Barons, and bankers

Rests firmly against the throats of the working class and poor, it called business as usual. when the working punch up against the very people who would steal their labor, It's called Class warfare.

[onethatcares]

19. may I use that elsewhere?

You hit the hammer with the nail quite correctly.

[BillyRibs]

20. you are most welcome to do so!

[LongTomH]

13. You've given us a lot to read and ponder! Thank you!

Bookmarking for later.

Thom Hartmann has commented a few times on Adam Smith and his real philosophy. Smith labeled his work 'Natural Philosophy' or 'Moral Philosophy.'

[JHB]

14. Binswanger is an "Objectivist" who launched his career in public institutions

He taught philosophy at CUNY's Hunter College from 1972 to 1979 and at other New York City schools as well as at the University of Texas, Austin for a semester in 2002. Since 1997, he has operated a fee-based email discussion group on Objectivism. Binswanger has spoken on Objectivist philosophy at over 30 universities, across the U.S., Canada, and abroad.

http://en.wikipedia.org/wiki/Harry_Binswanger

Don't know how many of those "over 30 universities" were public, but I'm guessing at least some of them.

Wait, don't tell me!: It was "research".

[Faryn Balyncd]

18. Here's Mr. Binswanger's "objectivist" explanation of why torture is a moral necessity:

http://ariwatch.com/HarryBinswangerOnTorture.htm



And of why "Big Brother doesn't scare me":

http://ariwatch.com/HarryBinswangerAndTheSurveillanceState.htm

[Mnemosyne]

16. K&R to read later. nt