Spare the Risk, Spoil the Child
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  • rheddles

    The problems start in Congress. With Sarbanes Oxley. Compounded by Dodd Frank. And the acceptance of TBTF. If there’s no risk, why take a chance? Get rid of cronyism, allow risk takers to profit and risk taking will return. The school system didn’t stifle Brin, Page or Zuckerman. What is being stifled is the next layer.

  • bpuharic

    Or is it that our economy is too developed and it’s an artifact of the mathematics of trying to start a new business in a mature economy? Perhaps it’s also an artifact of the fact capital concentration is greater among the wealthy than at virtually any time in our history. Who needs to invest money when you already have it all?

    As Paul Volcker pointed out, that’s one reason our economy blew up. The wealthy started to speculate and gamble, since there were so few productive outlets to invest in with the capital they’ve amassed.

    • Good observation. I’ve never seen it put this way, but it seems logical that one of the side effects of a stratified society would be risk-aversion, since the wealthy are *so* wealthy that they have nothing to gain by risk-taking, and the poor are *so* poor that they have no ability to take risks.

      • Kavanna

        It’s a generational problem, not a class problem.

        The Boomers and their immediate predecessors have more savings than the developed world’s economy can use, *under current political and technological conditions*. So various bubbles get inflated to make that demographic feel wealthier than it really is, at the expense of younger workers.

        • bpuharic

          I respectfully disagree. It’s not the baby boomers who have wealth. We barely have enough for retirement and many of us are going to be shocked. The massive inequality we have IS a problem and it is the cause of the lack of demand that is the root of our economic problems.

          If we had the same income distribution 1975-2007 as we did 1950-1975, median income in the US would be not the current $50,000 but $85,000

          Can you imagine what demand would be if the middle class had an income of $85K? THAT is how much money inequality has transferred from the middle class to the wealthy.

  • LivingRock

    In the classroom, how do you balance needed structure and teaching a core base of standard knowledge without incentivizing over-conformist approval-seeking students? Teaching sounds hard…

  • Corlyss

    “The problems likely start in childhood. Our school system is designed to create confirmist and approval-seeking kids.”

    There was some idiot in the 70s who fancied himself and expert on education and who gained a lot of followers for his thesis that competition was nigh unto evil (created winners and losers) and cooperation and caring should be the substitute values taught. This fellow taught that competition destroyed self-esteem, which led to depression and suicide in teens. Obviously in his cosmos education was less important than the socializing and ego strokes children got from school. It was another poorly vetted sociological experiment run thru the educational system. About the same time we got pass-fail, followed by outcomes based education, that drained learning benchmarks of usefulness if it didn’t eliminate them entirely. I have no evidence to assert this but it seems to me these trends picked up as more and more women became single mothers, especially minority single women, i.e., the prototypical needy citizen who just couldn’t make it without a multitude of government cushions and backstops that together made risk a four-letter word. [See Obama’s very successful Julia campaign gimmick.]

    • bpuharic

      Do those govt welfare programs include the $10,000,000 FDIC bailout Mitt Romney got; the billions in farm subsidies to ADM and other billion dollar companies; the implicit subsidy offered to the 4 biggest banks to the tune of about $100 billion?

      Just curious…or is ‘welfare’ confined to the poor?

      • Fred


        • bpuharic

          The last question

      • Corlyss

        Ah, yes. The search for logical inconsistencies that prove the speaker is a hypocrite.

        The subsidies you refer to are negligible compared to the volume of payouts to the multitudes at or below 130% of the poverty line, as well as the greedy middle class that keeps inserting itself into eligibility for handouts originally designed for the poor. You should do a little research into the history of Social Security between it’s initial rollout and, say, 1940. You would understand it is the paradigm for how helping hands to the genuinely disadvantaged become indispensable crutches for the vast majority of the population.

        So the answer to your question is, “It really doesn’t matter who the original intended recipients of welfare are, because eventually everyone will be declared eligible.”

        • bpuharic

          The 20 richest hedgefund managers made more money last year than we spent on all food stamp programs, and the 25 richest made more money than all NYC schoolteachers. Yet they added NOTHING to our economy. The wealthy elite are subsidized with TBTF welfare, bailouts, all the while doing more damage to the economy in 1 year than the poor do in 50

          If you want to do research, perhaps you should start with Paul Volcker’s observations on the role of the financial sector, with ITS huge trillion dollar welfare payments, vs its contributions to GDP

  • I think there’s already plenty of risk built into American lives, to the point where it’s simple human nature to want to limit it as much as we possibly can, which under prevailing circumstances isn’t much. Most families have very little margin for error these days, and many of them are starting to behave accordingly, displaying traits that WRM has praised on other occasions (when the risks being discussed are social and/or sexual) as laudable prudence.

  • USNK2

    Besides all the other reasons to avoid risk, once “safe as houses” disappeared, not many Americans can move for a job. And, why should they? I moved for jobs as a refugee from vulture capitalism in 1998 and 2000 and 2001 and 2003, and lost my career, my health, and now stuck in a real estate nightmare with no way out.
    Next time a politician says “work hard and play by the rules”, ask for the fine print to understand that the rules changed. Want to refi your mortgage? Destroy your credit score and flirt with foreclosure. That is just one example of the New Rules.

    • bpuharic

      Exactly, and well put. Economists have recognized labor is ‘sticky’. It’s ironic conservatives are so ‘pro family’ until money’s involved then we’re supposed to live with the ‘creative destruction’ effect capitalism has on communities. I personally saw it first hand in Pittsburgh, growing up there in the 60’s, with the steel industry.

      An economic system that loses the potential to sustain a middle class will lose credibility. And the 1 percenters are creating exactly that type of situation.

  • crocodilechuck
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