Ayn Rand

[jkjsooner]

I've been hearing quite a bit about Ayn Rand lately. I have to admit being ignorant about her and her philosophy so I spent the last couple of days reading up on it.

I find the relationship between today's conservatives (especially the religious right variety) and Objectivism to be very strange.

Comments?

I'll add the first. Having a Rand disciple (lover?) as chairman of the Federal Reserve for almost 20 years scares the heck out of me. No wonder Wall Street fed on a unregulated orgy. Ironically, I'm not sure if Greenspan's economic interventions (keeping interest rates too low for too long) or his laissez faire economic policies (on regulation) are more to blame. He seemed to strike a balance of the worst of both worlds.

All I know is that it's now pretty clear that those in charge (CEO's and board of directors) looking out for their own best interests does not always yield the most efficient economy. As long as CEO's are rewarded for taking excessive risk and are not adequately punished when those risks fail then they will not act in the shareholder's best interest.

[Turd_Ferguson]

Are you saying that you do like Obmacare, or you don't. I can't tell.

[SicEmBaylor]

There's a lot I'd like to say, but I'm really trying to be less condescending these days.

[batonrougesooner]

Who is John Galt?

[batonrougesooner]

As long as CEO's are rewarded for taking excessive risk and are not adequately punished when those risks fail then they will not act in the shareholder's best interest.

What does this mean exactly? Sounds like a sound bite from the Obama playbook.

Honest question.

Another way to put this would be to ask "How do you most effectively stifle innovation?". Answer would be to adequately punish CEO's when risks fail.

It is trite as hell but needs repeating. No risk, no reward.

[SicEmBaylor]

What does this mean exactly? Sounds like a sound bite from the Obama playbook.

Honest question.

Another way to put this would be to ask "How do you most effectively stifle innovation?". Answer would be to adequately punish CEO's when risks fail.

It is trite as hell but needs repeating. No risk, no reward.

Exactly right.

Risk is the very essence of American capitalism.

[SicEmBaylor]

I've been hearing quite a bit about Ayn Rand lately. I have to admit being ignorant about her and her philosophy so I spent the last couple of days reading up on it.

I find the relationship between today's conservatives (especially the religious right variety) and Objectivism to be very strange.

There is no relationship between the religious-right and objectivists. They are diametrically opposed to one another. It's almost the same with conservatives though it depends entirely on what sort of conservative you're talking about. The closest political relationship is with libertarians not conservatives and certainly not the religious-right.


I'll add the first. Having a Rand disciple (lover?) as chairman of the Federal Reserve for almost 20 years scares the heck out of me. No wonder Wall Street fed on a unregulated orgy.
You think Wall Street is unregulated? Hah. Wow.

Ironically, I'm not sure if Greenspan's economic interventions (keeping interest rates too low for too long) or his laissez faire economic policies (on regulation) are more to blame. He seemed to strike a balance of the worst of both worlds.[/quote]

Greenspan was anything but laissez-faire. The very existence of the Federal Reserve makes a laissez-faire economy impossible. How can you accuse a guy who, almost daily, tinkered with the nation's economy as being a stalwart of laissez-faire economics?

[SicEmBaylor]

In any case, and I'm just throwing this out there, I'd like to eliminate the Federal reserve all together.

[jkjsooner]

What does this mean exactly? Sounds like a sound bite from the Obama playbook.

Honest question.

Another way to put this would be to ask "How do you most effectively stifle innovation?". Answer would be to adequately punish CEO's when risks fail.

It is trite as hell but needs repeating. No risk, no reward.

I've been saying this for longer than I've known who Obama was. It isn't from anyone's playbook.

What I am saying is that the compensation structure of CEO's encourages risk without regard to long term consequences. If you are a CEO and are looking at your own personal best interest which of the two choices would you take?

1. Take excessive risk. Leverage your company 10 or 100 to 1. Take the huge multi-million dollar bonuses that come with the short term gain achieved by taking the risk. Encourage huge swings in company stock price. When the company finally collapses, who really cares? You have pocketed tens of millions in bonuses.

2. Charter the more conservative route. (I don't mean take no risks but instead take risks that at least seem to be in the long term best interest of your company.) Forego huge swings in stock prices and the bonuses they produce.


Too many company's took risks that were obviously destined to fail. (I posted about this prior to the economic collapse.) I can only assume that CEO's wanted to milk the system for their own short-term gain.


Ideally stock holders would force CEO's into taking choice #2 but that system seems to have broken down.

[jkjsooner]

It is trite as hell but needs repeating. No risk, no reward.

Where did I ever say we should take no risk? Please don't put words in my mouth. I'm talking about excessive gambling type risks that seem to favor the CEO's interest over the company's interest.

[jkjsooner]

There is no relationship between the religious-right and objectivists. They are diametrically opposed to one another. It's almost the same with conservatives though it depends entirely on what sort of conservative you're talking about. The closest political relationship is with libertarians not conservatives and certainly not the religious-right.


You think Wall Street is unregulated? Hah. Wow.

Ironically, I'm not sure if Greenspan's economic interventions (keeping interest rates too low for too long) or his laissez faire economic policies (on regulation) are more to blame. He seemed to strike a balance of the worst of both worlds.

Greenspan was anything but laissez-faire. The very existence of the Federal Reserve makes a laissez-faire economy impossible. How can you accuse a guy who, almost daily, tinkered with the nation's economy as being a stalwart of laissez-faire economics?

When it came to regulations, he held a much more laissez-faire view. As I said he did tinker with the economy when it came interest rates/etc and I'm not defending that.

[jkjsooner]

I want to give an example of the excessive risk that I'm talking about. Take Angelo Mozillo. Back four or five years ago he was pushing his company to take more and more subprime loans. I don't know for sure but Mozillo is a pretty smart guy. I suspect that he knew where this all would lead. I think he made the decision to ride the wave, inflate his company's stock, and pocket tens of millions of bonuses. Why not? I would argue that Mozillo is much richer today than he would have been had he chosen the prudent/conservative route. It's also clear his direction led the company into ruin.

As for "punishing" CEO's what I mean is that the regulation should be there to set up a structure so that CEO's have a personal financial interest in their company's long term health and have little financial interest in milking the system for short term gain. I am not saying we should create CEO prisons or retroactively take away their bonuses.

This is where I disagree with with those who encourage a complete hands off approach. I have faith in human kind but there are many out there I do not trust and sometimes those few can game the system and create huge economic disruptions.

As one last point, if I took Rand's position to the extreme, I would have to argue that insider trading laws are unfair. Why is the the governments role to keep someone from profiting on their knowledge? We know what damage insider trading and other trading schemes did to our markets in the late '20s. (Some would argue that a person inside the company has a duty to protect the company's shareholders and insider trading works against that purpose thus no additional laws are necessary.)

As for Baylor's comment on the religious right and Objectivists. I agree but that hasn't stopped commentators who pretend to be the Christian brand of conservatives from praising Rand. That was the point of my original post. It's strange. Maybe they don't mean to justify all of her philosophy but, frankly, if I were them I'd stay a mile away from her - just as I think someone who wants some social welfare (on religious grounds or whatever) should stay a mile away from Marx.

[SouthFortySooner]

I think she would be a good neighbor.

[bluedogok]

I really don't see a connection between Bernanke and Rand, in fact they seem to be diametrically opposed in my readings of Rand and The Objective Standard (http://www.theobjectivestandard.com/). The very existence of the Fed goes against the objectivist philosophy.

The financial world as it is constructed now is already one of the most heavily regulated fields in the world and has been steadily getting more regulation since at least the Sherman Anti-Trust act if not earlier. You have more faith in man than I do, the problem with regulation is you still have humans doing the regulating and they are as susceptible to greed as the ones who they are supposed to regulate. One example is Bernanke, the former head of a Wall Street financial giant that was at the root of the latest economic strife is now in charge of the printing press.

People have been screwed over since the dawn of time, it is nothing new. The human nature for some is to ALWAYS try to figure out a way around the rules if they feel they can gain from doing so and they are willing to risk everything to do so and there is absolutely nothing that legislation can do about that. We have all sorts of laws against drug trafficking but yet there are people who build empires operating outside of the law knowing full well that death or jail time could take it all away but yet they continue to operate with wanton disregard for rule of law. Many of the Wall Street types are really the same personality just using other people's money to make themselves rich and are willing to have the same disregard for the law. How is "strengthening" the regulations going to change any of that? It seems the scams nowadays are much larger and involve many more people than they used to. In most cases the complexity of the scams goes well beyond the intelligence level of the regulators or the level of regulation. In many ways regulation creates loopholes and unintended consequences because those who are comfortable working outside the law are always trying to figure out how to build a better mousetrap.

[Chuck Bao]

I do not agree that any law could or should be passed to protect shareholders from management mistakes or set a limit on bonuses.

I believe that shareholder representative groups can best serve the purpose. There has been increasing shareholder activisim in the US over the last 10 years, which has had quite mixed results. However, I think they can do more. They can easily put pressure on the major fund management groups, as these groups certainly wouldn’t their unitholders to see them voting for unnecessarily large management bonuses. Shareholder representative groups should be able to collect proxy votes over the internet and attend the annual shareholders meeting and raise a ruckus. I’ve been to a few ruckuses and that was just a few small shareholders wanting higher dividends and to protect their share investment.

I see this happen in Thailand a lot. But, most Thai listed companies are only third generation family controlled. Management has passed to the grandchildren and grandfather had at least one minor wife and a separate set of grandchildren. The cousins in management are grabbing for everything they can carry out the door. Cousins not in management are willing to vote for large bonuses for non-family management to gain loyalty and keep an eye on their cousins. My chief point of this Thai example is that the corporate boardroom is often times reduced to a petty battle of control and patronage. And, that has nothing to do with shareholders and maximizing the per share stock value.

You can’t legislate that. Join or form an internet group to protest for minority shareholder rights.

Concerning the Federal Reserve, let’s keep it, please. For you people talking about the free market, keep it in your pants. I can tell you from experience: 1) stock markets are not rationale in the short term and always tend to overshoot; 2) there is too much money sloshing around the financial system and that short term volatility will not change anytime in the future with fund transfers at a blink of an eye; 3) businesses hate volatility and will not invest until the risk factor diminishes; and 4) a central bank is needed to offset the volatility in the forex and capital markets and calm everyone the **** down.

Concerning Ayn Rand, I read Fountain Head earlier this year. Alright, I read about 90% of the book and just stopped reading it because it just got so tedious. The free will intrigued me at first, but the personal relationship tangles got too crazy and stupid. But, I can see 60 years ago that it would have been in a class of its own. So I am an Ayn Rand fan and should soilder on her other books.

[King Crimson]

sherman-anti trust had a purpose...to break up monopolies and re-open competitive markets. it wasn't just a mean-spirited piece of anti-market "regulation" legislation that ceded control of markets to the government.

additionally, the CFA (comprised of OU and UGA) sued the NCAA under sherman anti-trust to get more football games on TV....to reintroduce competition for fledgling cable networks like TBS or ESPN to be able to put games on.

[jkjsooner]

Concerning Ayn Rand, I read Fountain Head earlier this year. Alright, I read about 90% of the book and just stopped reading it because it just got so tedious. The free will intrigued me at first, but the personal relationship tangles got too crazy and stupid. But, I can see 60 years ago that it would have been in a class of its own. So I am an Ayn Rand fan and should soilder on her other books.

So what about her general principles of ethics? Altruism? Selfishness?

(These aren't necessarily directed to you, Chuck, so don't think I'm putting you on the spot.)

Most of those who find her ethics to be reprehensible (as I do) should probably stay away from glorifying her. That was my original point.

[Chuck Bao]

So what about her general principles of ethics? Altruism? Selfishness?

(These aren't necessarily directed to you, Chuck, so don't think I'm putting you on the spot.)

Most of those who find her ethics to be reprehensible (as I do) should probably stay away from glorifying her. That was my original point.

I read Ayn Rand like I read translations of the Marquis de Sade. They were important back in their era. But, I don't think either should be taken to heart. It is fiction with the focus of man's inhumanity to man. I guess that represents the poltical and wealth extremes that are popular now in an entirely different world.

Reading about the human condition, and bearing in mind the current economic situation, is not a bad thing in my opinion. But, there is little hope that human nature will change.

Don't read too much into fiction and ideals and people who claim to do the right thing based on the principle of it. The key thing is that we don't live in a perfect world where karma gets meted out.

The truth is that if your grandfather was a mafia or a drug dealer and you inherited that money. Your money is clean.

[C&CDean]

My farts smell like chicken wings.

[Chuck Bao]

My farts smell like chicken wings.

So, you don't have monkeys flying out of your ***. You have chickens? That still has got to hurt.

[StoopTroup]

Note to self: Don't eat chicken wings at any of the tailgates.

[BornandBred]

A) Wasn't Ayn Rand an athiest? That would be opposed to the Christian right, as mentioned earlier. Socially and economically conservative are often VERY different things.

B) The lesson I pulled from Atlas Shrugged was that if the government starts trying to 'make things fair' and need becomes the quality that we are judged by, we're all doomed. So, without the government's interaction ability determines your station in life, in theory.

I'll save you the time of reading all 1200 pages of Atlas: government is evil, men are flawed but generally good, women are whores.

[Scott D]

What does this mean exactly? Sounds like a sound bite from the Obama playbook.

Honest question.

Another way to put this would be to ask "How do you most effectively stifle innovation?". Answer would be to adequately punish CEO's when risks fail.

It is trite as hell but needs repeating. No risk, no reward.

I know, right.

The essence of the American economy hinges completely on giving a guy who sends a company to record losses a 7 to 8 figure bonus on top of his 7 figure salary instead of sending him packing for doing his job poorly for years.

[Animal Mother]

Where did I ever say we should take no risk? Please don't put words in my mouth. I'm talking about excessive gambling type risks that seem to favor the CEO's interest over the company's interest.

What would you like him to put in your mouth? :)

I'm keedin'. Ask Dean. I'm a flamin' leebeerul.

[mdklatt]

I do not agree that any law could or should be passed to protect shareholders from management mistakes or set a limit on bonuses.


The problem with the latest financial is that everybody got ****ed whether or not you had one cent invested. And the AIG employees and shareholders seem to be doing better than most lately thanks to Uncle Sam (and what's that spell? US).

[My Opinion Matters]

She's the favored author of 19 year old socially awkward malcontents everywhere. She should be taken about as seriously on economic matters as Dan Brown should be on religious history.

Next up--contemporary immigration issues according to Dr. Seuss.

[TopDawg]

Take Angelo Mozillo. Back four or five years ago he was pushing his company to take more and more subprime loans. I don't know for sure but Mozillo is a pretty smart guy.

I don't know about his financial smarts, but he made a pretty good web browser.

[SicEmBaylor]

Ayn Rand's philosophy is a utopian pipe dream. However, I like her version of utopia a hell of a lot better than the socialist version.

[jkjsooner]

Guys, thanks for your responses.

I also feel that pretty dumb that I knew almost nothing about this person until recently (other than seeing the name thrown around here and there).

I suppose I wasn't one of the socially awkward types. Who am I kidding. I was just an illiterate one.

[TopDawg]

Ayn Rand's philosophy is a utopian pipe dream. However, I like her version of utopia a hell of a lot better than the socialist version.

Is there just one socialist version of utopia? I think I could come up with a socialist utopian pipe dream that would be pretty alluring.