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Today's New York Times offers an op-ed by a former executive vice president of AIG. This man, Jake DeSantis, had had enough and decided to go John Galt. The op-ed is the resignation letter he addressed to CEO Edward Liddy. Link here.
And today's Wall Street Journal has a column by Holman Jenkins about the true scandal of the AIG bonuses. It turns out that most of what we all thought was true was fiction. Link here.
From reading these articles we can learn a couple of lessons about anger management and rage control.
If you are an aspiring demagogue and wish to manipulate emotion, you must start with a good story. Find a confused and gullible population, and offer story that explains what went wrong, with special emphasis on making them feel like victims. After all, the less you know about what is going on in the world, the more you feel like you have no control over it.
The story does not have to be true. It needs to make an occasional tilt toward the facts, but it does not need to be factually accurate. It just has to make sense.
The story will help you to colonize confused and unsuspecting minds. Thereafter you will be able to get them to do what you want them to do.
If manipulation and seduction are your games, storytelling is the way to go. A good story will fire up the emotional engines while narcotizing all forms of rational control.
On the other side of the great clinical divide, those who want to temper their tendencies to emotional excess would do better to ignore siren song of stories, turn on their capacity for reason, and jump right into reality.
A good place to start is the two op-ed pieces I have linked above. They give a more honest account of the facts of the AIG scandal than we are hearing from the politicians.
After reading these op-eds, take your emotional temperature and see whether your new-found knowledge of the facts has caused your righteous anger to subside.
Admittedly, there are other ways to calm anger, but a cold, hard look at the facts must be at the top of the list.
Of course, some of those who have learned to deconstruct texts in college no longer believe that facts exist at all. They are surely the most ripe to suffer the influence of aspiring and real demagogues. Which is the whole point of deconstruction, anyway.
I am not saying that no one should ever feel anger. As Aristotle put it, we all need to feel the right anger at the right time in the right place at the right person under the right circumstances.
So, if your anger has not completely subsided, hopefully it has been redirected against the politicians who have been manipulating your emotions for their own political gain.
Showing posts with label John Galt. Show all posts
Showing posts with label John Galt. Show all posts
Wednesday, March 25, 2009
Tuesday, March 24, 2009
Is It Ethical to Go John Galt?
The concept of "going John Galt" has been denounced for being amoral and selfish. Its detractors believe that if you work at less than your optimal capacity you are subverting the economic and social order.
The argument leads to an absurdity. As Dr. Helen Smith explained: "It strikes me as odd that if you work and make money, you're a selfish bastard, and if you stop working hard and making money, you're a selfish bastard."
The detractors assume that your work does not belong to you. If that is true, then someone else, a bureaucrat, has the right to force you to do what he wants you to do.
But then no one can say that you are responsible for your actions. Coercion removes personal responsibility.
Under such a regime, the only way to exercise your freedom is to work less. When taxes become so onerous that you are working mostly for the state, the only way to exercise freedom is to go on vacation.
Some have criticized "going John Galt" by conjuring dramatic images of physicians going on strike and leaving their patients to die.
Of course, that is not the point. It's not about the strike, but about the extra effort that might make the difference between finding or not finding the correct diagnosis.
When a physician earns a fixed salary no matter how hard he works, he is going to be less present when he is needed. Not so much because he has decided to become a slacker, but because his extra effort has not been appreciated.
Perhaps this is why patients in government-run health care systems must wait so long to receive needed treatment. Even with the best of intentions, when physicians have lost their freedom to earn as much as they can, their morale will be undermined and they will work less effectively.
It all goes back to "animal spirits." In times of deflation and depression how can we motivate people to work harder, to spend more money, to invest in productive enterprise, and to loan out money.
According to the concept of "going John Galt" granting them more freedom-- not more regulation-- is the key. They will be more likely to put their capital to work if they are free to take risks... to enjoy the benefits or to suffer the losses.
And this does not just apply to investment capital or human capital. It also applies to psychological capital, the self-respect that is gained or lost through social interaction.
It's all about competition. Competitive games need to be fair. They should afford everyone an opportunity to engage their energies. But they never yield equal outcomes. If the game is rigged, then there is no reason to play. And, when nothing is to be gained-- in money or self-respect-- a rational actor will naturally not engage.
The problem is not so much that people are going to go on strike. More insidiously, excessive taxation and regulation will cause people to work less effectively, to lose focus, to be more distracted, to take more time off, and to seek out more leisure.
No one is going to take very many risks or to invest very much effort if he is not allowed to enjoy the rewards.
The argument leads to an absurdity. As Dr. Helen Smith explained: "It strikes me as odd that if you work and make money, you're a selfish bastard, and if you stop working hard and making money, you're a selfish bastard."
The detractors assume that your work does not belong to you. If that is true, then someone else, a bureaucrat, has the right to force you to do what he wants you to do.
But then no one can say that you are responsible for your actions. Coercion removes personal responsibility.
Under such a regime, the only way to exercise your freedom is to work less. When taxes become so onerous that you are working mostly for the state, the only way to exercise freedom is to go on vacation.
Some have criticized "going John Galt" by conjuring dramatic images of physicians going on strike and leaving their patients to die.
Of course, that is not the point. It's not about the strike, but about the extra effort that might make the difference between finding or not finding the correct diagnosis.
When a physician earns a fixed salary no matter how hard he works, he is going to be less present when he is needed. Not so much because he has decided to become a slacker, but because his extra effort has not been appreciated.
Perhaps this is why patients in government-run health care systems must wait so long to receive needed treatment. Even with the best of intentions, when physicians have lost their freedom to earn as much as they can, their morale will be undermined and they will work less effectively.
It all goes back to "animal spirits." In times of deflation and depression how can we motivate people to work harder, to spend more money, to invest in productive enterprise, and to loan out money.
According to the concept of "going John Galt" granting them more freedom-- not more regulation-- is the key. They will be more likely to put their capital to work if they are free to take risks... to enjoy the benefits or to suffer the losses.
And this does not just apply to investment capital or human capital. It also applies to psychological capital, the self-respect that is gained or lost through social interaction.
It's all about competition. Competitive games need to be fair. They should afford everyone an opportunity to engage their energies. But they never yield equal outcomes. If the game is rigged, then there is no reason to play. And, when nothing is to be gained-- in money or self-respect-- a rational actor will naturally not engage.
The problem is not so much that people are going to go on strike. More insidiously, excessive taxation and regulation will cause people to work less effectively, to lose focus, to be more distracted, to take more time off, and to seek out more leisure.
No one is going to take very many risks or to invest very much effort if he is not allowed to enjoy the rewards.
Thursday, March 19, 2009
"Going John Galt"
Yesterday, Congressional Democrats got back in touch with their animal spirits. They were in highest dudgeon over the fact that AIG had fulfilled a contractual obligation to employees by giving them the bonuses allowed by law.
Since Democrats had crafted and passed this law, you can see that a visceral fear of accepting responsibility does much to revive flagging animal spirits.
But feigned outrage is often as effective as the real thing. The government is going to get its money back. And yet, as AIG CEO Edward Liddy put it: "My fear is, the damage is done.... We will get the bulk of that money back. They will return it with their resignations."
Blogger Dr. Helen Smith has dubbed this: "Going John Galt." Link to some of her posts here.
Borrowed from Ayn Rand's "Atlas Shrugged" the concept means that when taxes become confiscatory, they will become a powerful disincentive and people will choose not to work. If that is the only way they can exercise their freedom, then that is what they will do.
There are other ways to disincentivize work. This morning Caroline Baum picked up the argument in her Bloomberg column. She asks why, if bankers have been made into the designated scapegoats for the financial crisis, why would any of them want to continue working to fix the banks. Link here.
But now a new disincentive has given banking executives another reason to Go John Galt: death threats.
Yesterday, Rep. Barney Frank insisted that CEO Liddy turn over the names of the executives who had received bonuses.
Liddy responded that his company had been receiving death threats directed against these people, and that they now feared for their lives. Thus, rather than release something that could turn into a hit list, Liddy asked for assurances that the names not be published.
Barney Frank refused.
Most Congresspeople, however, do not believe that the death penalty is a fitting punishment for the newly-invented crime of receiving mandated retention bonuses. Instead, they prefer confiscatory taxes.
OK, they are saying, you can have your bonuses; we respect the rule of contract law. But, by the way, we are going to tax them at 100%, or 90%, or 70%.
Once you start down that road, why stop at this year's bonuses. Why not declare that last year's bonuses were ill-gotten gains, and thus, deserve to be taxed at 100%. Wasn't Wall Street just another Ponzi scheme?
This is not only about today's John Galts. Given the current climate of demagogic posturing and violent scapegoating, would you want your child to grow up and become a banker?
Since Democrats had crafted and passed this law, you can see that a visceral fear of accepting responsibility does much to revive flagging animal spirits.
But feigned outrage is often as effective as the real thing. The government is going to get its money back. And yet, as AIG CEO Edward Liddy put it: "My fear is, the damage is done.... We will get the bulk of that money back. They will return it with their resignations."
Blogger Dr. Helen Smith has dubbed this: "Going John Galt." Link to some of her posts here.
Borrowed from Ayn Rand's "Atlas Shrugged" the concept means that when taxes become confiscatory, they will become a powerful disincentive and people will choose not to work. If that is the only way they can exercise their freedom, then that is what they will do.
There are other ways to disincentivize work. This morning Caroline Baum picked up the argument in her Bloomberg column. She asks why, if bankers have been made into the designated scapegoats for the financial crisis, why would any of them want to continue working to fix the banks. Link here.
But now a new disincentive has given banking executives another reason to Go John Galt: death threats.
Yesterday, Rep. Barney Frank insisted that CEO Liddy turn over the names of the executives who had received bonuses.
Liddy responded that his company had been receiving death threats directed against these people, and that they now feared for their lives. Thus, rather than release something that could turn into a hit list, Liddy asked for assurances that the names not be published.
Barney Frank refused.
Most Congresspeople, however, do not believe that the death penalty is a fitting punishment for the newly-invented crime of receiving mandated retention bonuses. Instead, they prefer confiscatory taxes.
OK, they are saying, you can have your bonuses; we respect the rule of contract law. But, by the way, we are going to tax them at 100%, or 90%, or 70%.
Once you start down that road, why stop at this year's bonuses. Why not declare that last year's bonuses were ill-gotten gains, and thus, deserve to be taxed at 100%. Wasn't Wall Street just another Ponzi scheme?
This is not only about today's John Galts. Given the current climate of demagogic posturing and violent scapegoating, would you want your child to grow up and become a banker?
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