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The Psychopaths Running Wall Street...

Shadow Wolf

Certified People sTabber
You would have to be a psychopath to do what many bankers, Wall-Street tycoons, and C.E.Os did to get us in this mess. When you can be responsible for so much suffering, while continue to suck up every last dime to add to the suffering, there has to be something psychologically wrong. Especially considering that we have privatized prisons, it seems to be a very plausible diagnosis (I would suspect some have anti-social personality disorder).
 

Penumbra

Veteran Member
Premium Member
I agree with the observation that executives are often not ideally moral people. Especially in finance.

I prefer to avoid, however, using executives as scapegoats. The executives are appointed by the board of directors of a corporation. The board of directors are elected into their positions by the shareholders. The shareholders are most people.

Most people that hold shares (tens of millions of households in the US alone), don't use their shares to vote. They just buy mutual funds or index funds, and give their voting rights back to the executives, and they do so voluntarily. Most companies, therefore, are institutionally owned.

The structure of corporations actually provide the means for voluntary socialism. The ownership of the means of production are freely purchasable. People have different amounts of money, but through saving and investing, people can buy stock, increase their wealth, and have more of a say. But they don't.

One of the problems is wealth/income inequality due to bad taxation principles, but if more people bought stock with what they do have, and used that power to reduce lobbying and corporate political donations, things could change. Also, people by the millions vote for presidents like Reagan or Bush that further the income gap, and then they don't buy shares or vote the shares they have.

So I'm not sure what people expect.
 
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InformedIgnorance

Do you 'know' or believe?
From what I understand, there is a wealth of research that show that 'good' traders and psychopaths share many of the same psychological characteristics in terms of risk taking, ability to divorce themselves from the outcomes of their actions (especially in terms of the effect on other people) and so forth... In addition, their jobs then positively reinforce such behaviours...

Its kinda scary really.
 

Shadow Wolf

Certified People sTabber
I did recently watch a documentary called The Corporation, in which they mentioned the idea of executives being psychopaths.
 

Penumbra

Veteran Member
Premium Member
I did recently watch a documentary called The Corporation, in which they mentioned the idea of executives being psychopaths.
Yes.

More specifically, it refers to the corporation itself being a psychopath. It describes a corporation as being an entity that has no real liability, has fiduciary duty to maximize shareholder value (meaning to push as many negative externalities onto others as possible), and that doesn't form long-term commitments.

I'd suggest that with an engaged population, the corporate structure can be salved and used as an element of socialism. Most of the ills of corporations are due to their implementation, not the fundamental principles.
 

Valjean

Veteran Member
Premium Member
The question is, why would companies want to weed out psychopaths? Their ability to focus on the bottom line to the exclusion of all other considerations makes them uniquely suited for the job the company and shareholders expect them to do.
 

Penumbra

Veteran Member
Premium Member
The question is, why would companies want to weed out psychopaths? Their ability to focus on the bottom line to the exclusion of all other considerations makes them uniquely suited for the job the company and shareholders expect them to do.

Shareholders routinely try to pass proposals to fix aspects of a company that they think need improving, but they rarely get a majority vote.
 
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InformedIgnorance

Do you 'know' or believe?
Shareholders routinely try to pass proposals to fix aspects of a company that they think need improving, but they rarely get a majority vote.
Generally speaking this is because such proposals are based on one or more individual's values and beliefs as opposed to the group values and beliefs. When attempting to pass such a thing, group conformance kicks in and individuals are more likely to vote in such a way as to act in a way that they believe benefits the group as a whole - were you to ask those same people individually with their response anonymous, they are probably more likely to be willing to deviate from group consensus.

That and the fact that people like money.
 

Penumbra

Veteran Member
Premium Member
Generally speaking this is because such proposals are based on one or more individual's values and beliefs as opposed to the group values and beliefs. When attempting to pass such a thing, group conformance kicks in and individuals are more likely to vote in such a way as to act in a way that they believe benefits the group as a whole - were you to ask those same people individually with their response anonymous, they are probably more likely to be willing to deviate from group consensus.

That and the fact that people like money.
There's some truth in that, but that's not the primary reason.

Most large companies are primarily owned by institutions. You can look up the percentages; most American blue-chip companies are more than half-owned by institutions. That can be retirement funds, insurance companies, investment funds, etc. Most people, rather than holding shares directly, hold index funds, mutual funds, exchange traded funds, work with financial advisers, and so forth. So they hold a basket of hundreds of companies. The institutions that manage these funds have the voting rights, and the majority of them don't bother to vote for shareholder proposals, and just regularly approve directors and compensation packages. So they don't care too much. So it's not really conformance; it's just abstaining from voting, and not caring.

But that's why I don't see why executives should be viewed as scapegoats, and that's why I say I don't know what people expect. That's how people set the system up, and they continue to operate it that way. If the tens of millions of households in the US that own equities, don't care, don't pay attention, don't know what they own, don't vote their shares, and just give their votes to someone else who abstains from voting, then responsibility lies with them as much as the executives.

Edit: So what I mean overall is that yes, many executives of corporations, especially in the finance world, have tendencies we'd associate with psychopaths, and we can blame them for actions. But overall, I think this is a symptom of a civilization that's asleep.
 
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work in progress

Well-Known Member
There's some truth in that, but that's not the primary reason.

Most large companies are primarily owned by institutions. You can look up the percentages; most American blue-chip companies are more than half-owned by institutions. That can be retirement funds, insurance companies, investment funds, etc. Most people, rather than holding shares directly, hold index funds, mutual funds, exchange traded funds, work with financial advisers, and so forth. So they hold a basket of hundreds of companies. The institutions that manage these funds have the voting rights, and the majority of them don't bother to vote for shareholder proposals, and just regularly approve directors and compensation packages. So they don't care too much. So it's not really conformance; it's just abstaining from voting, and not caring.

But that's why I don't see why executives should be viewed as scapegoats, and that's why I say I don't know what people expect. That's how people set the system up, and they continue to operate it that way. If the tens of millions of households in the US that own equities, don't care, don't pay attention, don't know what they own, don't vote their shares, and just give their votes to someone else who abstains from voting, then responsibility lies with them as much as the executives.
Scapegoats! This is a system by design to favour the richest and entrench their wealth, and your lame analysis with a theme of "we're all investors" doesn't cut it in an age when the wealthiest 400 Americans have more wealth than the poorest half of the total population!
Income inequality in the U.S. is currently the highest its been since the 1920s, with the 400 richest Americans (who are all billionaires) having as much wealth as the bottom 50 percent of Americans combined. And as it turns out, just one wealthy family has managed to amass a fortune equal to that of the combined net worth of the bottom 30 percent of Americans — the Waltons, heirs to the Walmart fortune

The Walmart Heirs Have The Same Net Worth As The Bottom 30 Percent Of Americans | ThinkProgress
Edit: So what I mean overall is that yes, many executives of corporations, especially in the finance world, have tendencies we'd associate with psychopaths, and we can blame them for actions. But overall, I think this is a symptom of a civilization that's asleep.
It is a symptom of a civilization that is collapsing, and those with wealth and power are looting the store...just as they did when the Soviet Union collapsed 20 years ago. Top executives are rewarded for quarterly profit margins with big bonuses, and have no incentives to stay with the same company for more than a few years. And the more ruthless they are, the greater their rewards. If that's not a system that favours a psychopath, I don't know what is!
 

Kilgore Trout

Misanthropic Humanist
This makes me remember with fondness that magical period of time when the rich and powerful used to give their fortunes away to paupers and skip around shooting rainbows out of their butts.
 

work in progress

Well-Known Member
This makes me remember with fondness that magical period of time when the rich and powerful used to give their fortunes away to paupers and skip around shooting rainbows out of their butts.
So, it's acceptable to you that wealth is being increasingly concentrated at the top, at a time of economic stagnation!
 

Trey of Diamonds

Well-Known Member
Interesting article and not a surprise. I just wonder how many are psychopaths and how many are sociopaths. I also wonder if the environment causes normal people to go crazy. If there are normal people in that environment, how do they appear to all the psychopaths and sociopaths? In an insane environment a sane man will appear to be insane. To steal a phrase from Star Trek. :eek:
 

Penumbra

Veteran Member
Premium Member
Scapegoats! This is a system by design to favour the richest and entrench their wealth, and your lame analysis with a theme of "we're all investors" doesn't cut it in an age when the wealthiest 400 Americans have more wealth than the poorest half of the total population!
Income inequality in the U.S. is currently the highest its been since the 1920s, with the 400 richest Americans (who are all billionaires) having as much wealth as the bottom 50 percent of Americans combined. And as it turns out, just one wealthy family has managed to amass a fortune equal to that of the combined net worth of the bottom 30 percent of Americans — the Waltons, heirs to the Walmart fortune

The Walmart Heirs Have The Same Net Worth As The Bottom 30 Percent Of Americans | ThinkProgress
These political "only" areas aren't particularly meant for debate; they're for discussion. It's against the rules of the forum for heavy debate to occur here; we can discuss things civilly. You talk about my "lame" analysis and by posting those links you seem to make all sorts of assumptions about my politics or positions.

Read this and get back to me.

It is a symptom of a civilization that is collapsing, and those with wealth and power are looting the store...just as they did when the Soviet Union collapsed 20 years ago.
And why is it, do you think, history repeats itself so often? Time and time again, and not just in the modern era, but in many ancient eras too.

I don't think wealth inequality is one of the symptoms of a collapsing civilization, I think it's one of the causes. And it occurs over and over because people are generally the same. A smaller segment of the population is willing to take advantage of the rest of the population, and the rest of the population allows it to happen. Eventually things get so unequal that revolution occurs, and it starts anew.

Top executives are rewarded for quarterly profit margins with big bonuses, and have no incentives to stay with the same company for more than a few years. And the more ruthless they are, the greater their rewards.
Do you own any equities, or no? Index funds, mutual funds, exchange traded funds, or anything of that nature?

If so, did you vote against the compensation plan of the executives of the companies that you own?

If that's not a system that favours a psychopath, I don't know what is!
It is indeed a system that favors a psychopath.

But my point is, that system is us.
 

Quagmire

Imaginary talking monkey
Staff member
Premium Member
But my point is, that system is us.

Now Penumbra, you'll never make any friends by suggesting people take responsibility for themselves. :D

I agree with everything you've said about all this, although you obviously know a lot more about the structure and how it works than I do.

Just the same, I've always said that the people at the top are just doing what we pay them to do.
 

work in progress

Well-Known Member
These political "only" areas aren't particularly meant for debate; they're for discussion. It's against the rules of the forum for heavy debate to occur here; we can discuss things civilly. You talk about my "lame" analysis and by posting those links you seem to make all sorts of assumptions about my politics or positions.
Let's review. If "lame" is offensive, I'll retract it; but here's what I consider offensive propaganda to be posted without expecting to be challenged....and maybe you can show we where it says that this sub-forum and the Political World are not "particularly meant for debate." Does that mean any claim made gets to go unchallenged? Regardless! This is your statement which I find totally offensive, because it is a central part of the meme that wealth inequality and the worldwide banking collapse only has victims and no perpetrators:
"But that's why I don't see why executives should be viewed as scapegoats, and that's why I say I don't know what people expect."
And that came after a presentation that sounds suspiciously similar to Mitt Romney's: "these corporations are owned by institutions, and our pension funds are invested in those institutions, therefore we are all investors now.' Except that small fish like me, who have payed into a company-run pension plan for years, have no say over how it's invested, or how much the company borrows out of that pension fund on an IOU promissory note! So some "investors" are more equal than others in our new world where everyone's an investor and everyone who owns a business is a "job creator." Another line of BS that should be shot down every time it trips out of the mouth of some apologist for capitalism.....but that's another issue to take down on another occasion!


Read this and get back to me.

And why is it, do you think, history repeats itself so often? Time and time again, and not just in the modern era, but in many ancient eras too.
No, this isn't a natural historical cycle. The only facet of modern capitalism that is identical to Ancient Rome or with feudalistic societies in the Middle Ages are the gaps in wealth and income. Debt-based financing and fractional reserve banking systems which have made continuous growth an imperative, are not a repeat of history. And for the record neither is the wealth gap that shows the top 1% of Americans owning 40% of the Nation's wealth! Awhile back, a group of historians did an analysis of available records of Ancient Rome and determined that Rome's wealth gap (even on a slave-labour based economy) was less than the U.S. and other Western nations:
To determine the size of the Roman economy and the distribution of income, historians Walter Schiedel and Steven Friesen pored over papyri ledgers, previous scholarly estimates, imperial edicts, and Biblical passages. Their target was the state of the economy when the empire was at its population zenith, around 150 C.E. Schiedel and Friesen estimate that the top 1 percent of Roman society controlled 16 percent of the wealth, less than half of what America’s top 1 percent control.
To arrive at that number, they broke down Roman society into its established and implicit classes. Deriving income for the majority of plebeians required estimating the amount of wheat they might have consumed. From there, they could backtrack to daily wages based on wheat costs (most plebs did not have much, if any, discretionary income). Next they estimated the incomes of the “respectable” and “middling” sectors by multiplying the wages of the bottom class by a coefficient derived from a review of the literature. The few “respectable” and “middling” Romans enjoyed comfortable, but not lavish, lifestyles.

Income inequality in the Roman Empire « Per Square Mile
I don't think wealth inequality is one of the symptoms of a collapsing civilization, I think it's one of the causes. And it occurs over and over because people are generally the same. A smaller segment of the population is willing to take advantage of the rest of the population, and the rest of the population allows it to happen. Eventually things get so unequal that revolution occurs, and it starts anew.
Which is why economic models need to be designed to equalize the trend towards inequality when it develops. That was the logic behind modern liberal capitalism of John Maynard Keynes and his proteges. An economic system that has shifted from simple supply and demand, to creating demand for novelty and new products through sophisticated manipulation of consumers, provides an incentive for people to attach their status to brand names and the acquiring of status symbols. The alternative is to scrap capitalism altogether, and design a socialist economic system that is responsive enough to local interests to avoid decline in output, and although the general will is to reform an existing system rather than scrap it and try something new, our world is fast reaching a point where growth-based economics is crashing into the natural limits of what the planet can provide for a growing human population.

Do you own any equities, or no? Index funds, mutual funds, exchange traded funds, or anything of that nature?
Yes, but I had to cash in a lot of them when my wife had to stop working and to cover medical costs that weren't completely covered by health insurance and group benefits.

If so, did you vote against the compensation plan of the executives of the companies that you own?
Like most of the small fish in this investor class that you idealize, I have never tried to play the game of buying company shares directly, and even if I did, corporate democracy awards votes by the number of shares owned, so what's your point? A few major players can control the corporation without having to control 50% of the stock, because the minions out there are all divided up into little marginalized votes.

It is indeed a system that favors a psychopath.

But my point is, that system is us.
The "system is us" only in respects to the Joe-The-Plumber type fools who think the system will someday work for them. That used to work to keep real left movements from crashing the party in the American political system; but, as I pointed out on a different thread from the analysis of economist-Richard Wolfe, the reason for that confidence that capitalism would work for the average person existed because American history had witnessed a decade by decade increase in the average wage level from the 1820's to the 1970's. Since the 80's, the trend has reversed; and wages have declined for most segments of the population, including skilled labour, because of outsourcing production and importing illegal workers that can be treated as a slave labour class.

Nowadays, with the era of the Cold War and the boogeyman of Communism becoming a distant memory for younger people, it is time for Americans, Canadians and Europeans to wake up and realize that there is no "double dip recession" that can be fixed through either liberal or conservative capitalist economic strategies. The new economy is going to have to follow some sort of socialist model that provides for the basic necessities of life, and discourages the consumer-driven desire for novelty and status-seeking that drives this system.
 
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