Comments: This Week, On America's Next Top Asshole

Probly we should encourage the wealthy Mr. Griffin to take (un paid) a vacation, whereby we could save his investors, what, about 30%?

Except that I don't really give two ounces of rancid shit about whether hedge-fund investors make or lose money...

Posted by woody at January 18, 2009 11:35 AM

"We have helped to create real social value in the U.S. economy," he said.

Here's something I've been wondering about: A corporation issues a million shares of stock, and the market prices the stock at $10 a share. Then I sell you a thousand shares of this stock for $11 a share. Based on this trade, are all of the million shares now worth $11 each? If so, have I created a million dollars of wealth by selling you $11,000 in stock? And, if I have created a million dollars of wealth in this one sale, shouldn't I be rewarded in some way for "creating real social value", as Mr. Griffin was? (Other than the measly $1000 profit I made on the stock sale, I mean.) And how does the million dollars of wealth that I created compare with the million dollars of wealth created by a factory worker who takes, say, a hundred thousand dollars worth of raw materials and converts them to $1.1 million in saleable products? I mean, we're both wealth creators, right?

Posted by SteveB at January 18, 2009 11:40 AM

It seems "hedging" is a way of life for Mr. Griffin...

Posted by Fred Woolsey at January 18, 2009 11:42 AM

SteveB, John K. Galbraith neatly solves your conundrum for us:

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

Greedy sociopathic bastards don't give a flying frijole about equity and justice.

Posted by Fred Woolsey at January 18, 2009 11:46 AM

Sorry, but I think that misses the point. I'm not making an argument about Mr. Griffin's morality, I'm making an argument about his utility. What does he actually do, and what contribution to the economy does he make that would justify his salary?

I think most Americans understand that people like Kenneth Griffin are selfish assholes, but, not understanding what Kenneth Griffin actually does, assume he must be doing something that is economically "productive."

If you want to fight against the Kenneth Griffins of this world, it does no good to question their morals; you must expose, in terms the average person can understand, their parasitical nature and uselessness. Trying to explain in plain English the difference between the wealth "created" by Kenneth Griffin and the wealth created by your average factory worker (who, these days, would be in a factory in China, I suppose) seems like one place to start.

Posted by SteveB at January 18, 2009 12:41 PM


Point taken. I was focused on the "asshole" aspect of Mr. Griffin's self-serving rationalization vs. the fact that millions of Americans who get a much thinner slice of the pie are creating wealth as well.

I do, however, respectfully disagree that questioning the morals of the Griffins of the world does no good. A cost-benefit analysis showing that an auto worker makes a social contribution equal to Mr. Griffin's, valid though it may be, isn't going to get too many people fired up enough to do something about it. Moral outrage may do just that.

Posted by Fred Woolsey at January 18, 2009 01:42 PM

Mr. Griffin IS a salesman with a winning product. Winning as defined by the fact that he runs across MANY people with MONEY who are quite willing to part with some/all of what they have for his product, through his salesmanship. SOME people CAN SELL a blind man binoculars. (plus the world is full of suckers so one need not be terribly talented-even blind folks can be suckers)

Posted by Mike Meyer at January 18, 2009 02:12 PM

The problem with moral outrage is that, for most people, it's tempered by what they believe to be practical considerations. So Mr. Potter the banker is a greedy old bastard, but we still need a bank, don't we? And as long as Potter's bank is run honestly, how outraged does anyone get that Potter himself is rich and greedy?

That's the conception of the rich that most of us grow up with and internalize. Most of us tend to assume that wealth is somehow connected to some economically productive activity, or why would people be getting so rich doing what they do? In Kenneth Griffin's case, something we don't really understand is being done with money, and someone (not us) is getting rich, so what's new about that?

What's new, of course, isn't Griffin's greed, or his comically inflated view of himself, but the fact that we've now completely severed wealth-making from the production of goods and services. John D. Rockefeller was probably ten times the asshole that Kenneth Griffin could ever hope to be, but Rockefeller's greed was channeled into building a company that produced something that people needed. That's now a thing of the past, at least here in the U.S.

Posted by SteveB at January 18, 2009 07:16 PM


Trading pieces of paper does not "create wealth". It merely determines who has a claim on the stream of wealth generated in the future by the economy.

Determining who captures that wealth is, at heart, a political question, not one of economics.

Posted by bobbyp at January 18, 2009 10:18 PM


I can't quarrel with that (not that I actually had a quarrel with you to begin with!). I suspect that, since many of us hope to be filthy rich ourselves some day, there is a tendency to hold up the Mr. Potters and Griffins of the world as shining examples of the American Dream fulfilled. That dovetails nicely with the fact that many in the media and other centers of public influence heap fawning praise on the likes of Griffin and his ilk: people like Jack Welch, a man who made boatloads of money by liquidating most of what once was GE, retaining only the most lucrative bits (leaving the rest of society to cover the costs of unemployment, plant shutdowns, etc.).

Posted by Fred Woolsey at January 18, 2009 10:22 PM


Rockefeller did not "create wealth". He expropriated it. He did not hesitate to use means we currently associate with members of the Gotti family.

Oil would have been produced and distributed even if the old asshat had never been born. He did, if you look into it, have competitors....whom he ruthlessly crushed.

Posted by bobbyp at January 18, 2009 10:23 PM

Rockefeller did not "create wealth". He expropriated it. He did not hesitate to use means we currently associate with members of the Gotti family.

Sigh. You'd think the word "asshole" would have made this clear, but I wasn't praising John D. Rockefeller.

Posted by SteveB at January 18, 2009 11:07 PM

Oh, please Steve. You aver (and I quote exactly): "Rockefeller's greed was channeled into building a company that produced something that people needed."

Your "sigh" is thus deemed out of order since you either can not or will not actually read and understand the English language. I did not claim you were praising "little shiny dimes" JDR. Rather, I assert you misunderstand what he actually did.

Posted by bobbyp at January 18, 2009 11:48 PM

Now where did I put that pitchfork?

Posted by Glenn Condell at January 19, 2009 12:20 AM

Steve, I'd like to take a shot at answering your original question, if I may.

"And how does the million dollars of wealth that I created compare with the million dollars of wealth created by a factory worker who takes, say, a hundred thousand dollars worth of raw materials and converts them to $1.1 million in saleable products? I mean, we're both wealth creators, right?"

In your scenario, the autoworker creates wealth but you don' all.
The autoworker combines his labout, the capital equipment and raw materials to creat something useful that wasn't there before. Collectively, the society has more. That's wealth creation.
You buyig and selling your shares merely takes $11000 out of the buyers pocket and puts it in yours. Nothing has been added overall to the society. That is not wealth creation (emphasis on "creation"). The value of the company, no matter what the share price is, is an opinion. A collective opinion maybe, but still an opinion. Nd can change any moment. Nothing of value has been added to the society.
In short, Mr Griffin, in all likelyhood, has not added ANY wealth to the society. He merely takes it out of one pocket and puts it in another.

Posted by Jonco at January 19, 2009 02:00 AM

Oops. Sorry about all the typos. Preview is my friend. Repeat. Preview is......

Posted by Jonco at January 19, 2009 02:03 AM

"I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard."

Actually, a recent study revealed productivity gains from monetary incentives diminish as income level increases until they actually produce a negative effect. Not taxing this man means we're just giving in to the soft bigotry of low expectations for hedge fund managers.

Posted by postmodernprimate at January 19, 2009 04:23 AM

johnnyp: OK, tell me where I've gone wrong here. Did Standard Oil not produce a product people needed? Was Rockefeller's greed not channeled into building up Standard Oil? Things I did NOT say, but which you appear to be reading into what I said, include: 1) Rockefeller was "creating wealth" when he did this (go back and look, I never wrote that), 2) We wouldn't have oil if not for Rockefeller and Standard Oil.

Look, the point I was trying to get at was that the liberal critique of Kenneth Griffin is exactly the same as the liberal critique of Rockefeller: greedy, selfish, evil. Liberals do this all the time, they go for the personal attack rather than the systemic attack. What they miss is that there's been a change in the capitalist system in recent years, which opens up an additional line of attack against the Kenneth Grffins of this world, namely, that they are not connected in any way to any sort of economically productive activity. Please note the phrase "connected to." Rockefeller was not engaged in economically productive activity himself, but he was siphoning off wealth from an activity that was economically productive. Griffin is not. Got it?

Jonco: Yes, exactly. The worker who turns raw materials into useful (or at least desired) products is creating wealth. Kenneth Griffin is not. But there's an appearance of wealth creation, when the stock market climbs, or the value of a hedge fund increases, and since the hedge fund manager is doing something complicated that most of us don't understand, he often gets away with claiming that he's creating wealth.

One helpful clue is the trillions of dollars of "value" lost in the stock market in recent months. GM stock has plummeted, but that doesn't mean that the cars that GM produces have lost their value. I can't walk into a dealership and buy a car for 10% of the 2008 selling price, and that's because the workers who made the car created real wealth, while the broker who sold stock in the car company did not.

Posted by SteveB at January 19, 2009 09:15 AM

Butbutbut Saint Obama would never ever ever take money from slimy corporate greedheads like Griffin! He only takes money from small donors on teh intertubes! It's true! I read it on DKos!

Posted by AlanSmithee at January 19, 2009 12:26 PM

I hate to break it to the ignorant son of a bitch but the ONLY people in all of history on planet Earth that have EVER created wealth are those who produce goods!

Posted by Terrible at January 19, 2009 01:30 PM

That is called 'speculations', that useless activity, SteveB. That's the word. The other thing is called 'entrepreneurship'.

And it doesn't even matter if Mr. Griffin is an asshole or humanitarian and philanthropist, like, say, Mr. Soros. Steve is right, it's all in the game; the activity that is being rewarded is the activity that you'll see a lot of.

Posted by abb1 at January 19, 2009 02:12 PM

AlanSmithee: I'm quite sure Obama will take LEGAL money from anyone. Fact is, from now on, ALL WINNERS WILL NEED THE NET, and that "small donor".

Posted by Mike Meyer at January 19, 2009 03:04 PM

AlanSmithee; The small donor tied to the election of the FIRST Black President IS CALLED PROGRESS. (Pwogwess)

Posted by Mike Meyer at January 19, 2009 03:12 PM

SteveB - I think money is a bad measure of wealth; as we're seeing, it's largely a fiction and can vanish overnight while material circumstances remain unchanged. "Bubbles" would be impossible if money were a real measure of wealth. You can't have a "car" bubble - you either have a car, or you don't. So, the question is, does what Griffin does allow us to produce more of real wealth - that is, goods and services - than otherwise? I'm not sure what 'otherwise' is - Griffin's contention that people won't work hard under a progressive tax scheme seems absurd, since our current tax scheme is way more regressive than the income tax used to be.

My answer has always been: no, this isn't the best we could do, because people like Griffin aren't supporting stuff that creates the most useful goods and services, they're investing in whatever gets them the most money. So we get tons of currency speculation and market bubbles in real estate that are less than useful. Sure, he's correct that right now he, and those like him, are the ones deciding what gets investment money, and sometimes that coincides with what is actually useful - but since the rich people are the ones with all the money, it's not like we have a choice about the fact that they're the ones who make the investment decisions. Yes, you're right, I'm not deciding where the money goes, because I don't have any of the money. That doesn't mean Griffin is doing a good job of it - he's just doing *A* job of it.

Posted by saurabh at January 19, 2009 05:25 PM

Had a conversation with an online friend recently, in which Bernie Madoff's legitimate business was presented as cause enough for the penthouse and limo and other accoutrements of fabulous wealth. I didn't reply--I knew what she meant after all--but it's the word has been bothering me for a while: is there another business on earth that is so legitimate?

Here's one scenario, however, how value is sorta created. If a salesman can convince a buyer to pay more for a product, then he has added value to the company, and for very little effort. Ideally, it's spread around to the people who made the thing too, and a good capitalist would probably argue that this is an efficient way to find optimum prices for stuff.

Of course, you can also just mark shit up and add "value" arbitrarily, presuming someone is convinced it's worth it, or presuming buyers have no other choice. Even better if you're the one who can extend credit to buy it. One assumes this situation must be temporary--in the aggregate, an economy can't be worth more than the stuff in it, and you can only pretend for so long.

Also thinking (disjointedly) that an economy where it's hard to exchange labor for goods-n-products, but easy to exchange influence, seems stable enough, and historically pretty common.

Posted by Keifus at January 19, 2009 05:58 PM

If a salesman can convince a buyer to pay more for a product, then he has added value to the company, and for very little effort.

There's the common meaning of 'value' and several economic terms that include the word 'value'. While in economics 'exchange value' can indeed be expressed as the price, it doesn't help to confuse the common meaning with technical lingo. IOW, I don't think in your example there's been any value added.

Posted by abb1 at January 20, 2009 02:38 AM

I'm not sure about this, but I think that in mainstream neoclassical economics, there isn't any meaning to the word "value" except "what someone will pay for it". Marx had an elaborate theory about "value" and that led to the tranformation problem and if I keep typing I will quickly reveal I've forgotten most of what little (very little) I ever knew about it.

SteveB--I think you're making a good point regarding the distinction between JDR and Griffin.
I think the misunderstanding of your point is a legitimate point itself--in making the case against Griffin, we don't want to (even by accident) give the impression that JDR somehow "earned" his immense wealth.

There is a talent involved in helping run a large organization and building it up (even if it is done fairly, whatever that would mean), but I don't know how to value it. Probably nobody does, and since it is ideologically convenient to pretend that what people get in the "free market" (another term without much meaning) is right, that's the perspective that people have adopted in the past several decades.

Posted by Donald Johnson at January 20, 2009 02:31 PM

Donald is correct. And SteveB....your statements imply that JDR "created value". That 'value' would have most likely been created in any event by others. I realize you do not try to justify the person...but by inplication, you justify the process.

Wealth accummulation via force is just another word for collectivization. Substitute John Henry for Stahkonovite...what's the difference? One was achieved under "conditions of freedom"? Some freedom.

But I'm drinking heavily tonight.

Posted by bobbyp at January 20, 2009 08:59 PM

in mainstream neoclassical economics, there isn't any meaning to the word "value" except "what someone will pay for it".

Even in that case I think clearly it's absurd to bring the salesman into the equation. It's an 'ideal' price payed by an 'ideal' consumer in an 'ideal' market. Good salesmen still doesn't add value, she just distorts the market.

Posted by abb1 at January 21, 2009 02:39 AM

Hi abb1, I think I must agree with you about being more precise with terms like that, and my apologies.

Still...does the salesman add value to a product if he causes people to want it more (or make more people want it)? I suppose that would be true. He also provides a valuable service to his employers (a service which does not add positive value to the product, I think, but which his employers would understandably pay for).

I was trying to reach for a job of a similar stripe whose value usefulness is more defensible. The salesperson isn't a monumental leech like Griffin is--probably because for a lot of products, there's better intuition about their actual, um, value, there are alternative vendors, the system doesn't push people into consuming their services, etc.--but a salesman often does pretty well compared to those people who add value in the more obvious ways.

Posted by Keifus at January 21, 2009 08:41 AM

Oh, I dunno. I imagine the salesman might be a part of the market mechanism that allows products to be exchanged and thus to realize their 'value' - in the sense Donald is talking about. What the salesman does can be useful (or sometimes harmful, I suppose); in this sense it does have value, but I don't think it changes the 'value' of the product he sells.

Posted by abb1 at January 21, 2009 10:20 AM

They can't buy if if they don't know ya got it. The salesman IS just as necessary as that trucker bringing YOUR product to the marketplace, and in fact, the salespeople make it a marketplace.

Posted by Mike Meyer at January 21, 2009 10:49 AM