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I think that what the Occupy Wall Street people are really angry about is value transference, and they just need to have their eyes opened.
Maybe if I went down to Zuccotti Park and handed out some leaflets explaining the concept…
October 17, 2011 | Permalink
2011 : Half Sigma gives out flyers ,educates the American people...
2012 : Half Sigma for president!
October 17, 2011 at 02:16 PM
Oh, they are *fine* with value transference. They love it! They are Communists, remember? To each according to his needs, and all that?
What they are angry about is that the value is being transferred to someone else other than them. They don't want a free market in which each productive citizen creates value for himself. They want to milk the productive citizens and transfer that value to themselves.
[HS: This is a misunderstanding of what Marx meant by that phrase.]
October 17, 2011 at 02:23 PM
I wish you would at least learn that you didn't invent this concept. What you are actually talking about monetary creation and rent seeking.
October 17, 2011 at 02:32 PM
It's not like the protesters create any value themselves. They probably major in useless fields like sociology, literature and art. They transfer value too, they're just jealous because they're not very good at it.
October 17, 2011 at 02:45 PM
Unfortunately, every single incarnation of Marx into real human beings calling themselves Marxists has resulted in this type of value transference.
Does it really matter if Marxism is fatally flawed or simply 100% misinterpreted?
[HS: Marx was merely imagining a future society not much different than what Robert Heinlein wrote about in For Us, the Living. And conservative libertarian types love Heinlein.]
Mercy Vetsel |
October 17, 2011 at 03:03 PM
You should link the VT in this post to your original VT post from March 2008.
[HS: Or you can just Google value transference, my article shows up at the top of the results.]
October 17, 2011 at 03:07 PM
The Tea Party also badly needs this concept explained to them.
October 17, 2011 at 03:11 PM
NOPE :|. Most of these guys are in some bullshit major; they have actually 0 intention of creating any value.
And not all Wall Street related activities are value transference. There is much to be gained by society for investing in solid companies, having a monetary system for loans, etc..
Just the sectors that have significant commingling with government tend to be the ones which are bad/dangerous, since you get into that crony capitalism area.
October 17, 2011 at 04:26 PM
When I was 15 and growing up in 1970's Scotland I knew Communism was a fraud. If, "From each according to their ability, to each according to his needs" were true then I should have been having sex for free. I had the need and my girlfriend had the ability--alas it was not to be. That lesson taught me all I needed to know about Communism, Marx, Adam Smith, buy side vs sell side and why I was socialized to make money. That's it, (if you'll excuse the pun) in a nutshell.
Scottish Non-Golfer |
October 17, 2011 at 04:52 PM
"The Tea Party also badly needs this concept explained to them."
This is one of those few issues where the left has slightly better instincts than the right, although they do a terrible job of articulating themselves. Many free-marketers actually believe that billionaires have really created billions of dollars worth of tangible value. The logic employed to argue such conclusions is usually quite circular. If Warren Buffet had been hit by a bus at a the age of nine, would there be billions of dollars missing from the economy?
The shift from a value creation economy to a value transference economy has been very hard on the middle class, who are usually not good at transferring value, but are easy to transfer value from. Tea Partiers tend to focus on the direct transfers of value in the form of taxation, while ignoring some of the more subtle mechanisms by which they are being bilked.
Backwards Ganglion |
October 17, 2011 at 05:14 PM
You know, this almost sounds like agood idea.
hey listen |
October 17, 2011 at 06:36 PM
Well, from what another guy here said, the people protesting wall street are not in any useful majors themselves.
hey listen |
October 17, 2011 at 06:38 PM
I don't think they're so much against it as against not being the value transferees (after all they got good grades and went to college, which was what they were told was the ticket).
October 17, 2011 at 06:58 PM
Yes, I think that I too will go find some book that an author would never print while alive and was written at the beginning of his career and then act as if it is representative of his thinking even though it differed hugely from almost all of his other work. Then I will say that people who would disagree with the book actually agree with it because they agree with the author about a lot of other things. Then I, too, will start drunk-blogging these ideas.
The Secret of NAM |
October 17, 2011 at 07:35 PM
Your definition of value transference is arbitrary. You essentially pick which which income represents "created" value and which income represents "transferred" value based on your own personal preferences.
If a researcher invents a drug, how much value has he "created" and how much has been created by the corporate structure (including wealthy CEO) and resources without which he never would have invented the drug? How much of the revenue from sale of the drug is value "transferred" from hapless customers versus value "created" by the drug company? Is the value actually "created" by the assembly line workers who run the machines that make the pills or box them up for shipment? Or is it created by the inventor of the process and the structure that allowed it? And, more fundamentally, what is the "value" of a product aside from the amount people are willing to pay for it in a voluntary transaction?
I don't think you've thought this through very well.
[HS: I've thought about it. You're just saying that because value can't be precisely measured, therefore it doesn't exist. That's what HBD-denialists say about intelligence.]
October 17, 2011 at 07:42 PM
Forget value transfer, you need to protect your boy Romney. CNN doing a good expose of the freak show that is Mormonism - all in the guise of "tolerance", of course. They show Christians attacking Mormons and say "oh my, how sad". Then they go into Mormons beliefs -- Garden of Eden in Missouri, ancient humans came to North America, Jesus visited America, and multiple wives.
October 17, 2011 at 08:49 PM
"I've thought about it. You're just saying that because value can't be precisely measured, therefore it doesn't exist."
No, jmanon's saying the "value transference" institutions like corporations and banks are actually providing value somewhere in the productivity chain.
It's you who are falsely claiming the "value transference" sectors of the economy are providing either no value whatsoever or only limited value.
jmanon is correct in this argument against "value transference". Investment capital and big businesses (as flawed as they are) are needed to get high IQ peoples ideas off the ground and implemented to put a product or service onto the market.
A healthy "value transference" sector is why America is so far ahead of European countries in developing technological breakthroughs (other than pro-value transference and free market Switzerland).
Although both Europe and America spend a similar amount of per capita GDP on government funded scientific research, America beats Europe in the high tech sector because America has a much more favorable investment environment than Europe does.
Europe subjects their "value transference" class to punitive taxation on capital investment and high incomes and Europe's high tech sector is much weaker than it should be because they have dis-incentived venture capital risk taking.
The Undiscovered Jew |
October 17, 2011 at 10:04 PM
"[HS: I've thought about it. You're just saying that because value can't be precisely measured, therefore it doesn't exist. That's what HBD-denialists say about intelligence.]"
But intelligence CAN be precisely measured. That's what IQ tests are for. You have no scientific method for assessing value so your entire thesis is unfalsifiable, arbitrary, and intellectually bankrupt.
October 17, 2011 at 10:07 PM
What makes you think most of them are angry at all? Most aren't. They are there because they are silly, unproductive people who have read about the 60s and want to be at a happening. They are losers.
October 17, 2011 at 10:21 PM
"I think that what the Occupy Wall Street people are really angry about is value transference,"
OWSers are angry because they're too egotistic and stupid to admit their OWN pro-government/nanny state regulatory policies are what have crashed the economy.
OWS should be really be relabeled a pro-government/pro-establishment movement because everything they support is what is supported by the big government SWPL sector.
Corporate America and Wall Street are only guilty of going along with those big government policies, but they aren't the originators of big government.
Wall Street had no choice to go along with our low intelligence president's big government regulations or they would have been crushed by the SWPL sector.
What do you think would have happened if corporate America didn't agree to meet government imposed race quotas or the big banks refused to hype Gaianist Solyndra?
If the rich hadn't gone along with these schemes, these same OWS protestors would be outside Wall Street reading from Maya Angelou about entrenched white racism in corporate America, and Al Gore would fly in to demand GS make emergency loans to Solyndra and reject their "Global Warming" denialist position".
The OWS are blaming corporate America for the bad results of the OWS's own policies.
The real villains are the OWS protestors who are overwhelmingly employed in the SWPL sector (i.e. Academia, public and private sector Unions, government agencies, Gaians, Global Warming cultists like Al Gore, Vegetarians/Vegans, the media, regulatory agencies such as the EPA and EEOC, doo-gooder nonprofits like Teach for America, the Peace Corps, etc) who are determined to ruin the private sector and be a general pain in the ass.
The policies OWS supports are all big government schemes.
Here is what OWS was asking the government to do pre-economic downturn:
OWS: Give mortgages to low IQ minorities and immigrants.
OWS: Unleash the Environmental Protection Agency.
OWS: Destroy Big Oil and replace the oil industry with the solar panel industry (Solyndra).
OWS: Invest education dollars and nonprofit resources into educating inner city minorities (Teach for America).
OWS: Elect Obama.
OWS: Cap global warming emissions.
OWS: Have the government takeover healthcare (even more than it already had before 2008).
OWS: Don't change entitlements for the elderly, just raise taxes to fund lousy government services.
OWS: Raise property taxes to fund public sector workers and their crooked unions (The Wisconsin gov worker withholding check battle).
OWS: Make it harder for young guys to date good looking women by encouraging American women to eat too many carbs and too little fat and protein.
OWS: Prevent building new housing with environmental regulations designed to save unique species of nematode.
OWS: Sue any business, other than auto shops, that allows workers to put up Playboy playmate centerfolds on their cubicles.
And there are internet conservatives who think OWS are the good guys??
The Undiscovered Jew |
October 17, 2011 at 10:27 PM
"Then they go into Mormons beliefs -- Garden of Eden in Missouri, ancient humans came to North America, Jesus visited America, and multiple wives."
How is this any more ridiculous than other metaphysical religious belief?
The Undiscovered Jew |
October 17, 2011 at 10:29 PM
Here is another example of the SWPL government sector and our low IQ POTUS trying to force the big banks to implement bad policies.
As I explained before, it's the OWS protestor's own big government policies that got us into this mess. Elite bankers and their botoxed trophy wives are 100% innocent victims in this saga:
New Mortgage Plan Floated
Underwater Borrowers Current on Payments Would Get Help
BY RUTH SIMON, NICK TIMIRAOS AND DAN FITZPATRICK
State and federal officials are pushing a plan that could help some "underwater" borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market.
The proposal was raised in a meeting last week between government negotiators and giant lenders as part of an effort to settle allegations of questionable foreclosure practices. Discussions are still fluid and any final outcome is uncertain. Talks between government officials and the banks are expected to continue this week.
The plan under consideration would make refinancing available to ...
The Undiscovered Jew |
October 17, 2011 at 10:47 PM
Has H.S explained how his idea differs from rent-seeking?
Claims that the job market isn't so bad for law school grads:
October 17, 2011 at 11:23 PM
How is it bad to help underwater people refinance their mortgages?
Refinancing lets people keep their house, have more money to consume with (a form of stimulus because it will go into the economy and not just go ti a bank and get sit on until the depression is over), the bank get some of their money back rather than none, and society avoids spiraling home values (when people lose their house not only are they out of a home but every house around it goes down in value as well)
Some of these things are in an the bank's interest to do as things stand (but they don't because they're fucking assholes), some aspects are a collective action problem that no bank would rationally do by itself but is in their interests to do as a group (specifically avoiding declines in home values caused by foreclosures).
There is a moral hazard (although one could argue that ship has sailed) so maybe the relief should be tied to decrease in home value in general and not negative equity.
Markets are not perfect its just as ridiculous to think everything will magically work itself out economically as it is to to think it will in people's personal lives.
Anon E. Mouse |
October 17, 2011 at 11:41 PM
The Undiscovered Jew,
You are batshit insane. Do you know what % of what Wall Street does is actually matching investors with capital? Very little. The entire mortgage bubble is a great example of value transference at work.
I worked as a derivatives quant. I never created value at any point in my entire employment. My job consisted of creating complicated derivatives and then talking slow witted fund managers in over their heads to buy them and making a huge cut off it. At no point was a business venture funded by anything I did. My situation was common on the street, its the norm.
"but they aren't the originators of big government."
They lobbied government to make most of the changes that made them TBTF. They support the federal reserve in engaging in pro bank behaviors which is about as big government as you can get.
"Wall Street had no choice to go along with our low intelligence president's big government regulations or they would have been crushed by the SWPL sector."
I've talked to guys on mortgage desks. At no fucking point was the CRA or any of this other stuff you go on about ever a part of what they did. They were out to fuck clients over, end of story.
You seem to be immensely uninformed as to how actual finance works or what goes on in an investment bank.
October 17, 2011 at 11:47 PM
Don't do it! I think you have hit the nail on the head. You've provided a concise, easy to understand, two word phrase that sums up the yet undefined global movement that has world wide leftist revolution as its goal. Let it die with the cold front on the way in for god's sake.
October 18, 2011 at 12:00 AM
"I worked as a derivatives quant. I never created value at any point in my entire employment."
Even if you created no value, being non-productive is not as bad as being actively destructive as the SWPL sector is through its promotion of bad government interventions.
"The entire mortgage bubble is a great example of value transference at work."
The banks went along with the mortgage bubble because they had no choice to lend to unqualified minorities or be called racist.
And making bad loans isn't good for banks, the mortgage and derivatives bubbles took down Bear Stearns and Lehman. The SWPL sector, which is represented by OWS, however still remains and is churning out regulations and interfering with the functioning of the country.
"My situation was common on the street, its the norm."
Again, even if Wall Street is providing no value to the economy, at least they aren't actively trying to ruin the economy the way OWS policies have been.
"I've talked to guys on mortgage desks. At no fucking point was the CRA or any of this other stuff you go on about ever a part of what they did. They were out to fuck clients over,"
Doesn't change my point that the mortgage bubble was caused by the government diversity commissars forcing lenders to give money to low IQ minorities.
How'd the minorities get the mortgages if nobody at the mortgage desks was handing subprime loans out like candy?
"Markets are not perfect"
Um, I didn't say the markets or Wall Street are perfect, I said the OWSers policies are WORSE than whatever Wall Street is doing.
The Undiscovered Jew |
October 18, 2011 at 12:21 AM
"They support the federal reserve in engaging in pro bank behaviors"
Why are pro-bank behaviors bad?
The Undiscovered Jew |
October 18, 2011 at 12:24 AM
Can the people who talk of ''bullshit'' majors explain what degree would give the 20% of America's unemployed a job?
Ok i get it sociology,womens studies ,environmentalism etc is worthless.So people who have real degrees in computing,biology,chemistry,mathematics,finance,
nuclear physics all have jobs right ? RIGHT?
October 18, 2011 at 03:43 AM
Haha, nicely done. Exactly what concept you have written in those flyer?
October 18, 2011 at 05:04 AM
"So people who have real degrees in computing,biology,chemistry,mathematics,finance,
nuclear physics all have jobs right ? RIGHT?"
It seems without a graduate education from the right schools that these degrees are useless too, especially finance. Honestly, if I were considering college right now the two options would be near full-ride at a good school or go for the cheapest option at the local commuter school. Everything else in between is risky. Unemployment isn't that bad when you don't have a >$30000 weight over your head.
Chris P. |
October 18, 2011 at 07:59 AM
Yes. Pharma CEOs create real value. But half sigma allows envy to blind him to the honest value creation of CEOs
October 18, 2011 at 08:58 AM
I think you should try it! All politics is about status, and OWSers are quite ready to accept any theory that lowers the status of the upper class. You'll find lots of willing converts.
Action >> typing on blogs.
October 18, 2011 at 09:21 AM
The banking sector destroyed trillions in value with the housing bubble.
"The banks went along with the mortgage bubble because they had no choice to lend to unqualified minorities or be called racist."
Yeah, that's why they lent money to rich white people in California and Florida to buy McMansions. Wouldn't want to be called racist. Subprime was a tiny portion of the problem. Regular (white) people in desireable areas paying too much for their houses was a much bigger problem. The web of poorly constructed derivatives around that even bigger.
Do you even realize that many of the derivatives products that blew up were synthetic. As in they didn't even need an underlying mortgage to be made. It didn't matter who was buying the houses.
"And making bad loans isn't good for banks, the mortgage and derivatives bubbles took down Bear Stearns and Lehman."
Its good for bankers, who cares about bank shareholders. These places haven't been partnerships in decades. The employees and executives all got away rich and work for other banks, doing exactely what they used to be doing. The only ones left holding the bag were mom and pop pension fund with Lehmen stock. The banking sector hasn't changed at all from those two firms going under.
"Again, even if Wall Street is providing no value to the economy, at least they aren't actively trying to ruin the economy the way OWS policies have been. "
Ripping off investors and turning capital allocation into a rigged high stakes casino actively destroys value in the economy.
"Doesn't change my point that the mortgage bubble was caused by the government diversity commissars forcing lenders to give money to low IQ minorities.
How'd the minorities get the mortgages if nobody at the mortgage desks was handing subprime loans out like candy?"
You have absolutely no idea what happened in the housing bubble. You don't understand scale at all. You don't seem to understand who loaned what to whom. You don't know how the derivatives market works. Even a basic level of research on reputable financial blogs would lead you to re-evaluate your posistion. The numbers are out there.
October 18, 2011 at 09:23 AM
HS: agree that OWS protesters are angry about value transference (and rent-seeking). Sure, some of it is sour grapes. As commenters above have pointed out, there is some legitimate value creation on Wall Street and in the boardroom, but maybe not enough accountability for external costs. OWS protesters also seem to want to increase entitlements, which is why there in not broad support from the middle and upper middle classes.
When are you going to write a book?
October 18, 2011 at 11:17 AM
"that's why they lent money to rich white people in California and Florida to buy McMansions."
But if they had to lend to the worst most unqualified borrowers anyway, wouldn't the lenders loosen standards for everyone else too? especially when Phoney and Fraudie had their backs?
October 18, 2011 at 11:31 AM
"The banks went along with the mortgage bubble because they had no choice to lend to unqualified minorities or be called racist." - Undiscovered Jew
This is false. It wasn't just a mortgage bubble either but a real estate bubble. Commercial properties were overbuilt as well. The same for apartments and condos. McMansions are also in foreclosure. Speculation was rampant even for empty lots. It was insane.
"And making bad loans isn't good for banks, the mortgage and derivatives bubbles took down Bear Stearns and Lehman. The SWPL sector, which is represented by OWS, however still remains and is churning out regulations and interfering with the functioning of the country." - Undiscovered Jew.
What brought down Bear Stearns and Lehman was analogous to musical chairs. When the shit hit the fan they were caught off guard and had too much crap on their books. The time to unload it all on foreign suckers had run out.
"Doesn't change my point that the mortgage bubble was caused by the government diversity commissars forcing lenders to give money to low IQ minorities." - Undiscovered Jew
Independent and unregulated mortgage companies (part of the shadow banking sector) originated a lot of the bad loans then immediately sold them off to someone else. The GSEs didn't get in on the action until later in this drama.
"Um, I didn't say the markets or Wall Street are perfect, I said the OWSers policies are WORSE than whatever Wall Street is doing." - Undiscovered Jew.
You're only saying this due to your irrational hatred of the left.
Commander Shepard |
October 18, 2011 at 01:34 PM
Elites are very adept at taking advantage of and manipulating crackpot left wing ideas. The idea that disparities in outcome are all the result of racism and that this is the worst thing in the world and that anyone that disagrees is a bigot can be used by people to justify almost anything that lessens those disparities.
The banks used left wing ideas about racism (not the other way around) in order to convince the people not already in the thrall of crackpot right wing ideas about markets to give them the legislation and policies that would allow them to make more money by lending to more kinds of people. Its ridiculous to suggest that the government had to force banks to do thing that made them massive amounts of money.
Anon E. Mouse |
October 18, 2011 at 01:47 PM
"What brought down Bear Stearns and Lehman was analogous to musical chairs. When the shit hit the fan they were caught off guard and had too much crap on their books. The time to unload it all on foreign suckers had run out."
Assuming this is the case, then we know that they are trying to transfer value in return for worthless paper. It is not a win-win if someone has to lose for you to win. In a true free market, it isn't just about figuring out how to screw someone out of his money, it is about exchanging valuable goods and services.
not too late |
October 18, 2011 at 02:07 PM
There is a far more encompassing, and easier explanation for the outrage.
The previously highly successful tactic of lobbying for more government money, being employed by feminists, unemployables, people in education etc is not netting them enough money anymore because the system is collapsing in on itself.
Thus they try to use the previously effective approach of demonstrations to get more government money.
It's flock intelligence algorithms all over again.
There's no conspiracy, it's just a bunch of people doing what's in their self interest.
Just like feminism.
Just like the unemployed.
Just like the black.
Just like the boomers.
Just like everyone who's running our economy in the ground with their entitlement politics.
October 18, 2011 at 04:52 PM
"Its ridiculous to suggest that the government had to force banks to do thing that made them massive amounts of money."
They banks totally didn't want to make fat stacks on high interest loans. They cried "Nooo, don't make us do it, we hate making money," but the government ignored them! Damn you minorities / leftists / SWPLs!
October 19, 2011 at 02:17 PM
davver and Commander Shepard:
The Undiscovered Jew places his own prejudices against leftists and NAMs above all else: they are the cause of all of the world's problems, even if in reality, the world is more complicated than simple right/left, whites vs blacks.
Jimmy Moore |
October 19, 2011 at 02:19 PM
The Undiscovered Jew places his own prejudices against leftists and NAMs above all else: they are the cause of all of the world's problems, even if in reality, the world is more complicated than simple right/left, whites vs blacks."
Hysterical. Then I remembered what the Rev. Jesse Jackson said about someone walking behind him...
October 20, 2011 at 12:37 AM
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