Tuesday, September 30, 2014

"Behind Every Great Fortune Lies A Great Crime"

That pithy quote from Balzac should inform our opinion of top-tier tycoons, CEOs, Fearless Leaders, aristocrats and the untouchable oligarchy we now call the one percent.  But, as Edwin Lyngar demonstrated in a recent on-line article, most of us have an "overpowering need to behave like a middle-class sucker."  If you live a life of morality, modesty, honesty and fair dealing, you'll probably avoid jail, but your chances of becoming a Donald Trump are miniscule, since that's not how the elite got that way.

Living by the Calvinist moral framework a lot of us grew up with, is really, like faith and devotion to tradition, an easy excuse not to dig into things and think them through.  Mr. Lyngar found that, contrary to what we're told the rules for behavior/reward are, in fact his worst ethical lapse resulted in his biggest financial success (it involved a little fancy stepping during the short-sale of his home).  And that is how the elite got that way. 

I've never been clever enough to benefit greatly from a move like that, but I often think about something I felt I could not do that cost me.  In school, I would not read the "Cliff's Notes" guides because that would be cheating.  It seemed to me that everyone should approach new material in class on an equal basis, without coaching or preparation.  Of course, everyone else did who cared about their test results and grades, and there was no reward for trying to understand that book, play, poem, or theorem all on your own.  So Mr. Lyngar sidestepped strict ethics when presented with a problem, and came out ahead, while I plowed ahead with ethics intact and did not have enough right answers on exams about the intricacies of Shakespeare.  Also, resume padding by joining a raft of groups and activities that are pretty useless or you really didn't care about seemed dishonest to me, while it seems quite the opposite to college admissions committees.

When I first understood what business incorporation was, it seemed fishy.  "Incorporate" to avoid liability and financial responsibility while preserving your own assets?  Not paying your bills, hiding money overseas and slipping out of paying taxes is all right when someone could be sent to prison for twenty years for possessing a joint (and that happened, many times)?

Fred Koch, founder of Koch Industries run today by son Charles in Wichita, set the family fortune skyrocketing by stealing the refining technology from another company early in the 20th century, which he sold it around the world.  Even to the Soviet Union, a little bit of a hypocritical move since Fred was one of the main John Birch Society members.  He countersued when challenged, and around 1950 actually was the one who got paid.  Judges don't really care if the bribes and campaign contributions come from businessmen or Al Capone, I guess.  Al rotted away in jail for being indiscreet, while Joe Kennedy got away with millions from Wall Street "pump and dump" cons, the Bush family banked gold for the Nazis, and The Donald's father refused to pay his contractors and sued them if they objected.

We all saw the movie about Facebook being quite successfully stolen by Mark Zuckerberg.  And they must be teaching more about winning than doing the right thing at Harvard, since one of his predecessors there, Bill Gates, sold the DOS operating system to IBM which was stolen goods already: Tim Paterson's QDOS was a copy of Gary Kildall's CP/M operating system.  Bill did pay Tim $50,000 before licensing it to IBM himself and making some real coin.

The Roman patricians became oligarchs by sending fellow citizens, farmers and tradesmen, off on wars and taking their land from the widows.  The winning formula was to go right for the gold (in Asia Minor, against the Celts, and by looting the Temple after the Jewish Revolt) using those soldiers, then working those stolen estates with the free labor of the enslaved populations brought back.  The later European aristocracies -- the Norman invasion is the best example of a long lasting ruling class based on murder and wholesale theft since the Romans -- and our own Southern one also thought labor should never be anything other than free.  All also believe, then to now, that they should be exempt from taxes.  "Middle class sucker" thinking seems be in agreement with that principle since the Reagan era.  Existence of a (now ludicrously low) minimum wage means, as Chris Rock said, only that they'd pay you a lot less if they could.


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