
Fighting America's 'Financial Oligarchy' - nreece
http://www.npr.org/templates/story/story.php?storyId=103122382
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jacoblyles
It's a fair point. But I think he's unreasonably optimistic if he thinks the
problem can be ameliorated, or that it doesn't exist in other countries.

That financial companies bend financial legislation and regulation to their
benefit is just a specific example of a more general phenomenon. Mancur Olson
and other "public choice" economists have theorized and attempted to prove
that democracy tends to produce policy which has concentrated benefits
(Washington's "special interests", one of the more honest political monikers)
and diffuse costs (paid from general revenue).

Concentrated benefits and diffuse costs explains why the article's 'financial
oligarchy' controls policy. It is worth the while of financiers to put a
substantial amount of resources into effecting policy, because the benefit is
large to them. But the marginal cost to an average voter of that policy is
quite small in comparison. So the average voter does the rational thing and
doesn't try very hard to change things, and the average politician does the
rational thing and serves the special interest.

But this effect also explains a host of other issues. Think about why
politicians are killing the DC school voucher program, despite a recent
studying showing its effectiveness and the fact that the vouchers cost one-
fourth the amount of educating a kid in a public school. Teacher's unions are
a concentrated interest, they benefit substantially and directly from
maintaining a de facto public monopoly on education. The lower quality and
higher cost of education that results from this monopoly is spread over a
large population, and it is indirect and hard to notice. So, poor kids are
kicked out of cheaper and more effective private schools and back into some of
the worst public schools in the nation.

But it also explains lots of other programs. Ethanol. Military boondoggles.
Bridges to nowhere. Occasionally democracy produces policy in the public
interest, but it is somewhat by chance. That's not what the incentives of the
system were designed to do.

So, yes, I think the economist in the article has a point. I also don't think
it's going to change. And I don't think the problem is limited to finance. And
I don't think it depends on which politicians are in office.

~~~
silentOpen
The audio is incredibly low throughput. The text blurb doesn't contain much
information. If you haven't already, you should read his piece on The Atlantic
<[http://www.theatlantic.com/doc/200905/imf-
advice>](http://www.theatlantic.com/doc/200905/imf-advice>). It goes into many
of the points you raise. Significantly, he notes parallels to developing
nations and discounts specific politicians or power players.

------
tjic
I find it quite amusing that the folks at NPR, who live largely off of
taxpayer dollars, whether the economy is doing well or poorly, have the gall
to call anyone else "oligarchs".

The salaries for lots of NPR folks are available in public filings (IRS 990
form for National Public Radio, FY 2005).

Here are some of the hosts:

* Renee Montagne: $308,374 salary + $30,640 benefits

* Steve Inskeep: $301,856 salary + $35,572 benefits

* Robert Siegel: $288,795 salary + $24,480 benefits

* Scott Simon: $266,821 salary + $33,572 benefits

* Alexander Chadwick: $235,173 salary + $29,564 benefits

I don't mind high compensation for folks who take risks and create tons of
value, but when you effectively can't be fired, and the majority of your
funding comes from taxes, it gets under my skin.

...and then to decry OTHER folks as being compensated too highly... ?

~~~
biohacker42
Doesn't a large chunk of NPR funding come from private donors?

~~~
gills
At least some of it does. They were just running their pledge drive here in
Seattle, I think last week (sometimes I lose track of when I hear things on
the radio, maybe someone with a lower relevance filter will help me out on
this one).

As for taking risks and creating value, I think the linked article speaks for
itself.

