Do You Hate Greed? (War On Greed)

By: ispeculatornew
Date posted: 12.13.2011 (5:00 am) | Write a Comment  (2 Comments)

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If you have a few minutes, take the time to watch this fairly provocative video about private equity legend Henry Kravis, one of the richest and most successful men in the world, co-founder of KKR.

What did you think? It’s certainly an interesting point of view. I’m generally one-sided on these issues, and would usually say that these videos are too simplistic and in a way they are. I do think that some individuals are able to generate enough value to actually deserve this money. Take any celebrity that is making $20 million or more to make a move or play football. Do they deserve it? I’m not sure you could say that they don’t. The fact is that if someone is able to generate incredible sums of money by filling out a stadium, investing more wisely or leading a company to better profits, the free market will generally do a good job of making sure that person gets a large share of those profits.

The Contrast

Of course, the sad story here is that when you contrast with individuals that for example work in the health or education fields, it’s easy to feel like things are not fair. I would argue first off that it is our fault that teachers, nurses and others are not making enough money. The day that we will recognize as a society how critical having great teachers is, that might change. Another big part of it is also that very few individuals are able, willing and have been able to start private equity or other companies. It’s hard, the large majority end up failing and very few have the ability to do it. Being a nurse or a teacher is not easy, far from it. But in the way that we currently define it, there are many that are willing and capable of doing the job.  The laws of supply and demand then make sure that wages are not as high as what you and I might think they deserve.

What Does Upset Me

While I don’t have much of a problem with this guy making hundreds of millions and spending it as he wishes, I do have major problems with the fact that he is then able to affect the outcome of laws through lobbying. Isn’t that a big part of what’s wrong in our society? If you have money and are able to change laws (or keep ones that don’t make sense) simply because you have more power than others, it does not seem fair. I’m not sure we’d be better off if all laws were decided by public vote, in fact we’d probably be worse off. But what is the ideal way to manage situations like this? There is no easy answer.

Pressure To Do Good

One thing that I would much prefer to see instead of a focus on the differences and “fairness” of someone making so much is a focus on what they are giving away. I have not heard enough about Henry Kravis to judge him on this. I do however know that tens of billionaires are signing the “Giving Pledge” to give away the majority of their wealth and by doing this they are having a very strong impact in making our world a better place.

 

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2 Comments

  1. Comment by Brian — December 14, 2011 @ 4:22 pm

    I agree that the film is simplistic. I can always find two people to compare and contrast.

    The first poor person in the film is a teacher with 3 children complaining about only making $30000 a year and 4 people can’t live on that, but how is that anyone’s fault but your own. Teachers only work on avg 180-190 days a year, get great benefits and time off.

    The second person says her wages are like $22.00/hour and only makes $40000/year. No wonder your broke you are unable to do math.

    Can’t say much about what the last person does for a living except that it comes across as a entry level grunt work job that will improve as time goes on. Just whines about how it’s not fair.

    Lastly I have to say that 2 of 3 people are unionized workers and they also are lobbing congress for special perks pertaining to them. They may not be able to go to fundraising event for $10000/plate but their reps are, and their union is giving major bucks to congress critters for their vote.

    KKR bought a major stake in Safeway Inc around 1992, brought in their guy to turn the company around and her we are 20 years later still working and making some of that evil profit and giving it back to the shareholders in the form of a dividend.

    Greed for greeds sake is bad, but greed propels people to do better and improve their lot in life.

  2. Comment by IS — January 15, 2012 @ 5:35 pm

    @Brian – Interesting point about the unions, I had not thought about it from that perspective

    A lot of good points, thanks for posting those 🙂

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