I wrote an email response to a friend who described to me what his ideal billionaire would do for his\/her workers and society as a whole.<\/p>\n
Something I learned in my first economics course, and I have seen it played
\nout over the years.<\/p>\n
From Encyclopedia Britannica:<\/p>\n
\nGresham\u2019s law, observation in economics that \u201cbad money drives out
\ngood.\u201d More exactly, if coins containing metal of different value
\nhave the same value as legal tender, the coins composed of the
\ncheaper metal will be used for payment, while those made of more
\nexpensive metal will be hoarded or exported and thus tend to
\ndisappear from circulation. Sir Thomas Gresham, financial agent
\nof Queen Elizabeth I, was not the first to recognize this monetary
\nprinciple, but his elucidation of it in 1558 prompted the economist
\nH.D. Macleod to suggest the term Gresham\u2019s law in the 19th century.\n<\/p><\/blockquote>\nNowadays, when economists apply this to more than coins, they call
\nit a Gresham’s Dynamic. What I saw in the dot com bubble, was a
\nGresham’s Dynamic of mutual fund managers. The one’s who could
\nkeep their wits about them, and not succumb to the mania, were driven
\nout of the business by the mutual fund managers that were racking up
\ngreat performance numbers by going wild for dot com. I didn’t get
\nhurt at all by the bursting of the bubble, because I was adamant about
\nnot jumping on the band wagon. As I used to say to my colleagues
\nwho were boasting about how much money they were making ”<\/p>\nThe goal
\nis not to have the highest peak theoretical wealth ever, but how much
\nof that wealth you still have after the bubble bursts.\n<\/p><\/blockquote>\nI wasn’t the one to have a higher tax bill from stock options that I never got
\nto cash in before they became worthless.<\/p>\nSo, in your dreams about ideal capitalists, there is a Gresham’s
\ndynamic going on. The ones who want to do right by their employees
\nand society get taken out by corporate raiders. The rules have
\nbeen rigged to reward the raiders, and leave the good capitalists
\nwith no protection. The good capitalists either get driven out of
\nbusiness, or they have to take on some of the predatory practices
\njust to survive. This is why we must have some entity (the
\ngovernment for example) to set the rules to prevent the Gresham’s
\nDynamic. So, while I love your idealism, I am aware of how things
\nwork when everybody is set free to do whatever they want.<\/p>\n","protected":false},"excerpt":{"rendered":"I wrote an email response to a friend who described to me what his ideal billionaire would do for his\/her workers and society as a whole. Something I learned in my first economics course, and I have seen it played out over the years. From Encyclopedia Britannica: Gresham\u2019s law, observation in economics that \u201cbad money […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-28388","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/28388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=28388"}],"version-history":[{"count":1,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/28388\/revisions"}],"predecessor-version":[{"id":28389,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/28388\/revisions\/28389"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=28388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=28388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=28388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}